YB LIM GUAN ENG
MINISTER OF FINANCE MALAYSIA
OPENING OF MENARA PRUDENTIAL at TUN RAZAK EXCHANGE (TRX)
10 SEPTEMBER 2019
MENARA PRUDENTIAL, TRX
Mr Nic Nicandrou
Chief Executive of Prudential Corporation Asia;
Ms Lilian Ng Chief
Executive, Insurance, Prudential Corporation Asia;
Mr Gan Leong Hin
Chief Executive Officer of Prudential Assurance Malaysia Berhad;
Mr Nor Azman Zainal
Chief Executive Officer of Prudential BSN Takaful;
Mr Raymond Tang
Chief Executive Officer of Eastspring Investments Berhad;
Mr Liew Hau Seng
Chief Executive Officer and Managing Director of IJM Corporation Berhad;
Members of the media;
Ladies and gentlemen.
Good afternoon and Salam Harapan,
1. Firstly, thank you for inviting me here today for the official opening of Menara Prudential here at the Tun Razak Exchange (TRX). On behalf of the Ministry of Finance, we extend a warm welcome to Prudential for your participation in Malaysia’s first international financial district, solidifying Kuala Lumpur’s position as a financial capital.
2. Spread over 70 acres and with a gross development value of RM40 billion, TRX is designed to cater for world-class financial institutions, with its seamless connectivity, sustainable ethos, and a people-centric development of the future. The TRX is also envisioned to be a major lifestyle destination for the city.
3. I understand the office spaces are designed to promote creativity and collaboration between employees and overall, the building has incorporated elements that celebrate Malaysia’s history and heritage. The rooftop of the building is inspired by the traditional Malay male headgear known as the “tengkolok”.
4. Prudential’s decision to establish their Malaysian headquarters here is also a testament to the successful detoxification of TRX to quickly restore investors’ confidence in TRX. By hastening efforts to detox TRX by identifying, separating, and quarantining elements of misappropriation, misuse of power, and misdemeanours related to the notorious 1MDB scandal, the Pakatan Harapan administration has been able to make this project an attractive prospect to investors and international corporations. The TRX project is, veritably, a corruptionfree project that has gained the trust of investors, domestic and international.
THE GOVERNMENT’S EFFORTS IN REVITALISING ECONOMY
5. Since the Pakatan Harapan administration came into power, it has been our mission to restore and revitalize the business ecosystem, for both local and foreign players to thrive in. One of our immediate focus areas is to strengthen our economic fundamentals in terms of restoring trust in the government by implementing institutional reforms that lead to Competent, Accountable, and Transparent (CAT) governance.
6. Our strength lies in our capabilities of doing business backed by investment-friendly government policies, robust pool of talent, and world-class infrastructures. Our efforts have now started to show a positive impact for the nation. Total stock of foreign direct investment rose by 10.3 per cent to RM667.5 billion in the second quarter of 2019, compared with RM605.1 billion a year ago. Moreover, approved FDI across all sectors also rose by 97.2% to RM49.5 billion in the first half of 2019, from RM25.1 billion over the same period last year.
7. Sustained economic growth is a key factor behind the rising FDI. Malaysia’s second quarter GDP growth shows better than expected performance, rising at 4.9% beating Bloomberg’s compiled forecast of 4.7%. Malaysia is one of the few countries in the world with a better 2nd quarter economic growth performance that the last quarter, raising the economy’s growth potential and create additional jobs for Malaysians in the near future.
FINANCIAL LITERACY IN MALAYSIA
8. As part of our effort to improve Malaysia’s standing globally and overall GDP, we need to first start with our people. According to Agensi Kaunseling & Pengurusan Kredit (AKPK), Malaysia ranked 26th out of 30 for financial literacy in the 2016 Report for the Organisation for Economic Cooperation and Development (OECD). Our alarmingly high levels of debt is partly attributed to low financial literacy rate, particularly among the youth.
9. Although we have seen a decreasing trend in the Malaysian household debt in recent years to 82% presently, it is still higher than high-income nations such as Japan (58%) and the United States (76%). Many do not have the knowledge or habit to save. Almost one third of Malaysians do not have enough savings to survive three months without any income, while 30% do not have enough to last even for a month.
10. As part of our national strategy to promote better financial management for Malaysia, the Government has launched the National Financial Literacy Strategy 2019 – 2023 earlier in July. It is a comprehensive fiveyear plan that aims to improve Malaysians' financial security and standing through responsible behaviour, rational attitude, and increased financial knowledge.
ROLE OF INSURANCE
11. This is where insurance can play a bigger role in improving financial literacy and building financial resilience among Malaysians. According to Bank Negara Malaysia (BNM), less than 41% of Malaysians own at least one individual or group life insurance policy or family takaful. Additionally, almost half of all Malaysians are uninsured with a life insurance penetration rate of 55% that has been stagnant for years. Thus, the Government and BNM are taking every effort to realise the national agenda for the national insurance penetration rate to reach 75% in 2020.
12. Insurance providers, including Prudential, should also further develop insurance protection plans for the under-served and under-protected who are largely from the low-income group or the B40. This includes providing Malaysians with more diversified and affordable choices. I am encouraged to hear of Cha-Ching, Prudential’s financial education programme carried out at schools and PRUkasih, a free financial protection plan that provides temporary financial relief to urban lowincome families. We also welcome the recent launch of Pulse by Prudential, an all-in-one digital app and first-of-its-kind in the region to offer holistic health management to everyone for free.
13. Looking ahead to the 2020 Budget, whilst we do not foresee any new tax measures on the corporate sector and investment community, the government will have to seek fiscal space to prioritise sustainable economic growth. Such expansionary measures may be necessary to provide some fiscal contingency, amidst an uncertain global economic environment following the unresolved trade dispute. Malaysia advocates a continuation of a multi-lateral approach to achieve free and fair trade, productivity growth, embrace of a digital economy, and a rise in incomes to increase purchasing power and profitability of workers and businesses.
14. On this note, I would like to take this opportunity to congratulate Prudential on their 95th anniversary in Malaysia. Thank you for your continuous efforts and unwavering commitment in safeguarding millions of Malaysians over the years. We look forward to more initiatives from Prudential to further bolster our relationship in protecting Malaysians and building their financial resilience.