It illustrates that with proper design and adjustment, it can help bring about stability in the economy and yet contribute to economic growth. What is more important, it gives Malaysia monetary independence and lower social adjustment costs. I have quoted some of the positive developments in the real economy but there are few areas which will continue to remain a source of concern. These include future development of the property sector which is still characterised by a stock overhang. Nevertheless construction of several low-cost housing projects, schools and hospitals as well as the implementation of a few infrastructure projects will help spur some growth in the construction sector.
Private investment plays an important role in sustaining the recovery momentum.
There has been a slight decline in the number of proposals and approvals for private investment compared to the position in 1998. In a way, this is quite expected as there is still excesss capacity in the economy. It is also not a reflection of the weakness of the economy, but it is more in line with the need for us to be selective in favour of more capital intensive investments. It is also quite in line with the overall economic conditions in the region. However this slack will be partly compensated by public sector capital formation.