level of consumption does not guarantee higher rate of economic growth for a sustained period. investment, on the other hand, is a prerequisite for a dynamic economy that is moving towards a higher level of income and development. indeed, many new areas of growth in malaysia would benefit from higher investment, such as in niche growth segments in the services sector, as well as in the development of enabling infrastructure such as in broadband and green technology. investment in green technology has the potential to not only increase the efficiency of the economy, but also to open up new sources of growth. as malaysia moves from a cost - competitive economy to one that is more knowledge and innovation - driven, it is not just the quantity of investment that matters, but the quality of investment that would dictate our ability to move up the value - chain. an important consideration in ensuring high quality investment is the availability of complementary factors. here, i would like to highlight three of these factors, namely a private sector - led competitive environment, high quality workforce and the availability of enabling infrastructures. a business friendly environment with minimal market distortions is critical to ensure that the private sector can direct its investment activities efficiently and to areas of the greatest growth and return potentials. similarly, the availability of skilled workforce and modern infrastructures such as high - speed broadband is key in ensuring that high value - added and high knowledge - content investments take place. much is currently being discussed and debated on the issues of high quality workforce and information age enabling infrastructures, especially given the government ’ s renewed emphasis on them in the recent efforts to transform the malaysian economy. allow me to elaborate more on the key complementary factor that has been in my opinion receiving relatively less focus in current public debate, and, this is the need to develop an extensive market - driven private sector - led competitive environment. as an economy moves up the value - added chain, and develops knowledge intensive industries, the dynamics of interplay and balance between the private sector and the public sector changes significantly. in a developing economy, the role of the public sector is broader and it actively drives many economic decisions – from development of appropriate infrastructures and institutions to more direct allocation of resources. but as an economy becomes more developed, with progressively more complex, sophisticated and knowledgeintensive activity, it is increasingly untenable for the public sector to hold comparative advantage in allocating resources efficiently. it is thus crucial that the private sector takes on a more dominant role in driving economic growth and for

zamani abdul ghani : growth and development of smea€™s in malaysia opening address by mr zamani abdul ghani, deputy governor of the central bank of malaysia, at the top smi supporter award presentation, held at the credit guarantee corporation malaysia berhad ( cgc ), petaling jaya, selangor, 9 june 2008. * * * bismillahirrahmanirrahim distinguished fellow members of the board of directors of cgc, yang berbahagia datuk wan azhar wan ahmad, managing director of cgc distinguished guests and representatives of financial institutions members of the media ladies and gentlemen assalamualaikum w. b. t. and a very good afternoon on behalf of the board of directors and management of the credit guarantee corporation, ( cgc ), i am pleased to welcome you to this top smi supporter awards presentation ceremony. this occasion is held in conjunction with the cgc's 35th annual general meeting that was successfully concluded just a while ago. i am pleased to note the encouraging representation made here today by fellow members of financial institutions. this signifies the importance that financial institutions attest to this cgc's annual award presentation ceremony. that said, allow me to record our appreciation to all of you for making this ceremony an important event in your calendar. this top smi supporter awards presentation ceremony, as you are all well aware, is an annual occasion. it recognises the active participation by financial institutions in cgc's credit guarantee schemes in particular, and contributions by financial institutions to sme development in general. we firmly believe such efforts should not go unnoticed. collectively, the award recipients and all other financial institutions have helped in making cgc a stronger sme - support institution. this is so as their active participation opened a new window of opportunities not only for the smes but also for the cgc in reaching out to a wider cross section of the sme community throughout the country. in 2007, cgc provided credit guarantees totalling rm4. 6 billion to more than 13, 000 smes through our main schemes, the programmed lending schemes as well as the securitisation of sme loans. there was actually remarkable growth with the number of loans and amount guaranteed growing by 73 % and 53 % respectively. this could be attributable to the strong support given by participating financial institutions that have been robust in serving the sme market in the recent years. i particularly note with interest that the seven