KUALA LUMPUR (June 22): The weakening ringgit has allowed Malaysian exporters to be more competitive even though import costs are higher, said Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar today.

Speaking to reporters at the Parliament lobby after tabling the 11th Malaysia Plan (11MP), Abdul Wahid pointed out that “it is a matter of adjustments” to ride through the current economic situation.

“Basically Malaysia is still a net exporter. We still enjoy (a) trade surplus. Obviously there has been an impact on our currency which has affected our imports and exports. Imports are more expensive, but exports have become more competitive," he explained.

“Look at the items in the oil and gas sector for example … we will benefit from that. It’s just a matter of adjustment. So, those companies that have significant input from imported products will feel the impact but at the same time there are also many industries benefiting from it,” he added.

Abdul Wahid said under the 11MP, the government will focus on developing more home grown champions to expand their businesses at a “global level”.

“We are confident that this move will increase product and service exports from small and medium enterprise (SME) and local entrepreneurs. Under the various initiative, we are confident of increasing SME contribution to the gross domestic product (GDP) to 41% in 2020 from 32% in 2010.

“We also target SMEs to increase their exports to 25% when compared to 15.7%,” said Abdul Wahid.

However, he admitted that many local firms are not ready to compete at a global level.

“The government will also take steps to strengthen the numbers of our exporters and the quality service exporters. There will be more government-to-government (G2G) negotiations to open new markets and tighten our international business networking to increase our exports,” he said.

The ringgit have been weakening against the US dollar due to a drop in Brent Crude prices.

In the past six months, the ringgit traded at its lowest against the US dollar at 3.76 on June 8 from a peak of 3.52 on Jan 3. The ringgit’s average over the six-month period has been at 3.62 against the greenback.