PASSAGE 2 Paragraph 1 Datuk Dr. Craig Barrett, Intel Corp president and executive officer, is a big believer in education. "For emerging economies such 28 Malaysia’s an educated workforce would ensure a nation’s continued enjoyment of a decent standard of living,” he said. He is also frank on one point: the day innovation comes to a halt, companies like Intel, thet have huge investments in emerging countries, will not hesitate to pull the plug In_an interview, Barrett, who wes on a visit to Penang, shared his views on how emerging nations can move ahead. “I think the appropriate thing for emerging economies which want to move forward would be to have the best trained engineers, scientists and other professionals," he said, They should have the best possible communications infrastructure that can be established, the best government policies that promote businesses and access to the latest'in'e-commerce capabilities. “I would do that with aggressive incentives which could take a variety of forms. Investments should be,closely monitored and compared to that of other countries trying to attract foreign investors," he said. Ireland and India, two diverse countries which have built a reputation for themselves as Silicon Valleys of sorts, elicited the following comments. “Ireland hes a very long history of strong educational infrastructure. The Irish phenomenon hes been a phenimenon of the last 10 years, but prior to that, Ireland created 6 lot of engineers and scientists who all had to leave Ireland ta get a job. But finally the Irish Development Authority got eggressive and, with access to some EU (European Union) development funds, started to attract high-tech industries. It has naw moved from being a net exporter of people to a net importer of people. The Irish citizens are coming back to work in ireland. It has been a combination of people and incentives, and the basic communications infrastructure which is already in place.” India is different. It eiso has had a strong educationat history, but haS chosen to be entrepreneurial in software and not hardware because it does not have stable infrastructure such as power and water ~ the basic infrestructure thet other countries have. Being entrepreneurial is another wey of producing economic success. “it also hasn't streamlined the issues of import and export of raw materials outside the primarily import-export type industries and the customs department needs to be very efficient. India rose on the basis of the very educated engineers that they have,” he seid. Barrett said that eny country making a transition from manufacturing to design creation would have its work cut out — but it can be done. “All the electronics manufacturing in the US - except for the very high-end manufacturing — has been exported out. The US hes made that transition now without basic manufacturing, but there was a lot of hand-writing prior fo that. Twoplaces it exported to are Teiwen and Malaysia. If you go to Taiwan today, the same debate is taking place that took piace in the US 10 to 15 years ago. ‘Isn't it terible that we are losing manufacturing to Southern China?’ ‘ifs going fo be horrible in the future.’ ‘What are we going to as a hollowed-out manufacturing country?’ Taiwan will be doing just fine if it can create enough scientists and engineers to add value to the design and création of products — it doesn't have ta. manufacture them. Malaysia will have exaclly the same opportunity,” he added. Like Intel's own transition, Malaysia's transition up the value chain would take time, Barrett said, but in that time a lot has to be done. “If, you want your stendard of living to be high — raising the per capita income — that will not happen on a continuing basis until you raise the level of contribution of your citizens. And that won't heppen unless you continue to increase the level of education of your citizens,” he added, So while Malaysia hes been very successful in value manufacturing, increasingly in the future to rise to the next level, those people who are in manufacturing today will have to manufacture-value-added products. China, the next economic superpower, looms as a bogeyman for South-East Asian nations .with its manufacturing might and value-add potential. Barrett's advice is to acknowledge this fect. “My simplest comment is, it's going to happen. You shouldn't worry about whether it’s going to happen or not. You should always worry about things that you can have some impact over. The appropriate things to do are to recognize it is going to happen and work out how you can use it fo your best advantage," he said He said if Datuk Wong Siew Hai, who heads Intel's menufaciuring operations in Malaysia, could do something at lower cost in China then he should do that and use his resources here to create some greater value. “He is going to keep delivering on his side but, increasingly, the fraction of empioyees here who participate at a higher level is increasing every year. It's been increasing if the past decade and it is going to continue to increase in the future. So he’s going fo hire more engineers than those who work on the manufacturing line here, and those engineers are going to contribute to creating value at a level much higher than that of the simple production process,” Barrett said. “So we'll invest in China, but we'll continue to invest here and in the Philippines. We'll see the level of sophistication of our operation here grow. If they ever stop growing, that's the time when you'll see a disinvestment here. The time when you can't get more value-add out of your capabilities, that’s when you disinvest. And that always comes back to the same fundamental issue that we started this conversation on: unless you can educate your work force to higher levels of contribution, you'll tend to fall behind. So that has to be the primary challenge for just about any government,” he said. theeaf 18. 19. 20. 21. 22. 23. ‘They’ (paragraph 2) refers to . trained engineers B) emerging economies C. trained scientists D. other professionals - ‘diverse’ (paragraph 3) means : unsuccessful different C. remote D. poor shave its work cut out’ (paragraph 5) means have difficulties be excluded ©. be stopped D. have changes ‘we' (paragraph 5) refers to Taiwan Malaysia ©) Unites States Southern China indamente!’ (paragraph 8) means basic current C. present D. important Dr. Craig Barrett believes that when Melaysia stops adding value io Intel's products the corporation will invest in China 6 close thé operation . increase. investment D. educate the workforce tretand’s success over the lastten yearsisdueto A. attracting high-tech industries B. being a net importer of people Raving a strong educational infrastructure producing 2 lot of scientists and engineers India’s success is due to all the followingEXCEPT A. highly educated engineers B. the use of development funds © the import and export of raw materials D. the introduction of entrepreneurial in softwareERE ES EERE SD aS se SS = eS 25, 26. 27. Dr. Craig Barrett believes Taiwan will be successful if it A. manufactures more products B. changes the products it manufectures &, manufactures products in Souther China e concentretes on design and creation of products : For Malaysia's confinued success in the future, Dr. Craig Barrett suggested that the countries has to raise the standard of li 6 Jevel of education . per capita income of citizens D. level of citizens’ contribution Dr. Craig Barrett suggests that China’s effect on neighbouring countries will be A. manageable minimal disastrous D. unimportant The main idea of paragraph 5 is the US is. A. changing manufacturing (8) exporting electronic manufacturing C. importing electronic manufacturing D. creating enough scientisis and engineers The mein idea of paragraph 8 is A. the increase in production Intel's investment in China @ the need to upgrade production the need to hire more engineersPASSAGE IV Signs abound that the Malaysian economy is on a firmer footing. Commodity prices are up, tourism arrivals are rising and the recent stock market rally has seen equity prices soar to their highest levels in three years. The smooth handover of power by Prime Minister Mahathir Mohamad to his successor, Abdullah Ahmad Badawi, on October 31 has also boosted optimism. However, there is just one bugbear: Malaysia’s recent export numbers. For the three months to September 30, exports plunged 20%. It was the worst performance in two years, much of it a result of Malaysia’s weakening electronics sector. On a taree- month seasonally adjusted rate, Malaysia’s electronics sector contracted by 39% at the end of September after falling 14.5% in the second quarter of this year. The numbers confirm one disturbing fact. The relocation of electronics companies, which produce personal computers, cellphones and routers from Malaysia to more cost-competitive production centers, particularly China, is starting to take its toll. While the global and regional economic rebound will ensure sustained growth in the medium term, relocations, such as those taking place in the electronics sector, could hnurt the country’s export recovery and present some downside risks for the economy, which the government says should expand by 4% this year. The export data also reveals deeper problems. For one thing, Malaysia's weak performance in the electronics sector is in stark contrast to some very encouraging data emerging from other electronics export centers such as South Korea, Taiwan and Singapore. Some economists fiet that the troubles brewing in the electronics sector expose a structural flaw in the Malaysian economy, which has long been reliant on foreign direct investment and exports to spur growth. They note that while the country has spent vast sums of money investing in physical infrastructure, it has lagged in terms of hamessing the nation’s human capital through higher standards of education and health, To be sure, Malaysia has been successful in providing basic education and health to its population. Consider these numbers: enrolment at the lower secondary schools has risen from 52% in 1970 to more than 85% currently, while in the upper secondary level enrolment numbers have jumped to more than 73% from 20% in 1970. But education standards haven’t kept pace. Some economists argue that the government should allow for the proliferation of private schools, which would provide direct competition to public schools and offer Malaysians a choic: Senior officials in Prime Minister Abdullah’s new administration concur that reforms in the education and health sectors will be crucial. But these reforms will take time. In the meantime, Abdullah’s administration is likely to focus on rural development and promote primary industries to help push exports. Agriculture and mining account for about 15% of employment in Malaysia, and some economists such as Rajeev Malik of JP Morgan Chase in Singapore believe that by focusing on these sectors the government could boost its political support among the rural groups. Enhancing rural incomes would also help generate more domestic demand and spur economic growth. Adapted from The Economic Review (2003) Paragraphs 163. 65. 67. 68. In paragraph 1 the writer’s assessment of the economy is A. encouraging B. controversial C. uncertain D. gloomy ‘However’ in paragraph 2 is used to show that economic forecasts for Malaysia are encouraging but not justified the Malaysian economy is improving but is still not on a firm footing everything is fine with the Malaysian economy except for one problem the Malaysian economy is fine except for its dependence on foreign investment pop From paragraph 3 we can infer that electronics companies in Malaysia are being relocated production costs are cheaper in China than in Malaysia the government is forecasting a 4 % growth in the economy this year relocation of electronics companies is affecting the Malaysian economy voOm> ‘The expression ‘haven’t kept pace” in paragraph 4 means that education standards enrolment in schools. A. override B. overstep C. donot match D. donot follow ‘The writer’s stand is that Malaysia’s economic planning has been very accurate Malaysia cannot compete with China, Taiwan, Korea or Singapore Malaysia’s economy can be boosted by focusing on education Malaysia must reassess its short-term and long-term economic goals poePE Both economists and officials from the new government administration feel that rural incomes should be improved political support should be gained from rural groups attention should be given to the development of primary industries amendments need to be introduced in the education and health sectors pope69. The evidence which shows that lero s electronics sector needs shaking up is the fact that ‘A. Malaysia depends too heavily on the exports of electronics B, the projected 4% economic growth is probably too high C. economic growth in the medium term is expected to decline D. other Asian electronics exporters are doing better than MalaysiaPASSAGE V Six months ago Taiwan was in the throes of the Severe Acute Respiratory Syndrome, or SARS, outbreak that some worried could cripple the island’s steady, if fledging, economic upswing. Exports to China and domestic-retail sales plunged as shoppers in the region stayed home. Taiwan’s Gross Domestic Profit (GDP) in the second quarter shrank 0.1 of a percentage point from a year carlier. Be that as it may, exports are once again humming along at a healthy clip, as companies such as Taiwan Semiconductor Manufacturing and Hon Hai Precision Industry rack up record monthly sales ahead of the Christmas holiday shopping season in the United States. The island’s booming stockmarket, whose main index is up more than 45% since late April, is making many Taiwanese feel wealthier, That, combined with low interest rates that make borrowing cheap, is leading some analysts to announce the retum of a long-lost figure: the Taiwanese consumer. Taiwan’s government expects GDP to have grown by just under 4 % in the third quarter and by another 4.7% in the fourth quarter of this year. Among outsiders, even some of the more bearish are now rethinking the island’s economic prospects. Investment bank UBS late last month raised its forecast for Taiwan’s GDP growth this year to 2.7%, from 2.4%. That’s still below the consensus, but UBS also predicts the island’s economy will expand 4.3% next year, higher even than the government’s own forecasts. * I think the recovery has actually surprised us. The recovery from SARS was faster than expected,” says Eric Chen, president of Chinatrust Commercial Bank, one of Taiwan’s biggest privately owned lenders. Chen says the improvement is evident in his business. Last year client demand was mainly for refinancing loans to take advantage of cheap interest rates. This year, he” says, more companies ate borrowing to invest in new projects. And Chinatrust’s wealth-management business is on track to more than double in size this year. Chen attributes Taiwan’s newfound strength mainly to the resurgent health of the U.S. and Japanese economies, and to China’s unabating growth. Analysts add another reason: election polities. President Chen Shui-bian has pushed stimulus measures to take advantage of the upturn. He has tried to accelerate the stockmarket’s rise by, for example, announcing the end to ‘Taiwan’s qualified foreign institutional investor system that restricts foreign- capital inflows. What could put the brakes on this upturn? Some are worried about the rapid strengthening of Taiwan’s currency.The New Taiwan dollar has appreciated 4.5% against U.S. dollar since late April, despite efforts to contain it. That makes exports of Taiwanese companies less valuable when converted into the domestic currency. But others argue that the rising curreney will not end Taiwan’s party. James P. Carroll, head of Taiwan research for ING Financial Markets, argues that while the strong Taiwan dollar will hurt some exporters, that effect will likely be outweighed by the positive impact it has on the broader economy including companies with revenues in the local currency, such as banks and airlines. In fact, he says, “We believe that Taiwan is in the first phase of a multiyear bull market.” Adapted from The Economic Review (2003) Paragraphs 270. nl. “Be that as it may’ in paragraph 1 can be replaced by A. While B. Inspite of C. Asaresult D. Nevertheless According to the passage which of the following diagrams BEST describes Taiwan’s economy72. According to the passage, it can be inferred that Taiwanese consumers have not been spending because of E A. B. c. a. an increase in exports and domestic retail sales high interest rates and high GDP a decline in the stock market prices and high interest rates an inerease in investment projects and low interest rates 73. From the passage what conclusion can you draw about the future of Taiwan’s economy? A B. ic D. The Taiwanese economy is expected to face a downturn . Foreign investments in Taiwan will increase tremendously. Taiwan’s economy will continue to improve despite a few setbacks. . Businesses dealing in the local currency will face a negative impact. 73. James P. Carroll believes that the appreciation of the Taiwan dollar will not hurt the economy because pomp banks and airlines will generate more revenue Taiwanese exports will cost more in the U.S. not all exporters will be affected by the stronger Taiwan dollar income from domestic economic activity exceeds income from exports, 75. Which of the following sentences is TRUE of both passages 4 and 5? pomp ‘There are weaknesses in both the Malaysian and Taiwanese governments. The economies of both Malaysia and Taiwan are on the mend. Domestic demands of both Malaysia and Taiwan are increasing. ‘The current economic situation has hurt all exporters in Malaysia and ‘TaiwanLevel 6 Practice Paper | Pmswer Ley SECTION IV (READING) Deas esoates 4 A 59 Cc 42 B 60 Cc 43 Cc 61 B 44 D 62, c 45 D 63 A 46 A 64 Cc 47 B 65, B 48 D 66 c 49 D 67 D 50 c 68 D SL A 69 D 52. A 70 D oe. c 7 A 54 D 72 c 55 c B c 56 Cc 74 D a B B B 58 £