seminar on business challenges and opportunities in malaysia “trade and investment opportunities...

Seminar on Business Challenges and Opportunities in Malaysia

“Trade and Investment Opportunities in Malaysia”

By

Mr. Mohd Iqbal Mohd NoorEconomic Counsellor, Embassy of Malaysia

Mr. Jai Shankar SuppayahTrade Counsellor, Embassy of Malaysia

25 November 2010Richmond Hotel, Nonthaburi, Bangkok 11

Outline:

1. Malaysia: Overall Economic Environment

● Malaysia’s Competitiveness Ranking● Economic Performance● Response to Global Financial Crisis● Economic Bilateral: Malaysia-Thailand

2. Trade and Investment Opportunities in Malaysia: Measures undertaken by Government and Regional Commitment

Trade Opportunity

● Liberalisation under AFTA● AEC Realisation in 2015● Import Licensing Review

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Outline: (Continue)

Investment Opportunity

● Incentives by Government● Liberalisation Efforts by Government

Improving Business and Investment Environment

● The Special Task Force to Facilitate Business (PEMUDAH)● Business Licensing Electronic Support System

(BLESS)● The Performance Management and Delivery

Unit (PEMANDU)333

Outline: (Continue)

3. Way Forward

● Vision 2020 ● Malaysia Strategic under 10th Malaysia Plan

(2011-2015) ● New Economic Model ● Place Malaysia as Competitive Trading Partner

and Strategic Investment Location

4. Q & A

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● Foreign Policy● Economic Relations● Open Economy● Top 10 Trading Partner

○ Singapore; ○ USA;○ Japan;○ China;○ Thailand;○ Republic of Korea;○ Indonesia;○ Hong Kong;○ Taiwan; and○ Germany

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● Top 10 Foreign Invertors

○ Australia; ○ USA;○ Japan;○ Germany;○ Spain;○ Singapore;○ Netherlands;○ British Virgin Islands;○ Taiwan; and○ Switzerland

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Factors that Attract Investors into Malaysia

● Supportive Government Policies

● Educated Workforce ● Developed Infrastructure ● Vibrant Business

Environment ● Quality of Life

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Malaysia’s Competitiveness Ranking

● 18th Most Competitive Economy in the World – World Competitiveness Yearbook 2009, IMD

● Malaysia is the 21st largest exporting country and 28th largest

importing country in the world in 2008

● 16th in the FDI Confident Index – A.T Kearney’s 2007

● 13th Rank Globally for Capital Access – Milken Institute, USA – Capital Access Index (CAI) 2007

● 5th Least Expensive in the World for Rent of Prime Office Space & 11th Cheapest for Prime Industrial Space – King Sturge, UK – Global Industrial and office Rent Survey 2007

● 20th Ease of Doing Business – World Bank Report 2008

● 14th Preferred Destination for FDI – UNCTAD 2007 88


● Malaysia’s Economic Performance ● Performance of global economy ● Improve in domestic economic environment ● 2009 GDP : -1.7%

● Response to Global Financial and Economic Crisis● 2 Stimulus Packages Totalling

RM67 billion (USD18.2 billion)● Opportunity to restructure the

economy and to be more broad-based

● GDP: 2010● Sign of improvement● Efforts by Government● GDP to grow at 6% in 2010

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Economic Bilateral between Malaysia and Thailand

Malaysia-Thailand Trade Performance

Source: Matrade

Jan – July 2010

2009 2008

Values US Billion

Values US Billion

Values US Billion

Total Trade 12.6 15.8 18.3

Exports 6.6 8.4 9.5

Imports 5.9 7.4 8.8

Trade Balance 0.7 1 0.71010


● Thailand is Malaysia’s Top 5 trading partner

Major export to Thailand

● electrical and electronic products● crude petroleum● chemical and chemical products● other manufacturers● machinery, appliances and parts

Major import from Thailand

● electrical and electronic products● transport equipment● chemical and chemical products● crude rubber● machinery, appliances and parts

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Malaysian Investment in Thailand

● Malaysia is top 5 investors in Thailand

Value of Investment

● 2009: US$183 million● 2008: US$ 0.79 billion● 2007: US$ 0.17 billion

Major Areas of Investment

● Services● Electrical and Electronics● Chemical and Paper● Metal Products and Machinery● Agricultural products

Source: BOI 1212


Thai Investment in Malaysia

● 1981-Sept 2009 : US$ 316.72 million ● 125 projects (only 69 implemented) ● Area of investment include:

● Aquaculture feed● Heavy and light vacuum gas oil● Fertilizer● Auto Parts

Source: Central Bank of Malaysia

● Need to promote more investment from Thailand into Malaysia

● Liberalisation under AFTA● BOT Relaxation on outflow of fund

from Thailand

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2. Trade and Investment Opportunities in Malaysia: Measures undertaken by

Government and Regional Commitment.

Trade Opportunity

● Tariff Liberalisation under AFTA (More than 2000 tariff lines)

Product with Zero Duty

● Asean Economic Community Realisation in 2015

● fish product

● vegetable products

● palm oil

● prepared food stuffed

● mineral products

● chemical product

● plastic rubber

● leather

● wood product

● foot wear

● ceramic products

● paper products

● precious stones

● based metal (iron and

steel)

● machinery

● vehicles

● manufactire items

● work of art

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Trade Opportunity

● Import Licensing Review● Abolishment of approve permit (AP)

system● Gradually Liberalised other sensitive sector● Committment under WTO and Asean

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New Key Economic Areas (NKEA)New Key Economic Areas (NKEA)New Key Economic Areas (NKEA)New Key Economic Areas (NKEA)




Incentives for Manufacturing Companies

○ Pioneer Status ○ Investment Tax Allowance ○ Reinvestment allowance ○ Import Duty and Sales Tax Exemption ○ Incentives for SME ○ Incentives for Agriculture Sector ○ Incentives for R&D ○ Incentives for Regional

Office/Headquarters

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Subject to domestic legislation, AFAS Subject to domestic legislation, AFAS threshold commitments have allowed for threshold commitments have allowed for greater movement of investment (most greater movement of investment (most notably under commercial presence) notably under commercial presence) within ASEAN compared to other within ASEAN compared to other multilateral commitments so far.multilateral commitments so far.

Furthermore, potential investors have a Furthermore, potential investors have a variety of sectors to invest and create variety of sectors to invest and create valuable economic linkages in.valuable economic linkages in.

INVESTMENT OPPORTUNITIESINVESTMENT OPPORTUNITIES

INVESTMENT OPPORTUNITIESINVESTMENT OPPORTUNITIESCurrent No. of Sectoral Current No. of Sectoral

Commitments Made Commitments Made BB CC II LL MaMa

llMM PP SS TT VV

Professional Business Professional Business ServicesServices

66 88 77 1010 1010 66 1414 77 77 99

Healthcare Healthcare 55 33 55 33 55 99 33 88 55 55

Computer Related Computer Related ServicesServices

66 66 33 55 77 55 66 44 55 66

Research & DevelopmentResearch & Development 33 -- 11 33 55 -- 33 44 77 11

Real Estate Real Estate -- -- -- -- -- -- 22 11 22 --

Rental & Leasing (w/o Rental & Leasing (w/o operator)operator)

55 22 11 44 55 11 66 44 77 11

Other Business Other Business 1414 1010 1212 88 1818 66 1313 2222 1717 77

Postal and CourierPostal and Courier -- 11 -- 11 -- 11 22 11 -- 11

TelecommunicationTelecommunication 1616 1717 2525 1212 2121 1515 2121 2323 1919 2020

AudiovisualAudiovisual -- -- -- 44 22 55 33 11 55 44

Construction & Related Construction & Related EngineeringEngineering

88 88 88 88 88 88 88 88 88 88

Distribution Distribution -- 1010 33 33 99 22 11 77 44 1414

INVESTMENT OPPORTUNITIESINVESTMENT OPPORTUNITIESCurrent No. of Sectoral Current No. of Sectoral

Commitments Made Commitments Made BB CC II LL MalMal MM PP SS TT VV

Education Education 55 44 44 88 77 55 -- 11 99 44

Environmental Environmental -- 66 44 66 44 33 22 33 99 44

Social ServicesSocial Services -- -- 44 -- 11 11 -- 77 -- 11

TourismTourism 33 55 1212 55 88 66 44 99 99 55

Recreational, Cultural Recreational, Cultural and Sportingand Sporting

33 22 33 -- 55 44 33 33 77 22

Transport-Transport-MaritimeMaritime 33 22 55 66 66 44 1010 66 99 66

Transport-Transport-Inland Inland WaterwaysWaterways

-- -- 55 44 -- -- -- -- -- 22

Transport-Transport-Space Space TransportTransport

11 -- -- -- -- -- -- -- -- --

Transport-Transport-Rail TransportRail Transport 44 -- 55 -- -- -- 44 -- 33 22

Transport-Transport-Road TransportRoad Transport -- 77 33 11 11 -- 55 77 55 22

Transport-Transport-PipelinePipeline -- 22 -- -- -- -- 22 -- -- --

Auxiliary Services to All Auxiliary Services to All Modes of TransportModes of Transport

33 11 33 33 44 33 44 22 44 66

Other Services NIEOther Services NIE -- -- 22 11 11 -- 88 -- 11 --




Other Liberalisation Efforts by Government

○ Services Sector○ Foreign Investment Committee

(FIC) – deregulation of investment guidelines

○ Domestic Trade Sector Liberalisation (no more equity requirement in franchise, hyper stores and direct selling business)

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● To further promote trade and investment, Government has initiated

improvements in the business and investment environment through various mechanisms including:

○ The Special Task Force to Facilitate Business (PEMUDAH)

○ Business Licensing Electronic Support System (BLESS)

○ The Performance Management and Delivery Unit (PEMANDU)/GTP/NKRAs

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Improvements to Public Delivery System

Through PEMUDAH:

Areas Improvements

Starting a Business From 11 to 3 days

• Facilitating Business: MyCoID is the standard identification number of a business entity for use in its interaction with

Government agencies, from 1 January 2010.

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Improvements to Public Delivery System

• Trade Facilitation: Establishing the National Single Window

• Setting up New Commercial Courts (NCC) in Kompleks Mahkamah Jalan Duta - commercial cases, except for those related to Intellectual Property and Muamalat, disposed in 270 days from an average disposal time of 585 days, previously.

3. Way Forward

● To Continue to monitor global economic development○ To response appropriately○ Ensure sustainability economic resilience

● Vision 2020○ To be a developed nation by 2020○ Key thrust towards achieving the goals

include:● Enhancing competitiveness● Diversify export market● New sources of growth● Intensify research● HRD● Sustainable development

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Government Transformation Government Transformation Programme (GTP)Programme (GTP)


Objectives: to transform the Government delivery

system into rakyat (people) -centred and outcome-oriented; and

to move Malaysia forward to become an advanced, united and just society with higher living standards for all.

• GTP is in line with the national mission of achieving Vision 2020.

3030



Economic Transformation ProgrammeEconomic Transformation Programme

3131

The ETP with 131 Entry Point The ETP with 131 Entry Point Projects (EPP) valued at USD 138 Projects (EPP) valued at USD 138 Billion has identified 60 business Billion has identified 60 business opportunities. The projects will opportunities. The projects will

provide 3.3 million job provide 3.3 million job opportunities that will generate opportunities that will generate Gross National Income (GNI) Gross National Income (GNI)

totalingtotaling USD523 Billion by 2020 USD523 Billion by 2020

The ETP with 131 Entry Point The ETP with 131 Entry Point Projects (EPP) valued at USD 138 Projects (EPP) valued at USD 138 Billion has identified 60 business Billion has identified 60 business opportunities. The projects will opportunities. The projects will

provide 3.3 million job provide 3.3 million job opportunities that will generate opportunities that will generate Gross National Income (GNI) Gross National Income (GNI)

totalingtotaling USD523 Billion by 2020 USD523 Billion by 2020

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Goals of the New Economic Goals of the New Economic ModelModel

Goals of the New Economic Goals of the New Economic ModelModel

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What are the new approaches to the What are the new approaches to the NEM economic developmentNEM economic development

What are the new approaches to the What are the new approaches to the NEM economic developmentNEM economic development

• Productivity driven• Private sector led• Localised autonomy in decision making• Cluster – corridor – based economic activities• Favour Technologically capable industries and

firms• Emerging new markets and focus on Asian and

Middle East• Attracting skilled professionals

3. Way Forward

● Malaysia strategic direction under 10th Malaysia Plan (2011 – 2015)

○ Private sector role○ Achieving high income economy○ Developed nation status by 2020

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Government will WALK THE TALK.Government will WALK THE TALK.

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Malaysia – Moving ForwardMalaysia – Moving Forward

Private sector leads, Government Facilitates,

Review of subsidies,

Innovation, creativity, value-added activities

3. Way Forward

Malaysia as a competitive trading partner and strategic investment location

● To look for new source of growth● Significant role of private sector● Growth of domestic demand● High quality of investment

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3. Way Forward

● Summary:

○ Gradually recovering from the global economic crisis

○ Sign of Improvements○ Malaysia’s economy fundamental sound

with good infrastructure○ Responsive policies○ Open and liberal trade and investment

policies○ Improving trade and investment climate○ Committed upholding the rules-based

and open multilateral trading system

● Malaysia will continue to promote market-based economy with business-friendly and competitive environment.

● More opportunities for trade and investment

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