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The Benefit of AEC Integration to ASEAN Supporting Industry by John Lee, Chairman of International Business Committee, Federation of Malaysian Manufacturers Malaysia’s Economic Outlook • Economic strength of Malaysia: • • • • • Natural resources: Crude Oil, Natural Gas, Tin, Timber, Palm Oil & Rubber GDP Growth: 4.7% (2013) Per capita income: RM31,698 (USD 10,060) Exports: 67% manufactured goods of total exports Supportive Government Policies • • • • Pro-Business policies – Economic Transformation Programme (ETP) Responsive government and good public service delivery Liberal investment policies – manufacturing sector free from equity conditions Attractive tax and other incentives Developed Infrastructure • • • • • Network of highways and railways Well-equipped seaports and airports High quality telecommunications network and services Fully developed industrial parks, including free industrial zones, technology parks and Multimedia Super Corridor (MSC) Advanced MSC Malaysia Cybercities and Cybercentres. Vibrant Business Environment • • • • • • • Ease of Doing Business – Major reforms in Immigration, company laws, registration properties, dealing with construction permits and starting a business Market-oriented economy Well-developed financial and banking sector, including the Labuan International Business and Financial Centre Wide use of English, especially in business, legal and accounting practices based on the British system Large local business community with a long history in international business links Large foreign business community in all business sectors Extensive trade links - country's total trade was valued at RM1.37 trillion in 2013 Market Access through Free Trade Agreements • • • • • • Malaysia-Japan Economic Partnership Agreement (EPA) Malaysia – Pakistan Closer Economic Partnership Agreement Malaysia-New Zealand FTA (MNZFTA) Malaysia-Chile Free Trade Agreement (MCFTA) Malaysia-Australia Free Trade Agreement Malaysia-Turkey Free Trade Agreement … and more Malaysian Companies in ASEAN ASEAN Companies in Malaysia AEC for the Manufacturing Industry • • • • • • Reduce or eliminate the barriers of investment and trade Align national regulations to regional commitments Operational efficiency and lower operating cost Gain access to capital, technology and raw materials with little or no barriers. Free movement of skilled and unskilled labour Greater equity participation in infrastructure projects Opportunities for Hi-Tech Manufacturing Sectors • • • • Investment in machinery and equipment continue to be our primary engine of growth Malaysia’s main forte in moving manufacturing forward with sub-sectors such as aerospace, automotive, and shipbuilding machinery and equipment and electrical machinery A hub for aerospace manufacturing, with main investors ie. Honeywell, JMI Aerospace, and Spirit AeroSystems establishing manufacturing plant. Malaysia is seeking to capture at least 5 percent of the global aircraft maintenance repair and operations market by 2015 Opportunities under the Economic Transformation Programme (ETP) • • • • • • • Improving water and sewerage systems Rejuvenating existing fields through Enhanced Oil Recovery Improving upstream oil palm productivity Building sustainable energy platform for growth Revitalising the E&E sectors Strengthening product quality and marketing efforts to penetrate global export markets Strengthening the export capability of the processed food industry Upcoming ETP Projects • • • • • Hewlett-Packard (HP) manufacturing facility to produce printer heads for high-speed inkjet printers – RM 1 billion Penang-based Globetronics Technology Bhd to develop a new range of light-emitting diode (LED) chips – RM 40 – 50 million Boilermech Holdings Bhd to build a new production facility – RM 60 million Abbott to build a manufacturing plant in Kedah to make intraocular lens (IOLs) for use in the treatment of cataract – USD60 million Austria’s Semperit AG Holding to build a new plant in Perak to raise its production capacity – RM 220 million Benefits of AEC • • • • • • • Connected to trading partners through Preferential Trading Agreements Liberalization of Services in 10 packages covering 12 broad sectors Tapping on ASEAN’s Talent Pool Collaboration in Transport Services Collaboration in ICT Collaboration in Energy Sector Collaboration in the Minerals Sector ASEAN Chairmanship 2015 • • 2015 marks a significant year for Malaysia as the chair of ASEAN Leading 620 million people into economic integration through AEC and mandated to: • • • • improve welfare and achieve the priorities of ASEAN; be the front runner to overcome challenges for the benefit of all ASEAN Member States; represent ASEAN to strengthen and promote closer relations with Dialogue Partners; and represent ASEAN at the various regional and global forum AEC focus areas in 2015 • • • • • • • • Single Market – Substantial Elimination of Import Duties on Goods Substantial Liberalization of Services Sub-Sectors Comprehensive, Open and Transparent Investment Regime Improved Logistical Connectivity, Encompassing Facilitation in Movement of Goods and Open Skies Transport, Trade Facilitation through Improved Customs Clearance Procedures and ASEAN Single Window Implementation of Self-Certification Scheme for Preferential Trade Enhanced Cooperation in the Areas of Consumer Protection, IPR and Competition Policy Creation of Highly Integrated ASEAN Conclusion • • ASEAN as a magnet for investment, trade and tourism. India and the 10-nation ASEAN bloc are setting the new bar for international manufacturing standards. Malaysia is at the heart of this trend striking a fine balance between mid and high-tech manufacturing capabilities and competitive labour environments. That coupled with the country’s economic development driven by export oriented manufacturing sector makes Malaysia a top choice for foreigners to invest in the industry. Q & A… Thank you…