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Seminar on Business Challenges
and Opportunities in Malaysia
“Trade and Investment Opportunities in Malaysia”
By
Mr. Mohd Iqbal Mohd Noor
Economic Counsellor, Embassy of Malaysia
Mr. Jai Shankar Suppayah
Trade Counsellor, Embassy of Malaysia
25 November 2010
Richmond Hotel, Nonthaburi, Bangkok
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Outline:
1. Malaysia: Overall Economic Environment
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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
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Liberalisation under AFTA
AEC Realisation in 2015
Import Licensing Review
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Outline: (Continue)
Investment Opportunity
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Incentives by Government
Liberalisation Efforts by Government
Improving Business and Investment Environment
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The Special Task Force to Facilitate
Business (PEMUDAH)
Business Licensing Electronic Support System
(BLESS)
The Performance Management and Delivery Unit
(PEMANDU)
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Outline: (Continue)
3. Way Forward
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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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1.
Malaysia: Overall Economic Environment
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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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1.
Malaysia: Overall Economic Environment
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Top 10 Foreign Invertors
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Australia;
USA;
Japan;
Germany;
Spain;
Singapore;
Netherlands;
British Virgin Islands;
Taiwan; and
Switzerland
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1.
Malaysia: Overall Economic Environment
Factors that Attract Investors into Malaysia
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Supportive Government Policies
Educated Workforce
Developed Infrastructure
Vibrant Business Environment
Quality of Life
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1.
Malaysia: Overall Economic Environment
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
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1.
Malaysia: Overall Economic Environment
●
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
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GDP: 2010
● Sign of improvement
● Efforts by Government
● GDP to grow at 6% in 2010
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1.
Malaysia: Overall Economic Environment
Economic Bilateral between Malaysia and Thailand
Malaysia-Thailand Trade Performance
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
0.7
Source: Matrade
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1.
Malaysia: Overall Economic Environment
● Thailand is Malaysia’s Top 5 trading partner
Major export to Thailand
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electrical and electronic products
crude petroleum
chemical and chemical products
other manufacturers
machinery, appliances and parts
Major import from Thailand
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electrical and electronic products
transport equipment
chemical and chemical products
crude rubber
machinery, appliances and parts
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1.
Malaysia: Overall Economic Environment
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
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Source: BOI
Services
Electrical and Electronics
Chemical and Paper
Metal Products and Machinery
Agricultural products
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1.
Malaysia: Overall Economic Environment
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
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fish product
vegetable products
palm oil
prepared food stuffed
mineral products
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chemical product
plastic rubber
leather
wood product
foot wear
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ceramic products
paper products
precious stones
based metal (iron and
steel)
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machinery
vehicles
manufactire items
work of art
● Asean Economic Community Realisation in 2015
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2.
Trade and Investment Opportunities in
Malaysia: Measures undertaken by Government
and Regional Commitment.
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)
1. Greater Kuala Lumpur 9. Communication
10. Education
2. Oil, Gas & Energy
11. Agriculture
3. Financial Services
12. Health Services
4. Wholesale & Retail
5. Palm Oil
6. Tourism
7. Electrical &
Electronics
8. Business Services
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2.
Trade and Investment Opportunities in
Malaysia: Measures undertaken by Government
and Regional Commitment.
Investment Opportunity
Incentives for Manufacturing Companies
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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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INVESTMENT
OPPORTUNITIES
Subject to domestic legislation, AFAS
threshold commitments have allowed
for greater movement of investment
(most notably under commercial
presence) within ASEAN compared to
other multilateral commitments so
far.
Furthermore, potential investors have
a variety of sectors to invest and
create valuable economic linkages in.
INVESTMENT
OPPORTUNITIES
Current No. of Sectoral
Commitments Made
B
C
I
L
Mal
M
P
S
T
V
Professional Business
Services
6
8
7
10
10
6
14
7
7
9
Healthcare
5
3
5
3
5
9
3
8
5
5
Computer Related Services
6
6
3
5
7
5
6
4
5
6
Research & Development
3
-
1
3
5
-
3
4
7
1
Real Estate
-
-
-
-
-
-
2
1
2
-
Rental & Leasing (w/o
operator)
5
2
1
4
5
1
6
4
7
1
14
10
12
8
18
6
13
22
17
7
Postal and Courier
-
1
-
1
-
1
2
1
-
1
Telecommunication
16
17
25
12
21
15
21
23
19
20
Audiovisual
-
-
-
4
2
5
3
1
5
4
Construction & Related
Engineering
8
8
8
8
8
8
8
8
8
8
Distribution
-
10
3
3
9
2
1
7
4
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Other Business
INVESTMENT
OPPORTUNITIES
Current No. of Sectoral
Commitments Made
B
C
I
L
Mal
M
P
S
T
V
Education
5
4
4
8
7
5
-
1
9
4
Environmental
-
6
4
6
4
3
2
3
9
4
Social Services
-
-
4
-
1
1
-
7
-
1
Tourism
3
5
12
5
8
6
4
9
9
5
Recreational, Cultural and
Sporting
3
2
3
-
5
4
3
3
7
2
Transport-Maritime
3
2
5
6
6
4
10
6
9
6
Transport-Inland Waterways
-
-
5
4
-
-
-
-
-
2
Transport-Space Transport
1
-
-
-
-
-
-
-
-
-
Transport-Rail Transport
4
-
5
-
-
-
4
-
3
2
Transport-Road Transport
-
7
3
1
1
-
5
7
5
2
Transport-Pipeline
-
2
-
-
-
-
2
-
-
-
Auxiliary Services to All
Modes of Transport
3
1
3
3
4
3
4
2
4
6
Other Services NIE
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-
2
1
1
-
8
-
1
-
2.
Trade and Investment Opportunities in
Malaysia: Measures undertaken by Government
and Regional Commitment.
Investment Opportunity
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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2.
Trade and Investment Opportunities in
Malaysia: Measures undertaken by Government
and Regional Commitment.
● 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.
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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
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.
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Government Transformation
Programme (GTP)
upgrade living
standards of
low-income
households
Reduce
crime
Combat
corruption
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NKRAs
upgrade rural
basic
infrastructure
upgrade urban
public
transportation
widen
access to
quality
education
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Economic Transformation Programme
The ETP with 131 Entry Point
Projects (EPP) valued at USD 138
Billion has identified 60 business
opportunities. The projects will
provide 3.3 million job
opportunities that will generate
Gross National Income (GNI)
totaling USD523 Billion by 2020
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Goals of the New Economic
Model
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What are the new approaches to the
NEM economic development
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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
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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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Malaysia – Moving Forward
Government
Transformation
Programme,
New Economic
Model
Private sector leads,
Government Facilitates,
Review of subsidies,
Innovation, creativity,
value-added activities
10th Malaysia Plan
Government will WALK THE TALK.
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3.
Way Forward
Malaysia as a competitive trading partner and
strategic investment location
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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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