Malaysia’s Economic Development with emphasis on Public-Private Collaboration

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By

Dato’ Abd. Rahman Husin, Deputy Director General (Sectoral),Economic Planning Unit,MALAYSIA

May 2006

World Bank PSD Conference

2BRIE

FING

OUT

LINE

Privatization3

2Public-Private

Sector Collaboration –An

Overview

Sectoral Perspective -

Industrial Clusters

4

Malaysia, EPU & Development Planning

1

Conclusion5

MALAYSIA AND ETHIOPIA

Independence : 31 August 1957 Form of State : Federated constitutional monarch Administrative Division : 13 states and 3 Federal Territories Total area : 330,242 sq km

Land : 329,042 sq km Water : 1,200 sq km (Ethiopia : 1.1 million sq km – land area)

Climate : Tropical; annual southeast (April-Oct) and northeast (Oct-Feb) monsoons

Land Use : Arable land : 3 % Permanent crops : 12 % Forests : 68 % Others : 17 %

Language : Bahasa Malaysia (Official), English, Chinese, Tamil Religions : Islam, Buddhism, Hinduism, Christianity & Others

Country ProfileM

ALA

YSIA

: G

EO-P

OLI

TIC

AL

STR

UC

TUR

E

Map

5

MAIN FUNCTIONS OF EPU• Formulate policies and strategies in development planning• Prepare long and medium term plans• Prepare development programmes & project budget• Monitor & evaluate the achievement of development

programmes & projects• Advise government on economic issues• Initiate & undertake necessary economic research• Plan & coordinate the privatization programme & evaluate its

achievement• Coordinate Malaysia’s involvement in the development of

the Growth Triangle Initiatives• Initiate & coordinate bilateral & multilateral assistance• Manage the Malaysian Technical Cooperation ProgrammeEP

U M

ALAY

SIA

ORGANIZATIONAL STRUCTURE OF THE EPU

Director General

Deputy Director General(Macro Planning Division)

Deputy Director General(Sectoral Planning Division)

Industry & E. Services

Privatization

Infrastructure & Utilities

Social Services

Development Budget

Technical Services

Agriculture

Energy

Macroeconomics

Distribution

Human Resources

Regional Economics

External Assistance

Secretariat to the National Economic

Action Council

Secretariat to the Foreign Investment

Committee

General Services

Legal Adviser

Sections directly under the Director General

No. of officers : 250No. of staff : 150Total : 400

Environment

Knowledge Economy

7

Planning Horizon . . . LONG TERM PLANNING

– Vision 2020, 1991-2020– First Outline Perspective Plan (OPP1), 1971-1990– Second Outline Perspective Plan (OPP2), 1991-2000– Third Outline Perspective Plan (OPP3), 2001-2010

MEDIUM TERM PLANNING– Five-year development plans, such as the Ninth

Malaysia Plan (2006-2010)– Mid-term review (MTR) of the five-year Plans

SHORT TERM PLANNING– Annual Budget

PLAN

NING

HOR

IZON

AND

MAJ

OR

POLI

CY E

VOLU

TION

Major Economic Policies

• Laissez-faire / export-oriented• Economic and rural development

Growth with Equity, 1971-90

TOTAL DEVELOPMENT

BalancedDevelopment,1991-2000

Performance & Impact Oriented Development to achieve the goals of Vision 2020

Post-independenc

e1957-70

New Economic Policy (NEP)

National Development Policy (NDP)

National Mission

2006 - 2020

Vision 2020

Transformation From an Agro-based to an Industrial-based Economy . . .

1970 1980 1990 2000 2003 2005Agriculture Construction Manufacturing Mining Services

RM billion

0

50

100

150

200

250

53.9 %

31.9 %

8.9 %

46.8 %

24.6 %

16.3 %26.7 %

37.5 %

12.2 % 43.1 %

17.2 %

21.0 %

58.1%

31.4 %

8.2%

(GDP in RM billion at 1987 prices / Percentage to Total in italics)

300

8.7 %

57.6 %

30.8 %

Diversification Of Exports . . . (% to Total Exports)

Manufactures 11.9

Palm Oil5.1

Others9.8

Rubber33.4

Tin19.6

Forestry16.3

Oil & gas3.9

1970RM 5,163 million

(US$2,065 million)

2005RM 533,790 million

(US$141,588 million)

Manufactures 80.5

Palm Oil3.6Others

4.2Rubber

1.1Tin0.2

Forestry1.2

Oil & gas9.2

11

Real GDP Growth . . .Average 1971- 80Average 1981- 90Average 1991- 2000Average 2001- 05

2000200120022003200420052006e

7.5 %5.8 %7.1 %4.5 %

8.5 %0.3 %4.4 %5.4 %7.1 %5.3 %6.0 %

ECO

NO

MIC

PER

FOR

MA

NC

E

12

Open economy Mixed system Multi racial society A federation

DEVE

LOPM

ENT

PLAN

NING

The Guiding Parameters

13

Partners In Development . . .through a MIXED ECONOMIC SYSTEM of free

enterprise but with active government support and direction

The GOVERNMENT provides the broad thrusts and sets direction for the whole economy, and ensures the achievements of socio-economic goals

The PRIVATE SECTOR is free to operate and given appropriate policy, institutional and infrastructural support.

DEVE

LOPM

ENT

PHIL

OSOP

HY

DEVELOPMENT PLANNING MACHINERY

Cabinet Ministers

National Planning Council

National DevelopmentPlanning Committee

Inter-Agency Planning Group (IAPG)

Federal Ministries & AgenciesState Governments Private Sector

National Economic Action Council

(NEAC), National Economic

Consultative Council (NECC)

Economic Planning Unit

PARLIAMENT

Draft

Policy

Draft

Proposal

Proposal

ProposalCirculars Circulars

General framework

Consultations

Secretariat

National Action Council

Implementation & Coordination

UnitPrivate Sector

Dialogue

15

Malaysia Incorporated Policy . . . Launched in 1983 ~ marked the introduction of

structured public-private sector collaboration Stresses the importance of cooperation between

public and private sectors Establishment of several consultative panels/

dialogues comprising members from the public and private sectorBudget & MITI dialoguesMalaysian Business Council

Government began instituting major policy initiatives

PUBL

IC-P

RIVA

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OLLA

BORA

TION

16

MAJOR POLICY INITIATIVES Economic liberalisation & deregulation Improving investment policies & incentives Ensuring a business-friendly environment Administrative & institutional improvements

One-stop centres Systems & procedures for licensing Client’s Charter Productivity improvements – TQM, KPIs Public service delivery

Providing an integrated industrial infrastructureSU

PPOR

TING

PRI

VATE

SEC

TOR

INIT

IATI

VES

17

TOW

ARDS

202

0 ~

THE

NEXT

PHA

SE

Five Key Thrusts

To achieve the goals & objectives of Vision 2020

1. Moving the economy up the

value chain

2. Raising the capacity for

knowledge and innovation, and

nurturing “first class mentality”

3. Addressing persistent socio-

economic inequalities constructively and

productively

4. Improving the standard and

sustainability of the quality of life

5. Strengthening the country’s institutional

& implementation capacity ~ establish a

more effective implementing &

monitoring mechanism

Ninth Malaysia Plan, 2006 – 2010The National Mission, 2006 – 2020

18

Thrust1

To move the economy up the value chain

Increasing productivity, competitiveness & value-add Generating new sources of wealth & job creation in

technology- and knowledge-intensive sectors Giving a lead role to the private

sector, & increasing private sector investment by providing an enabling environment for doing business, enhancing SMEs development, increasing public-private partnerships as well as attracting targeted high-quality FDI

Inculcating a culture of high performance & excellence in public & private sectors including GLCs

Expanding market for Malaysian products and services

THE

NATI

ONAL

MIS

SION

,20

06-2

020

19

Thrust5 To strengthen the institutional &

implementation capacity

Improving public services delivery by strengthening governance, streamlining administrative processes and measuring performance

Improving usage and cost-efficiency of public sector funds by upholding financial prudence as well as improving the monitoring of implementation

Addressing actual and perceived corruption in both the public and private sectors

Enhancing corporate governance and delivery of private sector services by improving legal and regulatory frameworks

Strengthening the role of Parliament, media & civil society

THE

NATI

ONAL

MIS

SION

,20

06-2

020

20

PRIVATIZATIONPRIVATIZATION

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• Privatization policy was launched in 1983

• It represented a policy shift from public sector-led to private sector-led growth

• The policy has been an integral part of the national development policy of Malaysia

PRIV

ATIZ

ATIO

N PO

LICY

PRIVATIZATION POLICY

22

Reduce financial & administrative burden of the Government

Reduce public sector size & direct participation in the market place

Promote competition, efficiency & productivity

Accelerate economic growth Meet the targets of NEP, NDP & NNMPR

IVAT

IZAT

ION

POLI

CYObjective of Privatization . . .

SCOPE OF PRIVATIZATIONAirports RM10.0 bn /USS2.9 bn

Urban Transportation RM12 bn/US$3.2bn

Ports RM7.8 bn /US$2.1bn

Telecommunications/ multimedia RM6.6 bn /US$1.7bn

Power RM42.3 bn / US$11.1bn

Roads/highways RM31.6 bn/US$8.3bn

Water treatment

24

Existing Projects/Activities : Outright sale (assets or shares) Lease Management-Buy-Out Management Contract

New Projects : Build-Operate-Transfer (BOT) Build-Operate (BO) Build-Lease-Transfer (BLT)/Build-Transfer (BT)

Guiding Principle : Choose a feasible method which maximize private sector investment

Administrative machinery : Centralized planning and processing at the EPU Decentralized implementation by the ministries and State

Governments Standardization of terms and conditions of privatization

PRIVATIZATION METHODSPR

IVAT

IZAT

ION

POLI

CY

25

PRIVATIZATION ACHIEVEMENTS SINCE 1983

• Total privatized projects–Existing projects–New projects

• Workers transferred to the private sector

• Savings (RM billion)–Operating expenditure–Development expenditure–Proceeds from sale of Government equity

• KLSE market capitalization (Oct 2005)–RM billion (for 40 privatized entities)–% to total market capitalization

485346139

113,200

7.8154.0

28.9

174.123.0

PRIV

ATIZ

ATIO

N PO

LICY

26

PRIVATIZATION POLICY - LESSONS LEARNT

• Need strong commitment by the Government• Strong policy statements on private sector as the

engine of growth• Private sector must possess a certain level of

expertise and readiness to undertake project & investment risks

• Require a well-developed financial market to support large scale investment

• Need proper planning, monitoring & coordination to ensure success in implementation

• Necessary to undertaken rigorous evaluation on project viabilityPR

IVAT

IZAT

ION

POLI

CY

27

INDUSTRIAL INDUSTRIAL CLUSTERS –CLUSTERS –PUBLIC-PRIVATE PUBLIC-PRIVATE PARTNERSHIPPARTNERSHIP

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28

E&E Industrial Cluster• Major driver in transforming Malaysia from an

agricultural to industrial exporter• Took off in the early 1970s with export-oriented

industrialization strategy• Attractive investment climate:

Investment Incentives Act 1968 & Industrial Coordination Act 1975 provided better incentives to attract FDI in E&E sector

Key support institutions, infrastructure & services

Industrial Infrastructure Utilities & Telecommunications Air Cargo & Port Facilities HRD – PSDC, Industrial Training Institutes,

Universities and educated low-wage labour• Leading industrial subsector

28% of manufacturing value added (2005) 65.8% of exports of manufactured goods 26.8% of total manufacturing sector employmentPU

BLIC

-PRI

VATE

PAR

TNER

SHIP

Incentives FDI

29

Enhancing E&E Industrial Cluster – Development Strategies

• Moving the value chain up by encouraging MNCs to shift more sophisticated/high tech operations to Malaysia

• Deepening supply chain by developing capabilities in domestic firms

• Increasing value added through the technology acquisition & development

• Generating synergy with the development of ICT & multimedia industry

• Nurturing global Malaysian-owned companies e.g. Globetronics, ENG TechnologyPU

BLIC

-PRI

VATE

PAR

TNER

SHIP

30

CONCLUSIONCONCLUSION

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ROLE OF THE PUBLIC SECTOR

Strategic integrator & facilitator of development efforts in addition to its traditional role of administrator & provider of basic socio-economic infrastructure

Develop long, medium and short term plans in pursuit of national socio-economic development goals

Responsible for macro and socio-economic management towards socio-political, macroeconomic and financial stability

Enhance liberalization and deregulation towards creation of a conducive environment for private investment

Charting new directions and strategies for growth Custodian of public goods and spearheading social

programmes Governance by networks – collaborate with private firms,

industry associations and NGOs & engaging citizens

CONC

LUDI

NG R

EMAR

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ROLE OF THE PRIVATE SECTOR

Provide dynamism in spearheading the economy and be the engine of growth

Improve efficiency & productivity towards the creation of a competitive private sector

Engage foreign investors in mutually beneficial partnership and joint ventures

Embark on R&D and innovation activities for wealth creation

Develop long, medium and short term plans in pursuit of national goalsCO

NCLU

DING

REM

ARKS

33

CRUCIAL ELEMENTS FOR SUCCESS • Strong political and public sector support• Sufficient level of empowerment• Close collaboration among central

agencies Ministries and implementing agencies

• Strong partnership between public and private sectors

• Effective communication strategyCONC

LUDI

NG R

EMAR

KS

34

THANKTHANK YOUYOUwww.epu.jpm.mywww.epu.jpm.my

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35

HYPERLINKED HYPERLINKED SLIDESSLIDES

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37

Thrust2

To raise the country’s capacity for knowledge and innovation and nurture ’first class mentality’

Promoting Islam Hadhari as a comprehensive & universal development framework for the nation

Undertaking comprehensive improvement of the education system, from pre-school to tertiary level, from the aspects of curriculum and teaching to school facilities, with a special focus on raising the standard of schools in rural areas

Enhancing national schools to become the people’s “school of choice”

Producing universities of international standing and ensuring that tertiary institutions meet the needs of employers

creating more avenues for skills development, training and lifelong learning for the labour force at all levels and for all ages, including in ICT

Providing an environment and innovation system which encourages top-quality R&D and its commercialisation

Refining and implementing programs which encourage the development of a strong moral and ethical culture as encapsulated in the National Integrity Plan

Empowering youth & women to participate in national growth and development

NATI

ONAL

MIS

SION

,20

06-2

020

38

Thrust3 To address persistent socioeconomic

inequalities constructively & productively

Eradicating hardcore poverty by 2010 as well as reducing overall poverty

Reducing disparities between rural and urban population & among states & regions via sustainable income-generating avenues & by improving access to basic needs such as housing, education, healthcare, utilities & transportation

Developing less developed regions through regional growth centres

Bridging the digital divide Addressing inter- and intra-ethnic disparities,

particularly by raising incomes through the enhancement of skills & capabilities

Promoting equal opportunities in employment towards reducing disparities in occupation & income as well as enhancing integration among the ethnic groups

Creating a new generation of competitive Bumiputera entrepreneurs & enterprises

Reviewing past restructuring policies and programmes to evaluate their effectiveness and impact, and to focus future policies and programmes on merit and need

NATI

ONAL

MIS

SION

,20

06-2

020

39

Thrust4 To improve the standards and sustainability

of the quality of life

Ensuring better protection of the environment and more efficient usage of natural resources

Enhancing energy sufficiency and efficiency, including diversifying sources of energy

Increasing the efficiency of water services delivery

Providing better public transportation to relieve congestion and reduce fuel usage

Improving access to and quality of healthcare and affordable housing

Ensuring public safety and securityEnhancing the development and

promotion of Malaysian culture, arts and heritage

NATI

ONAL

MIS

SION

,20

06-2

020

40

Investment Incentives . . .

Pioneer status or Investment tax allowance for manufacturing companies

Incentives for small- & medium-scale enterprise

Training and R&D Grant Incentives for high technology

companies Incentives for strategic projects Incentives for R&D

SUPP

ORTI

NG P

RIVA

TE S

ECTO

R IN

ITIA

TIVE

S

BackOther Incentives

41

Investment Incentives . . .

Incentives for software development Pre-packaged incentives Incentives for exports General incentives

Industrial building allowance Infrastructure allowance Import duty exemptions for:

o raw materials / components and o equipment & machinery

SUPP

ORTI

NG P

RIVA

TE S

ECTO

R IN

ITIA

TIVE

S

42

Manufacturing Investment in Approved Projects, 2001- 2005

IndustryCapital Investment (RM million)

Number Domestic Foreign

Resource-BasedFood ManufacturingBeverages and TobaccoWood & Wood ProductsFurniture and FixturesPaper, Printing and PublishingChemical and Chemical ProductsPetroleum ProductsNatural GasRubber ProductsPlastic ProductsNon-Metallic Mineral ProductsNon-Resource-BasedTextiles and Textile ProductsLeather and Leather ProductsBasic Metal IndustryFabricated Metal ProductsMachinery Manufacturing Electronics and Electrical ProductsTransport EquipmentScientific and Measuring EquipmentOthers

1,948369

26193233123288

612

144358151

2,771178

12163487443

1,051353

8493

25,612 (46.2) 3,469 ( 6.3)

142 ( 0.3) 2,267( 4.1)

1,363 ( 2.5) 6,418 (11.6)

5,004 ( 9.0) 1,787 ( 3.2)

50 ( 0.1) 1,442( 2.6)

2,050( 3.7)1,620( 2.9)

29,303 (52.8) 1,171 ( 2.1)

57 ( 0.1) 9,308(16.8) 2,059( 3.7)

1,961 ( 3.5) 8,084(14.6)

6,157(11.1) 506( 0.9) 559( 1.0)

23,903 (31.0) 2,303 ( 3.0)

470 ( 0.6) 943 ( 1.2) 297 ( 0.4)

4,850 ( 6.3)3,025 ( 3.9)

6,289 ( 8.2) 0 ( 0.0)

963 ( 1.2)1,760 ( 2.3)3,005 ( 3.9)

53,068 (68.8) 947 ( 1.2)

17 ( 0.0) 5,502( 7.1)

2,177 ( 2.8)1,535 ( 2.0)

35,290 (45.7)5,388( 7.0)2,212( 2.9)

181 ( 0.2)

Total 4,812 55,474 77,152

Total

49,516 (37.3) 5,772 ( 4.4)

612 ( 0.5) 3,210 ( 2.4) 1,659 ( 1.3)

11,268 ( 8.5) 8,029( 6.1) 8,076( 6.1)

50 ( 0.0) 2,405( 1.8) 3,810( 2.9)4,625( 3.5) 82,371(62.1) 2,117( 1.6)

74 ( 0.1) 14,810 (11.2)

4,236 ( 3.2) 3,496 ( 2.6)

43,374 (32.7)11,545 ( 8.7) 2,718 ( 2.0)

740 ( 0.6)

132,626

43

TYPES Industrial Zones Special Commercial Premises SME Industrial Estates Technology Parks Industrial Corridors Business PremisesSU

PPOR

TING

PRI

VATE

SEC

TOR

INIT

IATI

VES

Providing An Integrated Industrial Infrastructure

44PUBL

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IPe-ENABLE SUPPLY CHAIN e-ENABLE SUPPLY CHAIN MANAGEMENTMANAGEMENT

• RosettaNet Malaysia - launched in 2002

• Joint initiative by Fed agencies (MITI, SMIDEC), State agencies (PDC), Manufacturers Association (FMM), MIMOS MNCs, SMEs & Solution Providers

• Enables Malaysian suppliers to link to global E&E supply chain

• Reduce inventory costs, time to market & lower transaction costs

• No. of companies successfully implemented RosettaNet Standards increased from 33 in 2004 to 327 in Mac 2006

45

ADDITIONAL SLIDESADDITIONAL SLIDES

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Solution Providers : Hewlett-Packard SalesMicrosoftOracle Penang Network Services Cardos Automation SystemKarenSoft  Technology*JSP Consultinge-BusinessLK SolutionsTradenex.comB2B CommerceNDT Software ConsultingSCS Computer Systems SAP Malaysia* Formfill Australasia Dagang NetNECBGlobalMnEBayGridNodeAdvanced Professional (India)Rank AlphaSterling CommerceJ.D. EdwardsPeopleSoftNovellGlobal EXchange

Foreign MNCs : IntelDellInventecIBMInfineonFairchildEricssonKemetSeagateLSI Logic

Malaysian Companies : LKT Industrial GlobetronicsPublic PackagesBCM ElectronicsTFS Electronics (Unico)1st SiliconPolytool TechLeong Bee Soo BeeIre-Tex D’nonceSan Yong EnterpriseFederal PackagesGenting Sanyen

Associations & Clubs: FMMGovernment:MIMOS,MITI,SMIDEC,PDC, MECM, EPU

RosettaNet Malaysia Partners include …

Logistics Providers: Priority Cargo

47

• 1 Corridor

• Bill of Guarantees

• 50 world-class companies

• Launch 7 flagship applications

• World-leading framework of cyberlaws

• Cyberjaya as world-leading intelligent city

• Web of corridors• 4,000 MSC Status & 250 MSC

Global companies.• 100,000 new jobs & RM69 bil

revenue & RM2.5 bil exports• Enhance ICT industry cluster• Enhance multimedia

applications • Leadership towards

harmonized global framework of cyber laws

• Link to world leading intelligent cities

• All of Malaysia

• 500 world-class companies

• Global test-bed for new multimedia applications

• International CyberCourt of Justice in MSC

• Become net ICT exporter

• Cybercities/cybercentres linked to global information highway

ICT & Multimedia Hub: MSC ICT & Multimedia Hub: MSC MilestonesMilestones

Transform Malaysia into a knowledge society

Phase 3

Grow MSC into a global ICT hub

Phase 1Create the MSC

Milestones1996 2003 2010 2020

The MSC: Next Leap

Atta

in l

eade

rshi

p in

the

Kno

wle

dge

Bas

ed

Econ

omy

48

MSC Phase 1

49

MSC Next Leap (2004 – 2010)

Rollout MSC Cybercities/Cybercentres….

Bayan Lepas, Penang

Kulim Hi-Tech Park

50

Flagship Applications

51

TargetMarket Shared Services

Pooling of resources to render common services cost-effectively, leveraging on economies of scale

Global/Offshore

LOCAL

INSOURCE OUTSOURCEServices delivered internally Partner with external provider

• Telekom Malaysia• Petronas

• User: BCB• Provider: EPIC-I (EDS)

Companies in MSC

52

• Malaysia is ranked 3rd globally for global outsourcing location attractiveness

• Well developed, low-cost infrastructure and strong government support

• Created 8,000 high-value job opportunities in MSC• SSO MSC created 12,000 jobs by end of 2005

Source: A.T. Kearney’s2004 Offshore Location Attractiveness Index: Making Offshore Decisions

53

Factor Conditions for Growth of MSC & Public-Private Sector Collaboration

Firm Government commitment Comprehensive package of incentives

Bill of Guarantees Infrastructure Cyberlaws Incentives

Competitive cost of doing business Emphasis on human capital development

SUPP

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S

Cont…

54

Factor Conditions for Growth of MSC & Public-Private Sector Collaboration

Effective Institutional Mechanisms for Policy Directions, Implementation, Monitoring & Coordination

International Advisory Panel Implementation Council Dedicated ‘one-stop’ agency – Multimedia

Development Corporation (MDeC) with investor-friendly mindset to facilitate private sector investment SU

PPOR

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PRI

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SEC

TOR

INIT

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Cont…

55

Bill of Guarantees• Provide a world-class physical and

information infrastructure• Allow unrestricted employment of local

and foreign knowledge workers• Ensure freedom of ownership by

exempting companies with MSC Status from local ownership requirements

• Give the freedom to source capital globally for MSC infrastructure, and the right to borrow funds globally

• Provide competitive financial incentives, including no income tax for up to 10 years or an investment tax allowance, and no duties on import of multimedia equipment

SUPP

ORTI

NG P

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ECTO

R IN

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TIVE

S

Cont…

56

Bill of Guarantees• Become a regional leader in

intellectual property protection and cyberlaws

• Ensure no Internet censorship• Provide globally competitive

telecommunications tariffs• Tender key MSC infrastructure

contracts to leading companies willing to use the MSC as their regional hub

• Provide an effective one-stop agency – Multimedia Development Corporation

SUPP

ORTI

NG P

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ECTO

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ITIA

TIVE

SCont…

57

Biotechnology Industry ClusterPU

BLIC

-PRI

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PAR

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SHIP

• Position biotechnology as a new engine of growth & wealth creation

• Transform and enhance value creation of the agriculture sector through biotechnology

• Capitalise on strengths of biodiversity to commercialise discoveries in health-related products

• Ensure growth opportunities in industrial bio-processing and bio-manufacturing

• Establish R&D centres of excellence and accelerate technology development via strategic acquisitions

• Build human resource capability • Create an enabling financial, legislative and

institutional framework• Foster greater public-private sector

collaboration through Bio-Nexus network

PHASE I(2005-2010)

Capacity Building

PHASE II(2011-2015)Science to Business

PHASE III(2016-2020)

Global Business

HR DevelopmentEst. Advisory and Implementation Councils

Est. Biotechnology Corp.

Capacity Building in R&D

Develop Agricultural, Healthcare and Industrial Biotechnologies & Bioinformatics

Develop Legal and IP Framework

Regional Biotechnology Hubs

Develop BioNexus Malaysia as a brand

Promote FDI participation

Initial job and industry creation

Develop expertise in drug discovery & devt.

New Products Technology

Acquisition Intensify FDI

participation Intensify Spin-

off Companies Strengthen

Local and Global Brands

Develop Capability in Technology Licensing

Job Creation

Consolidate Strengths and Capabilities in Technology

Further Develop Expertise in Drug Discovery and Devt.

Leading Edge Technology Business

Create greater value through Global Malaysian Companies

Re-branding of BioMalaysia as Global Hub

Competitive &

LeadingBiotechIndustry

BIOTECHNOLOGY ACTION PLANBIOTECHNOLOGY ACTION PLAN

59

Generating New Sources of GrowthGrowth Areas Competitive Advantage

• Agro-biotechnology– Higher value added crops

and foods– Natural products

• Health-Biotechnology– Bio-Generics– Diagnostics– Vaccines

• Industrial Biotechnology– “Green” Chemistry– Biocatalysts– Biomaterials– Bio-Manufacturing

• Strong Government support• Well established agro and

medical research base• One of 12 mega diversity

countries• Create niche market • Built upon local capability

• Demand for green technology applications

• Potential/new markets e.g. EU

• Environmental concerns

60

Bio-Nexus

IPNDengkil

Genome CentreUKM

IABUPM/MARDI

Food Cluster

Natural ProductsVaccines

Industrial-bio

Agro-bio

Bio-Nexus Network

Healthcare-bio

Interactions between institutions & industry

Industry NINPVBEnstek, Nilai

Platform Technology

61PUBL

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ARTN

ERSH

IP • 5,152 offshore companies from 93 countries

• LOFSA – a one-stop agency • Promoting Labuan as a unique

IOFC with specialization in Islamic financial products & services

• Strengthening legislation & guidelines

• Enhancing competitiveness to sustain attractiveness

• Incentives to attract strong foreign entities with global market linkages

Financial Services Cluster Labuan IOFC

62

Palm Oil Industrial Cluster (POIC)• Lahad Datu POIC - to add value to the

oil palm industry, create jobs & business opportunities

• Designated palm oil industrial cluster & logistic hub for east ASEAN

• Developed by POIC Sabah Sdn. Bhd. with support from Federal Government

• Equipped with adequate physical infrastructure to attract private investment in upstream & downstream industries

PUBL

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IP

63

Halal HubPU

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• Development of halal product industry cluster to capture the growing share of the world halal market potential

• Credibility and worldwide recognition of JAKIM’s halal certification system and logo

• Availability of needed resources and strong government support

• Establish Halal Industry Corporation• Provision of various incentives as well

as programmes for improvement in product quality and standards, training, promotion, branding & market access

• International M’sia Halal Showcase (MIHAS)

TIGeR’s Supply Chain Model

Global Buyers

1st Tier Suppliers

2nd TierSuppliers

Vertical Integration of local suppliersHorizontal Integration with other businesses, services and government into the GSC

Government

Govt. AgenciesService Providers