seminar on business challenges and opportunities in malaysia “trade and investment opportunities...
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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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1. Malaysia: Overall Economic Environment
● 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
● Top 10 Foreign Invertors
○ 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
● 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 88
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
● 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
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
1. Malaysia: Overall Economic Environment
● 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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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
● Services● Electrical and Electronics● Chemical and Paper● Metal Products and Machinery● Agricultural products
Source: BOI 1212
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
● 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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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)New Key Economic Areas (NKEA)New Key Economic Areas (NKEA)New Key Economic Areas (NKEA)
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2. Trade and Investment Opportunities in Malaysia: Measures undertaken by
Government and Regional Commitment.
Investment Opportunity
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 --
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.
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)
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.
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Government Transformation Government Transformation Programme (GTP)Programme (GTP)
Government Transformation Government Transformation Programme (GTP)Programme (GTP)
Economic Transformation ProgrammeEconomic Transformation Programme
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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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