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					             MINUTES OF THE 16TH MEETING OF THE
       NATIONAL PROFESSIONAL SERVICES EXPORT COUNCIL
                          (NAPSEC)


Date                    :       27 June 2006 (Tuesday)

Time                    :       2.30 p.m. – 6.00 p.m.

Venue                   :       Bilik Mesyuarat Perdana
                                MATRADE, 7th Floor,
                                Wisma Sime Darby,
                                Kuala Lumpur

Chairman                :       Y.Bhg. Datuk Merlyn Kasimir
                                Chief Executive Officer, MATRADE

                                Y. Bhg. Dato’ Esa bin Mohamed
                                Board of Architects Malaysia


Members Present

Y. Bhg. Datuk Md. Sidek Ahmad
Board of Engineers Malaysia (BEM)

Y.Bhg. Datuk N. Arumugam
Malaysian Medical Association (MMA)

Y. Bhg. Datuk Haji Zakaria Hashim
ZL Management Services Sdn. Bhd.

Y. Bhg. Dato’ I. Dorairajoo
Professional Services Development Corporation (PSDC)

Dr. Chong Su-Lin
Association of Private Hospitals Malaysia (APHM)

Mr. Mohd. Zulkephli Mohd. Noor
Ministry of Foreign Affairs

Ms. Siti Halimah binti Ismail
Ministry of Finance

                                      1
Hajjah Ungku Anna Hj. Ungku Mohamed
Malaysian Professional Centre

Mr. Nik Mohd Hasyudeen Yusoff
Malaysian Institute of Accountants (MIA)

Ms. Wan Maimun Wan Abdullah
Institution of Surveyors Malaysia

Mr. Noordin Abbas
Export-Import Bank of Malaysia Berhad (EXIM Bank)

Mr. Dan E. Khoo
Association of the Computer and Multimedia Industry Malaysia (PIKOM)

Member’s Representatives

Dr. Nor Zari bin Hamat
Economic Planning Unit (EPU)

Dr. Wong Say Ho
Persatuan Industri Komputer dan Multimedia
Malaysia (PIKOM

Ir. Prem Kumar
Association of Consulting Engineers Malaysia (ACEM)

Mr. Mohd Zaid Zakaria
Construction Industry Development Board (CIDB)

Mr. Thomas Koon Peng
Bank Negara Malaysia

Mr. Khoh Joo Bee
Ministry of Works Malaysia

Mr. Kenneth Goh
Bar Council Malaysia

Mr. Rocky Wong
Institution of Engineers Malaysia (IEM)




                                    2
Ms. Norliza Hashim
Malaysia Institute Planner

Ms. Tan Pei Ing
Institution of Architects Malaysia (PAM)

Mr. Razeman bin Kamarulzaman
Association of the Computer and Multimedia Industry Malaysia (PIKOM)

Also Present

Mr. Noharuddin Nordin
Deputy Chief Executive, MATRADE

Mr. Zakaria Kamarudin
Director
Services and Product Promotion Division, MATRADE

NAPSEC Secretariat

Ms. Rusiah Mohamed

Mr. Arief Aaron Abdullah

Ms. Hasziah Mat Yazid

Mr. Mohd Hafiz Abdul Jalil

Mr. Mohamed Hafiz Md Shariff

Mr. Isa Farhin Abdullah

Absent with Apology

Y. Bhg. Tan Sri Dato’ Ir. Md. Radzi bin Mansor
Board of Engineers Malaysia (BEM)

Y.Bhg. Dato’ Ooi Say Chuan
Ministry of International Trade and Industry (MITI)

Y.Bhg. Dato’ Syed Jamal Syed Jaafar
Ministry of Works Malaysia



                                    3
Y. Bhg. Datuk Ir. Hamzah Hasan
Construction Industry Development Board (CIDB)

Y.Bhg. Dato’ Wan Mohamad Mukhtar Mohd. Noor
Board of Town Planners Malaysia

Ir. Prof. Dr. Ow Chee Sheng
Institution of Engineers Malaysia (IEM)

Dr. Choe Tong Seng
National Pharmaceutical Control Bureau
Ministry of Health

Ir. Henry E. Chelvanayagam
Association of Consulting Engineers Malaysia (ACEM)

Ms. Harvinder Kaur
Economic Planning Unit (EPU)

Mr. Marianus Vong Shin Tzoi
Bank Negara Malaysia

Tuan Haji Khutubul Zaman
Bar Council Malaysia




                                    4
1.   INTRODUCTION

     1.1   The Chairman welcomed NAPSEC members and their
           representatives to the 16th meeting of the council.

     1.2   The Chairman also introduced NAPSEC new members:
           Puan Siti Halimah binti Ismail (Ministry of Finance) and En.
           Mr. Mohd. Zulkephli Mohd. Noor (Ministry of Foreign Affairs)
           to the meeting.

2.   ADOPTION OF MINUTES OF THE 15TH NAPSEC MEETING


     2.1   The meeting adopted the minutes of the 15th NAPSEC
           meeting without any amendments.

3.   MATTERS ARISING

     3.1   Construction Projects in Iran.

           3.1.1 The meeting was briefed that to date CIDB still has yet
                 to receive feedback from the Ministry of Roads and
                 Transportation of Iran (MRTI) in regards to the
                 proposed counter trade mechanism and proposed
                 railway line technical aspects. However, a delegation
                 from MRTI is expected to visit Malaysia within August
                 2006 and CIDB mill take the opportunity to press on
                 the matter.

           3.1.2 The meeting was also informed that on 23rd June 2006,
                 a Joint Committee meeting chaired by Y.B. Datuk Seri
                 Rafidah Aziz had discussed the matter with her
                 counterpart from the Ministry of Commerce on Iran.
                 Among issues discussed were the collaboration
                 possibilities and other outstanding Iranian project. The
                 Joint Committee meeting also suggested for MRTI
                 representative to visit Malaysia to further discuss the
                 arising matters.

           3.1.3 The meeting also suggested that to do business in
                 Iraq, somebody who knows the routine and connection
                 may be used for Malaysian companies to be able to
                 move in and avoid formalities of dealing with the

                                   5
                   government. In this instance, the service of Mr. Syed
                   Kamaluddin, an Iranian may be used to directly
                   connect with METRA and other authorities in North
                   Iran.
                                                           Action: CIDB

           3.1.4 “Shuaiba Phase 3 Integrated Water and Power
                 Plant (IWPP): Opportunity for Professional
                 Services by Khazanah Nasional.

                      The meeting suggested that to promote local
                       project management (currently TNB utilized
                       foreign Project Management Professionals,
                       SIEMENS). Professional association such as
                       IEM, ACEM and BEM should establish “touch
                       base” with Malakoff and other local utility
                       company.
                      National     associations      should     undertake
                       workshops with GLCs in order to prepare them
                       for collaboration in the future oversea projects.

                                         Action: All NAPSEC Members.

           3.1.5 The Construction Industry Master Plan” by CIDB.
                    The meeting was informed that the Plan was
                      tabled at the Cabinet Meeting chaired by the
                      Deputy Prime Minister.
                                                    For information

4.   EXPORT PROMOTION STRATEGY & ISSUES.

     4.1   “Professional      Services    Export    (PSE)    Fund”     by
           MATRADE.

           4.1.1     The members were briefed regarding the PSE Fund
                     by MATRADE. The Fund will be tentatively launched
                     by the Minister on the 4th September 2007.

           4.1.2     The Fund would have to consider a range of
                     requests for grant assistance; differing both in the
                     nature of the assistance requested, and their
                     originating sources. To cater for these differences,
                     the Fund will have three types of grants namely:

                                    6
         Full grant;
            o Approved proposals will be eligible for a full
                or 100% grant from the Fund to defray all
                costs relating to feasibility studies and
                project management in the targeted
                sectors. This is subject to such proposals
                emerging from Government of Malaysia
                and its Agencies, Foreign Government and
                their Agencies and Bilateral and Multilateral
                Financing Agencies.
         Matching grant
            o Malaysian professional service providers
                can obtain matching grants or 50 per cent
                of the approved cost of the activities
                necessary for the preparation and
                submission of tender bids for project
                formulation, project implementation and
                project management.
         Conditional grant
            o This type of grant is for financing 50 per
                cent of the Malaysian professional service
                costs related to the preparation and
                submission of bids in respect of (i) design
                (ii) design and build projects and (iii)
                privatisation projects

4.1.3   The Fund, under the purview and stewardship of
        MITI, and managed by MATRADE would be
        underpinned by professionalism, transparency and
        accountability.

4.1.4   The Chairman wants a feedback from all members
        about the type of Fund that is available. He added
        that the Fund is not intended to seclude any services
        but to cover all sectors. The meeting was also
        informed that an ad-hoc committee will be setup for
        technical appraisal. In addition, the Chairman raised
        the issue of enforcement where MATRADE has no
        legal standing and mechanism to ensure that the
        Fund can be recovered.




                        7
4.1.5   BEM commented that this is will be the beginning of
        Malaysia’s professional services to be exported and
        venture abroad. They voiced their concerned on the
        difficulties in finding professionals who have the
        capacity and capability to embark into the world
        arena. In addition, BEM also believes that there is
        lack of support from the local MNCs to engage the
        services of local professional services.

4.1.6   KKR deemed that their interests will be represented
        by CIDB and PSDC and requested that they to be
        dropped from the Approval Committee. They also
        queried about the parties responsible on the vetting
        of the Memorandum of Understanding or agreement
        between two countries. Adding to these, KKR wants
        to know further on the time frame of approval before
        the projects commences.

4.1.7   ZL Management examined the timeliness of the
        decision making process since time is the essence
        for the Fund and suggested that sliding scale is used
        for Fund approval. Their views were affirmed by the
        Chair stated that bureaucracy in dispersing this Fund
        could actually stop the progress of a project. The
        Chair recommended that there should be certain
        flexibility in approving the Fund but cautioned that
        this Fund should not be abused.

4.1.8   IEM proposed to the members that all the views in
        the meeting shall be collated improved and minute
        upon in order for the dateline could be met.

4.1.9   PIKOM was concerned on whether the Fund covers
        all or only some services sector under GATS under
        the 4 modes of supply. They queried whether this
        Fund will replace the Market Development Grant
        (MDG). On the Approval committee, PIKOM voiced
        out their concerned that the Committee might not
        have the expertise and understanding of the sectors
        to appraise and approve certain projects. The
        Chairman affirmed that there will be an ad-hoc
        committee for technical areas. In replying to the
        issue brought up by PIKOM, the Chairman notified

                        8
              that the mode of supply under GATS must be closely
              examined in order for the Fund to be successful.

      4.1.10 The members were requested to give their views and
             feedbacks to further improve on the Fund by 30th
             June 2006.

      4.1.11 On the issue of commercial presence which was
             brought up by ZL Management, the meeting was
             informed that the Fund shall not cover the setting up
             of a firm in a foreign country but instead EXIM Bank
             explain to the meeting that a new fund which was
             recently announced by the government shall look
             into the matter.

                                   Action: All NAPSEC Members

4.2   “Export of Legal Services and Related Issues” by Bar
      Council

      4.2.1   The meeting was informed that the Bar Council
              manages the affair of the Malaysian Bar which is a
              body corporate established under the Legal
              Profession Act 1976 (Act). As of 20 June 2006, there
              are 12,115 members of the Malaysian Bar with total
              number of 5,352 firms.

      4.2.2   The meeting noted however that the Bar Council has
              no jurisdiction over the legal profession in Sabah and
              Sarawak as the Act is not applicable there. Foreign
              lawyers are also prohibited admissions into Malaysia
              except in specific situations which are stipulated in
              Section 18: ad hoc admissions issued by the courts
              and Section 28A: special admission certificate issued
              by the Attorney General.

      4.2.3   The General Agreement on Trade in Services
              (GATS) in Malaysia covers only the advisory and
              consultancy services in the Federal Territory of
              Labuan. Market access is only allowed in Labuan
              and legal services can be supplied by a corporation
              incorporated in Labuan to offshore corporations.



                              9
4.2.4   To face liberalization, the Bar Council has drafted
        amendment to the Act and rules to allow foreign
        lawyers admission under the Joint Law Venture
        context in which foreign lawyers will only be
        permitted to practiced in certain areas such as
        transactions regulated solely by any law other than
        Malaysian law, international capital markets and
        asset securitization.

4.2.5   On Malaysia side, Bar Council members are allowed
        to export their services and not prohibited from
        practicing overseas.

4.2.6   Among the difficulties identified in exporting legal
        services are insufficient expertise in certain types of
        transactions, brand recognition issues, source of
        transaction and capital issues, high cost of setting up
        offices overseas, differing national laws in different
        countries, competition especially from major
        international firms that offer full service and the
        relatively small number of Malaysian owned TNCs.

4.2.7   The Bar Council carried out a survey in 2004. From
        the 4,553 firms surveyed, only 149 firms responded.
        Among the significant findings of the survey are:
          The majority of the firm’s turnover for the year
           2003 are less than RM300,000 (52 per cent).
           Only 1 per cent registered turnover of more than
           RM20 million.
          65 per cent of the company surveyed has nil
           export of services. Less than 1 per cent of the
           firms surveyed registered services export
           turnover that is more than 40 per cent.
          The majority of the firms (39 per cent) agree to
           the proposition to allow foreign lawyers practicing
           in West Malaysia (in limited areas of practice)
           while 34 per cent disagreeing with 24 per cent is
           neutral.
          Only 8 per cent of the firm agrees for
           liberalisation to take effect immediately. However,
           majority of the firms (44 per cent) agreed for
           gradual liberalization but always be limited to
           some areas of practice only.

                        10
         11 per cent of the firms surveyed have
          association with foreign law firm.
         Only 23 per cent of the firms are currently
          exporting their services. The majority of the
          services exported using the Mode 1: Cross
          border supply (46 per cent) followed by Mode 2:
          Consumption abroad (44 per cent) and Mode 4:
          Presence of natural persons (10 per cent). None
          used Mode 3: Commercial presence.
         The legal services exported includes project
          finance of infrastructure (6 per cent), mergers
          and acquisitions (6 per cent), structured finance –
          including leasing and acquisition (5 per cent),
          arbitration and mediation (5 per cent) and
          structured finance – including leasing and
          acquisition (5 per cent).
         The export ready but yet to export firms mostly
          intended to export legal services in the mergers
          and acquisitions (8 per cent], project finance of
          infrastructures and intellectual property (6 per
          cent) and; arbitration and mediation, asset
          securitisation and structured finance – including
          leasing and acquisitions (6 per cent).
         Among the countries currently being exported are
          Singapore (9 per cent), Australia (6 per cent),
          Hong Kong, Indonesia (5 per cent), Thailand,
          India, China and United Kingdom (4 per cent).
         The export ready but yet to export firms identified
          Singapore (7 per cent) as the country they intend
          to export within five years followed by Brunei,
          Thailand and Indonesia (6 per cent] and;
          Australia and Hong Kong (5 per cent).

4.2.8   The Bar Council has also set a unit compromising
        members exporting or intending to export in order to
        encourage and monitor the export of legal services.

4.2.9   The meeting noted that the survey by Bar Council is
        comprehensive and could be used as template by
        the other professional services.
                                           For information



                       11
4.3   “Updates on MIA’s Strategic Initiatives for the
      Globalisation Era” by Malaysian Institute of Accountants
      (MIA).

      4.3.1 The meeting was briefed that the Malaysian Institute of
            Accountants’     (MIA)     involvement      in Services
            Liberalisation Negotiation started in 1999.

      4.3.2 MIA’s master plan “Globalisation and Liberalisation of
            Trade in Services – Challenges and Directions for the
            Malaysian Accountancy Services Sector” was launched
            in March 2004 to establish MIA’s objectives and
            strategic responses on how the accountants may
            benefit and face the challenges in the era of
            globalisation and liberalisation.

      4.3.3 MIA had identified 3 key challenges in the export of
            professional services:
                Direct Effects of Entry of Foreign Service
                  Providers.
                Export of Services.
                Education and Training, and Research and
                  Development (R&D).

      4.3.4   The meeting was also briefed on MIA’s export
              initiatives whereby the creation of the Focus Group
              on Export of Services was endorsed by the Council
              of MIA as medium to encourage the export
              awareness and initiatives. Membership of the Focus
              Group is done by invitation where preference was
              given to medium sized firms or small firms with niche
              capabilities and/or with some export or international
              experience.

      4.3.5   Among the proposed scope of activities are:
                 Maintaining a database of the Focus group, to
                  seek their feedback on the areas of export of
                  services;
                 Periodic meetings or gathering for exchange of
                  ideas and also talks from services export
                  experts from MATRADE, NAPSEC, MITI and
                  PSDC;


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                       Participation in trade missions (at their own
                        expenses), dialogues and      other initiatives
                        organised by above captioned bodies;
                       Mentoring system as the Group matures; and
                       Expand for newest member of the Focus
                        Group.

           4.3.6   A total of 19 invitations were extended to selected
                   firms and out of that number, 15 firms had agreed to
                   be included in the Focus Group.

           4.3.7   The Group has continued to be engaged by MIA on
                   their feedback with regard to services liberalisation,
                   in particular with regards to countries which Malaysia
                   is involved in Free Trade Agreements (FTA)
                   negotiations. The Focus Group is also continuously
                   updated via emails on seminars, training as well as
                   other initiatives beneficial for their export activities.

           4.3.8   The meeting was also informed that to move
                   forward, the Focus Group would also envisage
                   working closely with MATRADE to tap into
                   MATRADE's extensive expertise in the export arena.

           4.3.9   The meeting was further informed by MIA that
                   Malaysia has successfully won the bid for the “World
                   Congress of Accountants” in November 2010,
                   outbidding other countries such as India, Holland
                   and Mexico.

           4.3.10 In 2005, the countries of focus were Indonesia,
                  China, India and the Middle East region. For this
                  year, the Middle East region will be given more focus
                  particularly to specific countries in the region due to
                  the success of Shuaiba Phase 3 project.

                                                          For information

5.   TRADE REPORTS / MARKET ALERTS

     5.1   ICT Marketing Mission to Oman & Qatar, 27 – 31 May
           2006.


                                   13
5.1.1   The meeting was informed that in collaboration with
        the Multimedia Development Corporation (MDeC),
        Malaysia External Trade Development Corporation
        (MATRADE) organised a Specialised ICT Marketing
        Mission to Muscat, Oman and Doha, Qatar from 26 –
        31 May 2006. The mission was intended to promote
        ICT facilities and services to both countries of Oman
        and Qatar.

5.1.2   The members of the delegation comprised 7
        representatives from 6 MSC status companies, 3
        officials from     the   Multimedia  Development
        Corporation (MDeC) and 1 official from MATRADE
        Kuala Lumpur and 2 officials from MATRADE Dubai.

5.1.3   The programme that was arranged for the delegation
        included among others:
            Presentations on Malaysia’s Capabilities in the
              ICT sector; Strategic Alliances for Business
              Growth & Introduction of MSC Companies at
              the Malaysia Business Seminar & Business
              Partnership Exchange in Muscat, Oman on
              27th May 2006 and in Doha, Qatar on 30th
              May 2006.
             Individual business consultation sessions
              between Malaysian companies and local
              Omani and Qatari companies in both cities of
              Muscat and Doha.
             Presentation by Omani Centre for Investment
              Promotion and Export Development (OCIPED)
              on “Opportunities in the ICT & Services Sector
              in Oman” and presentation on “Opportunities
              in the ICT & Services Sector in Qatar” by
              Qatar Chamber of Commerce and Industry
              (QCCI).
             Visits to Knowledge Oasis Muscat (KOM),
              Ministry of National Economy, Oman, Qatar-e-
              government, ICT Qatar, Qtel and Al-Jazeera.

5.1.4   A total of 58 Omani and Qatari ICT companies
        participated at the “Malaysian Business Seminar &
        Business Partnership Exchange Programme held in
        Muscat on 27th May 2006 and in Doha on 30th May

                       14
              2006. The breakdown of the representations were as
              follows:
                   Muscat - 45 companies
                   Doha - 15 companies

      5.1.5   A total of 47 individual business meetings were
              arranged by the Secretariat for members of the
              Malaysian delegation in Muscat and Doha. The
              breakdown of the business meetings were as
              follows:
                   Muscat - 30 companies
                   Doha - 17 companies

      5.1.6   The meeting was further informed that the
              Specialised ICT Marketing Mission to Oman and
              Qatar has enabled more Malaysian ICT companies
              to be apprised of the potential of Oman and Qatar
              ICT markets and the level of technological
              advancement that both countries are currently
              pursuing in the ICT sector.

      5.1.7   Malaysian ICT companies were optimistic that
              Malaysian ICT companies could forge synergistic
              ties with Omani and Qatari counterparts in specific
              areas where Malaysia has the capabilities and
              expertise.

      5.1.8   All the Malaysian companies have indicated their
              interests to come back and pursue on specific
              business ventures with their Omani or Qatari
              counterparts.
                                              For information

5.2   Iraq Project & Construction Contracts.

      5.2.1   The meeting was informed that the Iraqi projects and
              construction contracts opportunities can be divided
              as follows:
                   Contracts by US Government
                       o Most opportunities for working on the
                          reconstruction effort in Iraq are through
                          subcontracting     with      the    Prime
                          Contractors    of     the    supplemental

                             15
                  appropriation of $18.4 billion that the U.S.
                  Government       appropriated     for Iraq
                  reconstruction in 2004 and beyond.
                o For the first round of the $18.4 billion of
                  U.S. reconstruction contracts, which were
                  awarded in March 2004, only companies
                  from the 63 Coalition and troop-
                  contributing countries were eligible to
                  compete as prime contractors.
                o Currently, for both construction and non-
                  construction projects, each solicitation is
                  subject to the soliciting agency's eligibility
                  requirements. Companies from all
                  countries are eligible for subcontracts,
                  except those on the Department of
                  Treasury Office of Assets Control country
                  sanction list.

            Contracts by Iraqi Ministry
              o Iraqi Ministries, including state-owned
                 firms and local governments, have
                 access to funds as part of their
                 operational and capital budgets and are
                 awarding contracts.
              o Iraqi Ministry tenders are generally
                 announced on Iraqi Ministry websites
                 where available or via advertisements in
                 Iraqi newspapers. Some newspapers,
                 such as Iraq Today (www.iraq-today.com)
                 are available on the Internet, for a fee, in
                 English. Other Iraqi papers can be found
                 at: www.onlinenewspapers.com/iraq.htm.
                 An extensive listing of tenders is
                 accessible via an internal page located
                 on the Baghdad Business Center’s
                 website:
                 http://www.baghdadbusinesscenter.org/T
                 enders.asp.

5.2.2   Iraq    reconstruction   prime    contractors   and
        subcontractors are responsible for choosing their
        own business partners, including subcontractors and
        suppliers.

                       16
      5.2.3   The meeting was further informed that interested
              companies are encouraged to review the contractors’
              websites for information on needs and bid
              requirements, and register on their database, where
              offered.

      5.2.4   A complete listing of U.S. Government contracts
              awarded, including contact information of the prime
              contractors and known subcontractors, is available
              from the U.S. Department of Commerce Iraq
              Investment & Reconstruction Task Force website at:
              http://www.export.gov/iraq/market_ops/contracts03.h
              tml and       http://www.export.gov/iraq/market_ops/
              contracts04.html.

      5.2.5   Example of areas which contract are already
              awarded are as follows:
                  Airport Administration
                  Agriculture Reconstruction and Development
                   for Iraq (ARDI)
                  Capital Construction
                  Economic Recovery, Reform and Sustained
                   Growth in Iraq
                  Local Governance
                  Personnel Support
                  Primary and Secondary Education
                  Public Health
                  Seaport Administration
                  Theater Logistical Support
                  Back to School Campaign
                  Health, Water and Sanitation Services
                  Health System Strengthening
                  The Higher Education and Development
                   (HEAD) program
                  Iraq Community Action Program (awarded to 5
                   NGOs)
                  Iraq Health Services Strengthening Project
                   (Abt Associates)

                                                 For information
5.3   Roads & Transport Authority of Dubai.


                             17
5.3.1   The meeting was informed that Dubai Road and
        Transport Authority (RTA) was formed in November
        2005 aiming to develop integrated solution of roads
        system and land and marine transportation network
        that are safe and in line with Dubai's economic
        development plan and the highest international
        standards.

5.3.2   Dubai is spending more than Dh25 billion to improve
        the city's road, traffic and transport services
        according to the Roads and Transport Authority
        (RTA) of which Dh15 billion is allocated for Dubai
        Metro and Dh10 billion for roads, traffic and public
        transport.

5.3.3   The Roads and Transport Authority's plan consists
        of the following elements:
             Reviewing strategic plans for traffic and
               transportation
             New mode of water transport
             Improvement of public transport system in
               Dubai
             Study on Dubai's parking needs
             Study on traffic congestion and the road
               situation in the city

5.3.4   Reviewing strategic plans for traffic and
        transportation.
             Reputed international consultants are hired to
              help prepare infrastructure development plans
              for ongoing and future projects to put in place
              a world-class public transport system and to
              encourage people to use it.
             Major projects focusing on improving traffic
              movement      and      road    networks      by
              implementing short and long-term plans by
              merging various projects and speed up the
              work.
             RTA is reviewing data and inputs by various
              departments regarding the traffic situation in
              the city. RTA is preparing a traffic and


                       18
               transportation model for the next 15 years until
               2020.

5.3.5    New mode of water transport.
            Water taxis will be introduced once the project
              is launched and expected to be implemented
              within one-and-a-half years.

5.3.6    Improvement of public transport system in Dubai.
             The RTA has earmarked Dh100 million to buy
              new buses, including articulated vehicles and
              luxury VIP buses to encourage people to use
              public transport.
             Urban transport planners to review existing
              routes and introduce new routes in Dubai to
              cope with the increasing number of users.

5.3.7    Study on Dubai's parking needs.
             RTA has identified the bottlenecks and other
               road problems causing traffic congestion.

5.3.8    Study on traffic congestion and the road situation in
         the city.
               Projects to solve parking problems will be
                launched after analyses of the study.
               Legislation will be drafted to introduce some
                new systems to ease traffic.
5.3.9    Among solutions identified are the introduction of a
         toll system, a dedicated bus lane, car sharing and
         banning the use of cars which are more than 10-
         years-old.

5.3.10   The private sector are to be involved in Dubai's road
         and traffic network projects as some works will be
         outsourced of services to ensure smooth
         implementation of projects.

5.3.11   Among major projects identified in Dubai are:
            Dubai Creek will have a total of six crossings
             within the next few years to ease traffic flow.
             Ras Al Khor Bridge, the fourth crossing, is
             under construction and will open in 2007.The


                        19
                    fifth crossing will be near the Sheraton hotel
                    while the sixth will be after the under
                    construction Ras Al Khor Bridge.
                   A major road improvement project to ease
                    traffic between Sharjah and Dubai on the Al
                    Ittihad Road will be finalized soon. The RTA
                    will spend around Dh1 billion on the major
                    project. It will be completed within one-and-
                    half-years after its launch.

      5.3.12   The meeting was further in formed that Malaysian
               companies could participate through private projects
               of Road Transport Authority and establish their
               presence by undertaking the laying down of the road
               infrastructure.

      5.3.13   The meeting commented that Dubai market is over
               saturated and not much scope left for the
               professional services sector with many people
               competing for jobs.

      5.3.14   The Malaysian Professionals should explore
               opportunities in new emerging markets such as
               Saudi Arabia and other Arab countries, Algeria and
               Libya.

                                                  For information

5.4   The Eastern European Region’s IT Market – A Dynamic
      Increase.

      5.4.1    The meeting was informed that it is expected that
               investments into IT may double in the Central and
               Eastern European Region by 2009 according to the
               forecast of IDC, an American market research
               company.

      5.4.2    By the end of this decade the annual IT expenditure
               might reach US$40 billion in the Central and Eastern
               European countries. In 2006, the increase of the
               Hungarian IT market is expected to be around 7 per
               cent.



                              20
5.4.3   Factors contributing to the expansion of IT market
        are increase of GDP, foreign investments and the
        strengthening of small and medium enterprises.
             In 2009 at least US$40.5 billion will be spent
              on IT related investments in the Czech
              Republic, Croatia, Poland, Italy, Hungary and
              Slovakia. In 2004 investments into IT
              amounted to US$20.4 billion.

5.4.4   The market’s main driving force in case of the four
        EU countries and also Croatia could be the IT
        development in connection with the governmental
        and public sectors’ modernization. In Russia, the
        increasing oil prices and the dynamically expanding
        economy are the key factors of the IT market’s
        expansion.

5.4.5   Market composition:
           The state is the biggest procurer.
           Home users are the second largest investor
             due to decreasing prices and the appearance
             of the products in the traditional retail trade.
           The third and fourth largest markets are the
             industrial    corporations      and        financial
             corporations.
           These four markets made up 46-47 percent of
             the total IT spending in 2004-2005. The
             industrial and financial sectors are expected to
             accomplish a two digit increase.
5.4.6   Composition of Money Spend on IT Investment are:
           Purchase of hardware components, more
             specifically on personal computers.
           Portable notebooks are on the rise as people
             are more mobile in their work nowadays.
           Software.

5.4.7   IT Investor Ranking
             Russia is the strongest IT investor in the
              region with 45 per cent total IT market.
             Poland comes second with 20 per cent,
             The Czech Republic.
             Hungary.


                        21
5.4.8    The meeting was also informed that the market of
         intelligent mobile devices, system and network
         infrastructure managing software and security
         solutions substantial increase is expected. Hardware
         purchase is decreasing in proportion compared to
         software     and    services,    especially   system
         management services, for which the demand is
         growing.

5.4.9    The report of the National Communications Authority
         (NHH) shows that there has been serious growth in
         the field of computer penetration in Hungary and a
         forecasted 7 per cent increase is expected on IT
         market in 2006.

5.4.10   In 2005, 54 per cent of the households own a
         computer. This means a 21 per cent increase
         compared to 2002, when the computer penetration
         was only 33 per cent. The number of computers per
         household is also increasing.

5.4.11   In 2005, 98 per cent of the households, that owns a
         computer, had a personal computer, 8 per cent had
         a portable computer and 6 per cent of the
         households had both types of computer. The latter
         proportion used to be 2 per cent in 2003, which
         means that the numbers of households with the two
         types of computers have tripled in one and a half
         years’ time.

5.4.12   Since 2004, the computer penetration into
         Hungarian households increased by 29 per cent. The
         role of information technology in adult and child
         education has increased considerably, which leads
         to the increase in the number of computers.

5.4.13   According to NHH, 36 per cent of the households
         with a computer would like to upgrade their
         computers with internet access. In 2004 this rate was
         30 per cent. The proportion of CD burners, printers,
         internet modems, scanners, DVD players showed an
         increasing trend in the households. Since 2003,

                        22
               computers in households have been upgraded with
               an average of 2 hardware units.

      5.4.14   Although is not a large market, Hungary offers great
               opportunities to Malaysian companies due to the
               following:
                    The current trend of favoring of the entrance
                      of new market players, with so far unknown
                      products. It is mainly the middle and low-end
                      products that sell well on the Hungarian
                      market.
                    The increasing purchasing power of
                      Hungarians also means increased demand for
                      such products. Most consumers have no
                      brand preference and realised that high price
                      does not necessarily mean high quality and
                      low price does not always mean low quality.

      5.4.15   Malaysian exporters may benefit from this behavior
               and preferences by improving promotional efforts to
               nurture and increase exports of Malaysian brands.

      5.4.16 Malaysian manufacturers should be flexible and able
             to manufacture       products under the importers’
             brands and also consistency in product quality and
             delivery is important, however pricing will be the final
             deciding factor by the importers when evaluating
             purchases.
      5.4.17 The meeting noted that the alert was skewed
             towards PC and hardware sector.

      5.4.18   As it was an attractive market, PIKOM suggested
               that the report to be dealt more towards ICT services
               and software.

                                                   For information

5.5   Building Materials and Construction Industry in Algeria

      5.5.1    The meeting was informed that building materials
               and construction industry in Algerian economy is
               undergoing rapid development. The total number of
               companies involved with the building and

                              23
        construction industry is     estimated   at   52,000,
        employing 800,000 people

5.5.2   The increasing development in the construction of
        residences, office buildings, public buildings and
        hotels had effected the following:
             Increased the production of several domestic
               sectors such as cement, roofing and flooring
               tiles and marble.
             A surge in demand for equipment and
               materials especially in the supply of materials
               and public works construction.

5.5.3   The construction industry is still dominated by
        foreign companies, particularly by Chinese from
        mainland China.

5.5.4   Majority of the projects under development were
        allotted to domestic companies which lack
        competence due to inexperience and poorly trained
        workforce.    To   address    this   shortcoming,
        programmes are established to encourage training
        through major construction companies such as
        Cosider, SNVI, SGP.

5.5.5   For the period of 2001 to 2004, the government has
        allocated a fund exceeding €1.9 billion for
        construction projects.

5.5.6   The meeting was also informed that a huge fund of
        US$60 billion has been set aside to finance a
        massive infrastructure projects from 2005 to 2009.
        Among the major projects to be carried out include:
            One (1) million housing units
            1,200 km east-west highway
            Underground metro
            A number of desalination plants
            Several dams and sewage treatment plants
            Renovation of the railway network and
             dredging of ports.




                       24
5.5.7    The capital injection was intended to diversify the
         economic base from the hydrocarbon sector and
         expanding the economy. The aim was to stimulate
         the domestic private sector and foreign companies
         are invited to tender on large-scale projects.

5.5.8    The Algerian government policy continues to
         aggressively attract foreign direct investment (FDI)
         with the aim to diversify and modernise the
         economy, there appears to be great opportunity in
         the building material and construction sector.

5.5.9    During the election campaign in 2004, the
         government has pledged 1 million homes to be built
         over 5 years and to provide 2 million jobs by 2009.
         The government is still continuing to sell of its state
         owned building and construction companies.

5.5.10   The Complementary Plan for Growth Support (2005
         – 2009) will definitely boost the building and
         construction activity in Algeria over the next five
         years.

5.5.11   Sustained measures to create a more conducive
         business / investment environment, such as allowing
         private firms to join the rank of state-owned
         enterprises in purchasing foreign goods directly from
         overseas market.

5.5.12   The outlook for 2006 is promising due to :
             The persistently high oil-price level.
             Algerian Government is expected to increase
              its spending as stipulated in Budget 2006. The
              government anticipates economic growth
              around 8 per cent and inflation at 3.5 per cent.
             The Government’s priority to accelerate the
              implementation        of    the      privatisation
              programmes, deregulation and restructuring of
              public enterprises as well as encouraging FDI
              into the country.




                         25
      5.5.13   Malaysia’s involvement both in trade and investment
               in Algeria is still far compared to other countries from
               Asia such as China and Korea.

      5.5.14   However, statistics have shown that there exist
               opportunities in the Algerian market and Malaysian
               exports continued to see an increase in trade for
               2004.
                                                  For information


5.6   High Growth Expected in China’s Software Industry

      5.6.1    The meeting was informed that China’s software
               industry is expected to maintain an annual growth
               rate of 30 per cent from 2006 to 2010, and valued at
               1.3 trillion Yuan (US$162.5 billion) by 2010.

      5.6.2    The Ministry of Information Industry (MII), China
               predicted that China’s software exports would reach
               US$12.5 billion by 2010, more than triple the figure
               for 2005, which was US$3.59 billion.

      5.6.3    The software industry is identified as the industry
               that could lead China towards the enhancement of
               its national strength and innovative capability.

      5.6.4    In 2005, the size of China’s software industry was
               valued at 390 billion Yuan (US$48.75 billion),
               compared with 44.05 billion Yuan (US$5.5 billion) in
               2000.

      5.6.5    The globalisation and adjustment of the information
               technology structure is creating opportunities for the
               software industry in China especially as the local
               industry is unable to meet the demands of social and
               economic development in the country.

      5.6.6    The MII has laid out several guidelines to help
               promote the software industry and will continue
               drafting industry policies and regulations that will
               benefit the development of the industry.



                               26
5.6.7    Among the initiatives are:
            The setting up venture capital groups or
             government procurement.
            China has emphasized the importance of IPR
             protection and the government has taken up
             the cause and cracked down on piracy in
             China. IPR protection will improve the overall
             environment for the software industry and
             create more demand in the market.
            The MII and the National Copyright
             Administration in April, 2006 issued a directive
             that all PCs produced and sold in China must
             be installed with authentic operating software
             systems

5.6.8    The MII will set up a software talent training system
         in the next five years.
              In 2005, China had 900,000 software industry
                workers, a figure expected to grow to around
                2.5 million within the next five years.

5.6.9    The MII aims to increase the number of key software
         enterprises with sales revenue of over 5 billion Yuan
         (US$625 million) in China.
             Four companies such as Huawei, Haier, ZTE
               and UTStarcom reported revenues above the
               5 billion Yuan figure.
             Another 26 companies reported revenue of
               above 1 billion Yuan (US$125 million).

5.6.10   The meeting was also informed that currently, two-
         thirds of the domestic market is dominated by foreign
         software products. The percentage is even higher in
         the system software realm.

5.6.11   China’s software industry lacks core technologies
         and a market-oriented technology innovation system.
         Chinese companies have no complete patented and
         systematic software products in operation systems,
         database management systems, and key appliance
         software. Investment in software R & D has long



                        27
               lagged behind competitors, with imitating and
               copying encouraged.

      5.6.12   The telecommunication sector in China provides an
               excellent avenue for Malaysian software developers
               and suppliers.
                   Currently, there are over 300 million mobile
                      subscribers in China.
                   Several million new users are added each
                      month, straining the infrastructure of carriers.

      5.6.13   Software is critical to support the growing number of
               users as well as services. The telecom industry is to
               some extent monopolized as here are only a handful
               of carriers which has great bargaining powers.

      5.6.14   Malaysian IT companies may cooperate with its
               Chinese counterparts in the form of the exports of
               expertise and human resource to China.

      5.6.15   Malaysia’s customer-tailored software products
               should identify niche market segment to make
               headway into the Chinese market.

      5.6.16   The meeting was further informed that Malaysia is
               competitively ranked as the global Shared Services
               and Outsourcing provider. MDeC has collaborated
               with few companies in India such as WiPro and
               Satyam.
                                                  For information

5.7   Abu Dhabi Saadiyat Island AED 100 Billion Project

      5.7.1    The meeting was informed that Abu Dhabi unveiled
               plans to develop Saadiyat Island into an international
               tourism destination by attracting about AED 100
               billion (US$27.24 billion) in three phases through
               public-private partnerships.

      5.7.2    The    company,    Tourism     Development        and
               Investment Co. (TDIC), will have an initial capital of
               AED 100 million and would be fully owned by the
               Abu Dhabi Tourism Authority.

                               28
5.7.3   This major development is being offered on a
        freehold basis with non-GCC investors being offered
        99-year leases or 50-year renewable leases.
        Saadiyat will be developed in three phases with total
        completion scheduled for 2018.

5.7.4   The master plan envisages six highly individual
        districts with 29 hotels, including a seven-star resort,
        three marinas, museums and cultural centres, two
        golf courses, civic and leisure facilities, sea-view
        apartments and elite villas.

5.7.5   The six island districts are:
            Cultural District
            Al Marina,
            Saadiyat Beach,
            South Beach,
            Saadiyat Park and
            The Wetlands

5.7.6   Tourism Development and Investment Company
        (TDIC)
            Owned by Abu Dhabi Tourism Authority
              (ADTA)
            Saadiyat Island covers an area of 27 sq. km.
            It is 500 metres offshore north-east of Abu
              Dhabi city.
            Saadiyat Island means Island of Happiness.
            The island has sensitive mangrove reserves.
            Saadiyat will be lined to Abu Dhabi city via two
              causeways. Each with10-lane freeways.
            Provision for light rail transport is made.
            Abu Dhabi has 200 natural offshore islands.
            This will attract AED 100 billion worth of
              investment

5.7.7   Saadiyat Island Development: Facts And Features
           Infrastructure cost       : AED 5.5 billion
           Hotels with 7,000 rooms : 29
           Golf Courses              :2
           Villas                    : 8,000

                        29
            Apartments                 : 38,000
            Home to residents          : 150,000

5.7.8   Abu Dhabi has recently seen launching of new mega
        developments in the construction sector with the
        announcement of big scale tourism, residential and
        landscape projects inviting investments from
        nationals and foreign based companies interested to
        construct and show case their skills and expertise in
        different areas.

5.7.9   Malaysian contractors and consultants looking for
        projects overseas should consider Abu Dhabi apart
        from Dubai to set up office and take up construction
        work in association with reputed local companies
        and bid for these developments.

5.7.10 Other Mega Projects in United Arab Emirates are:
           Al Raha Beach Development: AED 54 billion,
             Al Reem Island: AED 45 billion
           Abu       Dhabi       International    Airport
             Redevelopment: AED 25 billion

5.7.11 The meeting suggested for a Specialised Markeitng
       Mission to be conducted to tap into the vast potential
       of Abu Dhabi and surrounding region development in
       order to introduce and expose Malaysian
       professional service providers.
5.7.12 The project will include the spillovers from
       constructions such as ICT, Power Generations,
       Sanitation, Salination and telecommunications.

5.7.13 It was suggested the mission should also be used to
       find local counterparts, market intelligence and
       lobbying projects.

                            Action: Wisma Putra and PSDC




                       30
6.    MARKETING TOOLS

     6.1   Workshop on “Exporting Services Successfully”, 13th July
           2006 at Seri Pacific Hotel, Kuala Lumpur

           6.1.1 The meeting was informed that MATRADE and PSDC
                 with the collaboration of International Trade Centre will
                 be organising a workshop on Exporting Services
                 Successfully on the 13th July 2005 at Seri Pacific Hotel
                 Kuala Lumpur. The workshop will start from 9.00am and
                 end at 5.00pm. The workshop will be facilitated by Ms.
                 Doreen Conrad, Chief, Trade in Services Section,
                 International Trade Council/UNCTAD/WTO in Geneva
                 who has been actively working on the international
                 marketing and exporting of services

           6.1.2 The objectives of this workshop are to provide a platform
                 for information exchange and discussion on different
                 aspects on how to export services successfully. The
                 workshop is aimed at enhancing the understanding of
                 participant of the growing economic importance of cross-
                 border services transactions, providing insight into the
                 experience of private sector service suppliers and
                 discussing the role of the General Agreement on Trade
                 in Services (GATS) for the liberalization of cross-border
                 in services.

           6.1.3 MATRADE requested relevant professional bodies to
                 disseminate the information to their members. Interested
                 members can contact NAPSEC Secretariat for detail
                 information on this mission.

                                         Action: All NAPSEC Members.

     6.2   Construction Marketing Mission to Libya and Algeria, 30th
           June – 7 July 2006

           6.2.1 The meeting was briefed that the Mission will start in
                 Algeria from 30 June to 3 July 2006 before continuing
                 in Libya from 4 to 7 July 2006.




                                    31
      6.2.2 In preparing for the mission, a construction recce
            mission comprises of MATRADE officials based in
            Paris and Cairo was held at the end of May 2006 to
            gather relevant information and to view potential
            projects.

      6.2.3 The mission will be jointly led by MATRADE and CIDB.
            Delegates also includes official from PSDC and 19
            representatives from 16 Malaysian construction and
            construction related companies.

      6.2.4 The objectives of the mission is to promote the export of
            Malaysian construction and professional services, to
            familiarize the Malaysian firms with the business
            environment and to seek business opportunities / joint
            venture / partnership in the construction sector of
            Algeria and Libya.

                                                    For information

6.3   Arab Oil and Gas Exhibition, UAE 9 – 11 September 2006

      6.3.1 The meeting was informed that the Oil and Gas Show
            Exhibition provides the opportunity for the sector
            players to interact and discuss issues related to the
            exploration,     extraction,     processing,      storage,
            transportation and security in the oil and gas industry.

      6.3.2 The objectives to participate at the exhibition is to
            introduce and promote Malaysian companies In the oil
            and gas industry in UAE and other Middle Eastern
            countries, establish company presence and to assess
            competition from exporters and companies around the
            world.

      6.3.3 OGS2006 is expected to attract more than the 365
            international exhibitors from 35 countries that had
            participated in OGS 2005.

      6.3.4 OGS 2006 offers the Malaysian exhibitors the prospect
            to greater opportunities to explore and penetrate the
            offshore markets of the Middle East region and to
            showcase a comprehensive display of the latest

                               32
            technologies to over 7,000 specaliased visitors and
            buyers involved in the production and distribution of oil
            and gas at the local Middle East and international level.

                                                    For Information


6.4   Healthcare Marketing Mission to Oman & Lebanon,
      September 2006

      6.4.1 The meeting was briefed that mission’s objectives are
            to:
                  Network with related parties such as hospital
                   authorities, medical insurance companies,
                   business and expatriate communities in Oman
                   and Lebanon.
                  To visit both private and public hospital for
                   collaboration opportunities and understand the
                   state of healthcare facilities.
                  To explore the possibilities of Malaysia setting
                   up operations in both countries and accessing
                   their investment climate.
                  To disseminate information on Malaysian
                   healthcare facilities and services offered.

      6.4.2 The meeting was also informed that Oman has the
            most efficient health system in the region. The
            emergence of the private sector and fast growing
            population had contributed Oman’s annual growth of
            10 per cent over the past few years. The Omani
            government also plans to share the health cost to the
            private sector due to the increase expenditure in their
            healthcare modernisation.

      6.4.3 Lebanon is expected to enjoy annual growth of 6 to 7
            per cent over the next three year and reach about
            USD$500 million by 2007. Pharmaceuticals accounted
            for high share of Oman’s healthcare expenditure.
            Lebanese healthcare markets are mostly comprises on
            import which accounts to over 95 per cent of its
            healthcare spending.

                                                    For Information

                              33
7.    OTHER MATTERS

     7.1   Export Excellence Award (Services) 2006.

           7.1.1 MATRADE announced to the meeting about this Export
                 Excellence Award (Services) for 2006. Members were
                 requested to disseminate this award to their respective
                 members.
                                                       For Information

     7.2   Forum on International Trade in Professional Services in
           APEC Economies.

           7.2.1 The meeting was informed that MATRADE with
                 collaboration with Asia Pacific Economic Cooperation
                 will be conducting a forum on International Trade in
                 Professional Services in Asia Pacific Economic
                 Cooperation Economies. The theme of this forum will
                 be “Going Global with Professional Services – The
                 APEC Experience” which will be held from 14 – 17
                 August 2007 at PWTC. This event will consist of forum
                 and business meeting. Speakers from various services
                 sector will give a talk during this forum.
                                                            For Information

     7.3   PIKOM Software and Services Showcase 2006 (PS3)

           7.3.1 PIKOM Software & Services Showcase 2006 or PS3
                 2006 is a two-day conference summit (13 – 14 July)
                 and three-day exhibition of software and services (13 –
                 15 July). The two-day conference is an interactive
                 session allowing software producers and participants
                 exchange views. The three-day exhibition comprises
                 Malaysians software and services solutions providers
                 and selected multinational software enterprises. The
                 exhibition area is organized according to software
                 solution categories, services providers and international
                 pavilions.
                                                         For Information




                                    34
     7.4   National Professional Services Conference 2006

           7.4.1 It was announced by PSDC that they will be
                 organising a National Professional Services
                 Conference 2006 from 28 – 29 August 2006 at The
                 Legend Kuala Lumpur. This conference will be
                 officiated by the Minister of Works.
                                                      For Information

8.    CONCLUSION


            8.1   The Chairman again reminded the NAPSEC members
                  to submit their feedback in regards to the Export
                  Services Fund and then thanked NAPSEC members
                  and the representatives for their attendance, views and
                  suggestions. The meeting was adjourned at 6.00 p.m.




                                    35

				
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