MINUTES OF THE 16TH MEETING OF THE
NATIONAL PROFESSIONAL SERVICES EXPORT COUNCIL
Date : 27 June 2006 (Tuesday)
Time : 2.30 p.m. – 6.00 p.m.
Venue : Bilik Mesyuarat Perdana
MATRADE, 7th Floor,
Wisma Sime Darby,
Chairman : Y.Bhg. Datuk Merlyn Kasimir
Chief Executive Officer, MATRADE
Y. Bhg. Dato’ Esa bin Mohamed
Board of Architects Malaysia
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
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)
Dr. Nor Zari bin Hamat
Economic Planning Unit (EPU)
Dr. Wong Say Ho
Persatuan Industri Komputer dan Multimedia
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)
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)
Mr. Noharuddin Nordin
Deputy Chief Executive, MATRADE
Mr. Zakaria Kamarudin
Services and Product Promotion Division, MATRADE
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
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
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
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
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
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
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
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.
4. EXPORT PROMOTION STRATEGY & ISSUES.
4.1 “Professional Services Export (PSE) Fund” by
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:
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
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
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)
4.1.3 The Fund, under the purview and stewardship of
MITI, and managed by MATRADE would be
underpinned by professionalism, transparency and
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.
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
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
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
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.
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
4.2.5 On Malaysia side, Bar Council members are allowed
to export their services and not prohibited from
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
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
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.
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.
4.3 “Updates on MIA’s Strategic Initiatives for the
Globalisation Era” by Malaysian Institute of Accountants
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
Direct Effects of Entry of Foreign Service
Export of Services.
Education and Training, and Research and
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
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
Periodic meetings or gathering for exchange of
ideas and also talks from services export
experts from MATRADE, NAPSEC, MITI and
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
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
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.
5. TRADE REPORTS / MARKET ALERTS
5.1 ICT Marketing Mission to Oman & Qatar, 27 – 31 May
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
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
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
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
2006. The breakdown of the representations were as
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
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
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
5.2 Iraq Project & Construction Contracts.
5.2.1 The meeting was informed that the Iraqi projects and
construction contracts opportunities can be divided
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
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
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
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
An extensive listing of tenders is
accessible via an internal page located
on the Baghdad Business Center’s
5.2.2 Iraq reconstruction prime contractors and
subcontractors are responsible for choosing their
own business partners, including subcontractors and
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
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:
tml and http://www.export.gov/iraq/market_ops/
5.2.5 Example of areas which contract are already
awarded are as follows:
Agriculture Reconstruction and Development
for Iraq (ARDI)
Economic Recovery, Reform and Sustained
Growth in Iraq
Primary and Secondary Education
Theater Logistical Support
Back to School Campaign
Health, Water and Sanitation Services
Health System Strengthening
The Higher Education and Development
Iraq Community Action Program (awarded to 5
Iraq Health Services Strengthening Project
5.3 Roads & Transport Authority of Dubai.
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
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
5.3.3 The Roads and Transport Authority's plan consists
of the following elements:
Reviewing strategic plans for traffic and
New mode of water transport
Improvement of public transport system in
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
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
RTA is reviewing data and inputs by various
departments regarding the traffic situation in
the city. RTA is preparing a traffic and
transportation model for the next 15 years until
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
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
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-
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
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
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
5.4 The Eastern European Region’s IT Market – A Dynamic
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
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
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
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
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.
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.
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
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
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,
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
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
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
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
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
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
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
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
A number of desalination plants
Several dams and sewage treatment plants
Renovation of the railway network and
dredging of ports.
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
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
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.
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
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
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.
5.6.7 Among the initiatives are:
The setting up venture capital groups or
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
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
lagged behind competitors, with imitating and
5.6.12 The telecommunication sector in China provides an
excellent avenue for Malaysian software developers
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
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
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.
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:
Saadiyat Park and
5.7.6 Tourism Development and Investment Company
Owned by Abu Dhabi Tourism Authority
Saadiyat Island covers an area of 27 sq. km.
It is 500 metres offshore north-east of Abu
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
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
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
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
Action: Wisma Putra and PSDC
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
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.
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
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.
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
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
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.
6.4 Healthcare Marketing Mission to Oman & Lebanon,
6.4.1 The meeting was briefed that mission’s objectives are
Network with related parties such as hospital
authorities, medical insurance companies,
business and expatriate communities in Oman
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
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
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
7.2 Forum on International Trade in Professional Services in
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.
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
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.
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.