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Strategic Plan Bank Muamalat

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									Seminar on Business Challenges
 and Opportunities in Malaysia
“Trade and Investment Opportunities in Malaysia”
                       By
          Mr. Mohd Iqbal Mohd Noor
    Economic Counsellor, Embassy of Malaysia

           Mr. Jai Shankar Suppayah
      Trade Counsellor, Embassy of Malaysia
              25 November 2010
      Richmond Hotel, Nonthaburi, Bangkok          1
   Outline:

1. Malaysia: Overall Economic Environment
   ●   Malaysia’s Competitiveness Ranking
   ●   Economic Performance
   ●   Response to Global Financial Crisis
   ●   Economic Bilateral: Malaysia-Thailand

2. Trade and Investment Opportunities in Malaysia:
   Measures undertaken by Government and Regional
   Commitment
   Trade Opportunity
   ●   Liberalisation under AFTA
   ●   AEC Realisation in 2015
   ●   Import Licensing Review
                                                 2
Outline: (Continue)


Investment Opportunity

●   Incentives by Government
●   Liberalisation Efforts by Government

Improving Business and Investment Environment

●   The Special Task Force to Facilitate
    Business (PEMUDAH)
●   Business Licensing Electronic Support System
    (BLESS)
●   The Performance Management and Delivery Unit
    (PEMANDU)
                                                   33
  Outline: (Continue)


3. Way Forward

   ●   Vision 2020
   ●   Malaysia Strategic under 10th Malaysia Plan
       (2011-2015)
   ●   New Economic Model
   ●   Place Malaysia as Competitive Trading Partner
       and Strategic Investment Location

4. Q & A



                                                       4
1.   Malaysia: Overall Economic Environment

     ●   Foreign Policy
     ●   Economic Relations
     ●   Open Economy
     ●   Top 10 Trading Partner
             ○ Singapore;
             ○ USA;
             ○ Japan;
             ○ China;
             ○ Thailand;
             ○ Republic of Korea;
             ○ Indonesia;
             ○ Hong Kong;
             ○ Taiwan; and
             ○ Germany                        5
1.   Malaysia: Overall Economic Environment

     ●   Top 10 Foreign Invertors

             ○   Australia;
             ○   USA;
             ○   Japan;
             ○   Germany;
             ○   Spain;
             ○   Singapore;
             ○   Netherlands;
             ○   British Virgin Islands;
             ○   Taiwan; and
             ○   Switzerland


                                              6
1.    Malaysia: Overall Economic Environment

Factors that Attract Investors into Malaysia

      ●   Supportive Government Policies
      ●   Educated Workforce
      ●   Developed Infrastructure
      ●   Vibrant Business Environment
      ●   Quality of Life



                                               7
  1.      Malaysia: Overall Economic Environment
Malaysia’s Competitiveness Ranking

   ● 18th Most Competitive Economy in the World – World
     Competitiveness Yearbook 2009, IMD
   ● Malaysia is the 21st largest exporting country and 28th largest
     importing country in the world in 2008
   ● 16th in the FDI Confident Index – A.T Kearney’s 2007
   ● 13th Rank Globally for Capital Access – Milken Institute, USA
     – Capital Access Index (CAI) 2007
   ● 5th Least Expensive in the World for Rent of Prime Office
     Space & 11th Cheapest for Prime Industrial Space – King
     Sturge, UK – Global Industrial and office Rent Survey 2007
   ● 20th Ease of Doing Business – World Bank Report 2008

   ● 14th Preferred Destination for FDI – UNCTAD 2007           8
1.      Malaysia: Overall Economic Environment

●    Malaysia’s Economic Performance
        ● Performance of global economy
        ● Improve in domestic economic environment
        ● 2009 GDP : -1.7%

●    Response to Global Financial and Economic Crisis
        ● 2 Stimulus Packages Totalling RM67 billion
          (USD18.2 billion)
        ● Opportunity to restructure the economy and
          to be more broad-based
●    GDP: 2010
       ● Sign of improvement
       ● Efforts by Government
       ● GDP to grow at 6% in 2010
                                                  9
 1.          Malaysia: Overall Economic Environment

Economic Bilateral between Malaysia and Thailand

        Malaysia-Thailand Trade Performance
                     Jan – July     2009        2008
                       2010
                     Values US    Values US   Values US
                      Billion      Billion     Billion

   Total Trade         12.6         15.8        18.3


   Exports              6.6          8.4         9.5


   Imports              5.9          7.4         8.8


   Trade Balance        0.7          1           0.7

  Source: Matrade
                                                          10
  1.        Malaysia: Overall Economic Environment

● Thailand is Malaysia’s Top 5 trading partner

Major export to Thailand

   ●   electrical and electronic products
   ●   crude petroleum
   ●   chemical and chemical products
   ●   other manufacturers
   ●   machinery, appliances and parts

Major import from Thailand

   ●   electrical and electronic products
   ●   transport equipment
   ●   chemical and chemical products
   ●   crude rubber
   ●   machinery, appliances and parts
                                                 11
   1.         Malaysia: Overall Economic Environment

   Malaysian Investment in Thailand

              ● Malaysia is top 5 investors in Thailand

   Value of Investment
              ● 2009: US$183 million
              ● 2008: US$ 0.79 billion
              ● 2007: US$ 0.17 billion

   Major Areas of Investment
              ●   Services
              ●   Electrical and Electronics
              ●   Chemical and Paper
              ●   Metal Products and Machinery
              ●   Agricultural products
                                                          12
Source: BOI
1.       Malaysia: Overall Economic Environment

Thai Investment in Malaysia

         ● 1981-Sept 2009 : US$ 316.72 million
         ● 125 projects (only 69 implemented)
         ● Area of investment include:
                ● Aquaculture feed
                ● Heavy and light vacuum gas oil
                ● Fertilizer
                ● Auto Parts
Source: Central Bank of Malaysia

                   ● Need to promote more investment from
                     Thailand into Malaysia
                   ● Liberalisation under AFTA
                   ● BOT Relaxation on outflow of fund from
                     Thailand
                                                              13
2.      Trade and Investment Opportunities in
        Malaysia: Measures undertaken by Government
        and Regional Commitment.
Trade Opportunity
        ● Tariff Liberalisation under AFTA (More than 2000 tariff lines)
Product with Zero Duty

       ●   fish product            ●   chemical product
       ●   vegetable products      ●   plastic rubber
       ●   palm oil                ●   leather
       ●   prepared food stuffed   ●   wood product
       ●   mineral products        ●   foot wear

       ●   ceramic products        ●   machinery
       ●   paper products          ●   vehicles
       ●   precious stones         ●   manufactire items
       ●   based metal (iron and   ●   work of art
           steel)

        ● Asean Economic Community Realisation in 2015
                                                                     14
 2.   Trade and Investment Opportunities in
      Malaysia: Measures undertaken by Government
      and Regional Commitment.

Trade Opportunity

  ● Import Licensing Review
      ● Abolishment of approve permit (AP)
         system
       ● Gradually Liberalised other sensitive
         sector
       ● Committment under WTO and Asean


                                              15
          New Key Economic Areas (NKEA)




1. Greater Kuala Lumpur 9. Communication
2. Oil, Gas & Energy    10. Education
                        11. Agriculture
3. Financial Services
                        12. Health Services
4. Wholesale & Retail
5. Palm Oil
6. Tourism
7. Electrical &
   Electronics
8. Business Services


                                              16
17
18
2.     Trade and Investment Opportunities in
       Malaysia: Measures undertaken by Government
       and Regional Commitment.

Investment Opportunity

       Incentives for Manufacturing Companies

           ○   Pioneer Status
           ○   Investment Tax Allowance
           ○   Reinvestment allowance
           ○   Import Duty and Sales Tax Exemption
           ○   Incentives for SME
           ○   Incentives for Agriculture Sector
           ○   Incentives for R&D
           ○   Incentives for Regional Office/Headquarters



                                                             19
      INVESTMENT
     OPPORTUNITIES
Subject to domestic legislation, AFAS
threshold commitments have allowed
for greater movement of investment
(most notably under commercial
presence) within ASEAN compared to
other multilateral commitments so
far.
Furthermore, potential investors have
a variety of sectors to invest and
create valuable economic linkages in.
                  INVESTMENT
                 OPPORTUNITIES
 Current No. of Sectoral    B    C    I    L    Mal   M    P    S    T    V
  Commitments Made
Professional Business       6    8    7    10   10    6    14   7    7    9
Services
Healthcare                  5    3    5    3    5     9    3    8    5    5
Computer Related Services   6    6    3    5    7     5    6    4    5    6
Research & Development      3    -    1    3    5     -    3    4    7    1
Real Estate                 -    -    -    -     -    -    2    1    2    -
Rental & Leasing (w/o       5    2    1    4    5     1    6    4    7    1
operator)
Other Business              14   10   12   8    18    6    13   22   17   7
Postal and Courier          -    1    -    1     -    1    2    1    -    1
Telecommunication           16   17   25   12   21    15   21   23   19   20
Audiovisual                 -    -    -    4    2     5    3    1    5    4
Construction & Related      8    8    8    8    8     8    8    8    8    8
Engineering
Distribution                -    10   3    3    9     2    1    7    4    14
                    INVESTMENT
                   OPPORTUNITIES
  Current No. of Sectoral    B   C   I    L   Mal   M   P    S   T   V
   Commitments Made
Education                    5   4   4    8    7    5   -    1   9   4
Environmental                -   6   4    6    4    3   2    3   9   4
Social Services              -   -   4    -    1    1   -    7   -   1
Tourism                      3   5   12   5    8    6   4    9   9   5
Recreational, Cultural and   3   2   3    -    5    4   3    3   7   2
Sporting
Transport-Maritime           3   2   5    6    6    4   10   6   9   6
Transport-Inland Waterways   -   -   5    4    -    -   -    -   -   2
Transport-Space Transport    1   -   -    -    -    -   -    -   -   -
Transport-Rail Transport     4   -   5    -    -    -   4    -   3   2
Transport-Road Transport     -   7   3    1    1    -   5    7   5   2
Transport-Pipeline           -   2   -    -    -    -   2    -   -   -
Auxiliary Services to All    3   1   3    3    4    3   4    2   4   6
Modes of Transport
Other Services NIE           -   -   2    1    1    -   8    -   1   -
2.    Trade and Investment Opportunities in
      Malaysia: Measures undertaken by Government
      and Regional Commitment.

Investment Opportunity

      Other Liberalisation Efforts by Government

      ○ Services Sector
      ○ Foreign Investment Committee (FIC) –
        deregulation of investment guidelines
      ○ Domestic Trade Sector Liberalisation (no
        more equity requirement in franchise, hyper
        stores and direct selling business)


                                                   23
2.   Trade and Investment Opportunities in
     Malaysia: Measures undertaken by Government
     and Regional Commitment.

● To further promote trade and investment,
  Government has initiated improvements in the
  business and investment environment through
  various mechanisms including:

     ○ The Special Task Force to Facilitate
       Business (PEMUDAH)
     ○ Business Licensing Electronic Support
       System (BLESS)
     ○ The Performance Management and
       Delivery Unit (PEMANDU)/GTP/NKRAs
                                             24
           Improvements to Public Delivery System

Through PEMUDAH:

 Areas                          Improvements

 Starting a Business            From 11 to 3 days



    •   Facilitating Business:
        MyCoID is the standard identification number of a
        business entity for use in its interaction with
        Government agencies, from 1 January 2010.



                                                            25
       Improvements to Public Delivery System



• Trade Facilitation: Establishing the National Single
  Window

• Setting up New Commercial Courts (NCC) in Kompleks
  Mahkamah Jalan Duta - commercial cases, except for
  those related to Intellectual Property and Muamalat,
  disposed in 270 days from an average disposal time of
  585 days, previously.




                                                         26
3.     Way Forward


● To Continue to monitor global economic development
      ○ To response appropriately
      ○ Ensure sustainability economic resilience

● Vision 2020
       ○ To be a developed nation by 2020
       ○ Key thrust towards achieving the goals include:
              ● Enhancing competitiveness
              ● Diversify export market
              ● New sources of growth
              ● Intensify research
              ● HRD
              ● Sustainable development




                                                           27
28
     Government Transformation
         Programme (GTP)
Objectives:
 to transform the Government delivery
  system into rakyat (people) -centred and
  outcome-oriented; and
 to move Malaysia forward to become an
  advanced, united and just society with
  higher living standards for all.

• GTP is in line with the national mission of
  achieving Vision 2020.

                                            29
Government Transformation
    Programme (GTP)




                            30
Economic Transformation Programme

      The ETP with 131 Entry Point
   Projects (EPP) valued at USD 138
   Billion has identified 60 business
    opportunities. The projects will
          provide 3.3 million job
     opportunities that will generate
      Gross National Income (GNI)
    totaling USD523 Billion by 2020



                                        31
Goals of the New Economic
           Model




                            32
What are the new approaches to the
  NEM economic development
• Productivity driven
• Private sector led
• Localised autonomy in decision making
• Cluster – corridor – based economic activities
• Favour Technologically capable industries and
  firms
• Emerging new markets and focus on Asian and
  Middle East
• Attracting skilled professionals
                                              33
3.     Way Forward


● Malaysia strategic direction under 10th Malaysia Plan (2011 –
  2015)
      ○ Private sector role
      ○ Achieving high income economy
      ○ Developed nation status by 2020




                                                            34
      Malaysia – Moving Forward

                        Private sector leads,
                        Government Facilitates,

                        Review of subsidies,

                        Innovation, creativity,
                        value-added activities




Government will WALK THE TALK.

                                             35
3.   Way Forward


Malaysia as a competitive trading partner and
strategic investment location

     ●   To look for new source of growth
     ●   Significant role of private sector
     ●   Growth of domestic demand
     ●   High quality of investment




                                              36
3.     Way Forward


● Summary:

       ○ Gradually recovering from the global economic crisis
       ○ Sign of Improvements
       ○ Malaysia’s economy fundamental sound with good
          infrastructure
       ○ Responsive policies
       ○ Open and liberal trade and investment policies
       ○ Improving trade and investment climate
       ○ Committed upholding the rules-based and open
          multilateral trading system

● Malaysia will continue to promote market-based economy with
business-friendly and competitive environment.

● More opportunities for trade and investment
                                                           37
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