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DIALOGUE WITH BUSINESS COUNCILS 21 JANUARY 2011

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Presentation on theme: "DIALOGUE WITH BUSINESS COUNCILS 21 JANUARY 2011"— Presentation transcript:

1 DIALOGUE WITH BUSINESS COUNCILS 21 JANUARY 2011
REINVIGORATING AND TRANSFORMING THE BUSINESS ENVIRONMENT

2 PART 1: MALAYSIA - OVERVIEW

3 GROSS DOMESTIC PRODUCT GROWTH OF MALAYSIA, 2009 – 2011 (%)
Source: EIU Country Report January 2010, World Bank Malaysia Economic Monitor November 2010, IMF World Economic Outlook October 2010 and MOF Economic Report October 2010 Notes: 2009 (actual data), 2010 (estimates), 2011 (forecasts), MOF forecast Malaysia’s GDP growth will be %. MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

4 TRADE PERFORMANCE OF MALAYSIA 2009 – 2011
Source: MOF Economic Report October 2010 Notes: 2009 (actual data), 2010 (estimates), 2011 (forecasts), US$1 = RM3.52 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

5 MALAYSIA: INFLATION AND UNEMPLOYMENT RATE 2009 – 2011 (%)
Source: EIU Country Report January 2011 and IMF World Economic Outlook October 2010 Notes: 2009 (actual data), 2010 (EIU estimates), (EIU forecasts) MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

6 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA
MITI DIRECTIONS IN 2011 MITI to continue capitalising opportunities in fast-growing markets and new markets. FTAs expected to significantly enhance trade growth in 2011 Manufacturing sector - leading export sector with E&E products (the largest contributor to total exports by 40%). Other major exports include crude and refined petroleum, LNG, palm oil, chemicals and chemical products as well as machinery appliances and parts. MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

7 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA
MITI DIRECTIONS IN 2011 The services sector to leverage on healthcare, education, outsourcing services in manufacturing and ICT, construction, engineering services, and services for O&G. Increasing the contribution of DDI with growth in FDI. Given the uphill challenges in the economic recovery globally, raising FDIs a big challenge, thus the need to raise DDI to stimulate growth. Improving business environment, investment policies and other incentives in the country. The 131 entry point projects under the ETP require both local and foreign investments. The Cabinet on 15 October 2010 approved the establishment of ETP Investment Committee to oversee investment-related issues under ETP. MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

8 PART 2: TRADE AND INVESTMENT PERFORMANCE

9 Malaysia’s Trade Performance (2005 – Nov 2010)

10 TOP 5 TRADING PARTNERS China Japan USA Thailand Hong Kong
RM 73.7 Billion RM 60.1 Billion RM 55.8 Billion Thailand Hong Kong RM 31.2 Billion RM 29.7 Billion

11 Summary of Malaysia’s Global Trade
Jan - Nov 2010 (RM billion) % Change (Jan - Nov 2010 / 2009) 2009 (RM billion) Exports 582.26 16.8 553.3 Imports 481.72 22.8 434.9 Trade Balance 100.55 -5.4 118.4 Total Trade 1,063.98 19.4 988.2

12 MAJOR FOREIGN INVESTORS
USA Japan Hong Kong RM 11.7 Billion RM 4.0 Billion RM 2.8 Billion Singapore Germany RM 2.1 Billion RM 1.9 Billion

13 APPROVALS IN MANUFACTURING
AND SERVICES SECTORS 2010 RM74.9 BILLION 3,317 PROJECTS 141,880 JOBS

14 PART 3: MALAYSIA’S INTERNATIONAL RANKING

15 Malaysia’s International Ranking
1st for Investor Protection - Forbes Report 2009 3rd Attractive Location for Outsourcing Destinations - A.T. Kearney Global Services Location Index 2009 10th Most Competitive Economy in 2010 - Institute Management of Development

16 IMD World Competitiveness Yearbook Ranking
2010 (n=58) 2009 (n=57) 2008 (n=55) OVERALL RANKING INDEX 10 87.228 18 77.162 19 73.199 Economic Performance Government Efficiency Business Efficiency Infrastructure 8 9 4 25 9 19 13 26 8 19 14 25

17 World Bank Doing Business Ranking
2011 (n=183) 2010 (n=183) 2009 (n=178) OVERALL RANKING 21 23 21 Starting a business Dealing with construction permits Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business 113 108 N/A 60 1 4 23 37 59 55 88 109 61 86 1 4 24 35 59 57 76 105 54 81 1 4 21 31 60

18 Forbes Global CEO Conference (FGCC)
Annual conference organised by Forbes Asia. Main aim: to enhance Malaysia’s position as an attractive business and investment destination through networking amongst the CEOs and business personalities. FGCC 2009 (9th series of the Conference): Held on September 2009 in Kuala Lumpur with the theme “GAME CHANGE” Attended by 479 delegates (include 69 speakers, prominent businessmen, politicians) FGCC 2011 (11th series of the Conference): To be held on September 2011 in Kuala Lumpur Proposed theme: AT THE CROSSROADS Target of 400 delegates to attend FGCC 2011.

19 INITIATIVES TO REINVIGORATE AND TRANSFORM THE ECONOMIC LANDSCAPE
PEMUDAH Established on 7 February 2007 EC Oversee Regulatory Reforms to facilitate business PEMANDU Inclusive Public - Private Sector Collaboration NEAC Reports directly to the Prime Minister

20 PART 4: TRADE AND ECONOMIC FACILITATION

21 Snapshots of Initiatives in 2010
Removed age limit for expatriates especially for those qualified and has valuable working experience; Automatic Approval for expatriates with salaries of more than RM8,000; Expatriates are allowed to apply for Permanent Residence (PR) status after living in Malaysia for 5 years; and Foreign spouse of a Malaysian citizen can work or be involved in any form of business in Malaysia under Long Term Social Visit Pass (LTSP). Point System for Consideration of Entry Permit (Permanent Resident). 1. Facilitating Foreign Talent Into Malaysia Established a One-Stop-Centre (OSC) at Local Authorities in Peninsular Malaysia to expedite approval of construction permits; 3 days to start a business from 11 days previously; 2 days to register a property from 41 days previously; and Establishment of New Commercial Courts to expedite disposal of commercial cases. 2. Facilitating Business

22 Deregulation of Foreign Investments Committee (FIC) Guidelines
Announced by YAB Prime Minister on 30 June 2009 The deregulation of FIC guidelines include: The repeal of guidelines covering the acquisition of equity stakes, mergers and takeovers. No equity conditions will be imposed on any share transactions. Investment made under relevant sector regulators, it will still be applicable. Listed companies will no longer be subject to equity conditions post-IPO. Upon IPO, the equity condition will be subsumed as part of the public spread requirement.

23 MALAYSIA’S NATIONAL SINGLE WINDOW (NSW)
NSW - one-stop trade facilitation portal that provides secure, safe and efficient electronic exchange of trade-related documents through a single point of entry to expedite smooth flow of information of goods for import, export or transit. 5 NSW services - operationalised since 19 November 2009 and available through MyTradelink online portal (http://www.mytradelink.gov.my). NSW implementation is under the purview of Ministry of finance (MOF) Malaysia.

24 e-Preferential Certificate of Origin (e-PCO)
NSW Services Web-based application for online submission of Customs declaration. Available at all Malaysian ports and entry points. Web-based application for online approval of electronic Preferential Certificate of Origin by MITI. MITI operates e-PCO for the following schemes: ASEAN Industrial Cooperation (AICO); Common Effective Preferential Tariff (CEPT); Free Trade Agreement (FTA); ASEAN-Korea Free Trade Area (AKFTA); ASEAN-China Free Trade Area (ACFTA); Malaysia-Japan Economic Partnership Agreement (MJEPA); Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA); Generalised System of Preferences (GSP); and Certificate of Origin for Textiles. e-Declare e-Manifest e-Payment e-Permit e-Preferential Certificate of Origin (e-PCO) Web-based application that allows Shipping Agents to submit vessel information and cargo report to Customs. Online duty payment service to Customs. 3 Modes of e-Payment: Electronic Funds Transfer (EFT) – supported by 8 banks. Available weekdays, 8:45am – 8:00pm; DutyNet – provided by CIMB Bank Berhad (available 24/7); and Financial Services Payment Gateway (FSPG) – web-based system connected to 3 banks (available 24/7). Web-based application for online application and approval of import / export permits. 19 Permit Issuing Agencies (PIAs) including MITI are implementing e-Permit while 11 PIAs (8 PIAs from Sabah & Sarawak) will be connected to e-Permit.

25 PART 5: LIBERALISATION OF SERVICES

26 WHERE ARE WE AND WHAT WE HAVE DONE?
Autonomous liberalisation (27 sub-sectors): announced by PM on 22 April 2009. ASEAN: through progressive liberalisation under the ASEAN Framework Agreement on Services (AFAS). (70 per cent equity liberalisation to be undertaken by 2015 and logistics by 2013)‏. WTO: through progressive liberalisation. Bilateral and regional FTAs: through binding of GATS and GATS + commitments. Liberalisation of services sector is currently being undertaken in:

27 WHERE ARE WE AND WHAT WE HAVE DONE?
ICT; Telecommunication; Health; Education; Tourism; and Logistics. Sectors in which commitments have been made across the board:

28 WHERE ARE WE AND WHAT WE HAVE DONE?
Increase contribution of services to GDP to 59.7 per cent in 2020 (non-government); Achieve total investment of RM687.7 billion during the Plan period. Annually, RM45.8 billion; and To attain overall growth of 7.5 per cent during the Plan period. Targets in Industrial Plan for services ( ):

29 NEW ECONOMIC MODEL (NEM) AND TENTH MALAYSIA PLAN (RMK-10) :
WHERE DO WE GO? 8 of 12 NKEAs are related to services sector i.e. education, health, business services, wholesale and retail, oil & gas, tourism, financial and telecommunication. Under 10th Malaysia Plan (RMK10), the services sector is targeted to contribute 61 per cent to gross domestic product (GDP) by 2015 and 65 per cent by 2020. Continued liberalisation to attract more investments, professionals and technology as well as strengthen competitiveness. focus given to services sector as it has potential to continue expanding and contribute significantly to economic growth. NEW ECONOMIC MODEL (NEM) AND TENTH MALAYSIA PLAN (RMK-10) :

30 WHY? Structural changes needed to sustain development and economic growth; Private led initiatives to attract foreign investors; To increase productivity and to attract and retain talent, companies and capital; Developing small and medium enterprises (SMEs) as an engine of growth and innovation; and To compete globally.

31 PART 6: ASEAN

32 ASEAN Malaysia’s engagement with ASEAN and its Dialogue Partners and the realisation of ASEAN Economic Community remains high priority. Expansion of intra-ASEAN trade & investment. Elimination of tariffs and NTBs. Harmonisation of product standards and regulatory framework. Creating a network of efficient industries and SMEs.

33 Services Liberalisation
Creating opportunities for services sector. Reduction/elimination of barriers to all 4 modes of supply. Enhance movement of skilled workforce in ASEAN.

34 Role of ASEAN Private Sector
Strengthening the role of existing ASEAN’s industry associations / clubs and business councils (Example; ABAC, EABC, ACCI etc.) inputs on current problems and issues related to development of business and investment in ASEAN. To encourage co-operation between the private sector/companies. To promote joint ventures in specific sectors of common interests. To utilise the expertise of the councils’ members to identify and develop opportunities for SMEs

35 PART 7: MALAYSIA’S FTAs

36 ASEAN FTAs Strengthening linkages through ASEAN Plus FTAs and key trading partners: ASEAN (570 million population) ASEAN+China (1.9 billion population) ASEAN+Korea (618.2 million population) ASEAN+Japan (697.8 million population) ASEAN+India (1.7 billion population) ASEAN (595.5 million population) +Australia-NZ

37 MALAYSIA’S FTA INVOLVEMENT
STATUS/TYPE REGIONAL BILATERAL CONCLUDED Regional: 6 Bilateral: 5 Total: 11 ASEAN Free Trade Area (AFTA) ASEAN-China ASEAN-Republic of Korea ASEAN-Japan Comprehensive Economic Partnership or AJCEP (Trade in Goods) ASEAN-India (Trade in Goods) ASEAN-Australia-New Zealand Malaysia-Japan Economic Partnership Agreement (MJEPA) Malaysia-Pakistan Comprehensive Economic (MPCEPA) Malaysia-New Zealand Free Trade Agreement (MNZFTA) Malaysia-Chile Free Trade Agreement (MCFTA) Malaysia-India Cooperation Agreement (MICECA) UNDER NEGOTIATIONS Regional: 3 Bilateral: 4 Total: 7 ASEAN-Japan (Investment and Services) ASEAN-India (Investment and Services) Trans-Pacific Strategic Economic Partnership (TPP) Malaysia-Australia Malaysia-Turkey Malaysia-EU UNDER INITIATION Regional: 2 Bilateral: 2 Total: 3 ASEAN+3 (Japan, China and Korea) ASEAN+6 (Japan, China, Korea, Australia, New Zealand and India) Malaysia-Bangladesh Gulf Cooperation Council (GCC)

38 Significant Achievements
Malaysia started recording trade surplus with Japan since 2009, reversing the trade imbalance trend. A result of the implementation of MJEPA and AJCEP. In 2010, Malaysia recorded a trade surplus with China for the first time since the implementation of the ACFTA. Significant increase in trade with non-traditional trading partners i.e. trade with Pakistan has been averaging 30% increase since implementation of MPCEPA. Investments from Japan increased from RM5.6 billion in 2008 to RM7.0 billion in 2009. Malaysia benefiting from cooperation projects e.g MAJAICO.

39 PART 8: FACILITATING EXPORT CONTROL

40 MITI’S as custodian of the STA
THE STRATEGIC TRADE ACT 2010 Facilitating Trade in a Secure Trading Environment MITI’S as custodian of the STA Focal point – Strategic Trade Secretariat in MITI WHY? To fulfill requirements of United Nations Security Council Resolution 1540 (UNSCR 1540) Curb the proliferation of weapons of mass destruction (WMD) through control over export, transit, transshipment, brokering and other activities of: strategic items (goods and intangible technology) unlisted items

41 TIMELINE FOR IMPLEMENTATION
1 January 2011 Operationalisation of the STA Export permits issued for Category 0 item Nuclear Materials, Facilities and Equipment by AELB 10 June 2010 Gazette of the Act 1 July 2011 STA provisions enforced for all strategic items 31 December 2010 Gazette of Regulations and Orders 1 April 2011 Enforcement of STA provisions for Category 0 item Export permits for Military Items and Category items by relevant authority – MITI, AELB, Pharmaceutical Services Department & MCMC

42 KNOW YOUR PRODUCTS AND ENGAGE WITH US NOW
Strategic Items include: military items (Category ML) dual-use items: nuclear materials, facilities and equipment (Category 0)\ special materials and related equipment (Category 1) materials processing (Category 2) electronics (Category 3) computers (Category 4) telecommunications and information security (Category 5) sensors and lasers (Category 6) navigation and avionics (Category 7) marine (Category 8) aerospace and propulsion (Category 9) Strategic Items List and procedures to register and apply for export permits are available on MITI’s website

43 PART 9: INVESTMENT FACILITATION

44 INDUSTRIAL POLICY DIRECTION IN 2011
Implementation of related EPPs under E&E and NKEA eg developing integrated circuit design firms Increasing the number of silicon producers Creating conducive investment environment through business facilitation and addressing companies’ issues and concerns 2011 Further liberalisation of manufacturing sector through: Commitments in various FTAs; and Review of import licensing, e.g. review on APs

45 INDUSTRIAL POLICY DIRECTION IN 2011 (cont..)
Promotion of high value-added, high technology and capital-intensive activities Monitor and facilitate implementation of mandatory standards 2011 Support establishment/formulation of standard to promote production of high quality, international standard compliance and competitive products for global market

46 INVESTMENT FACILITATION
National Committee on Investment (NCI) Established to evaluate and approve investment projects in real time Special Task Force on Investment To coordinate investment promotion activities and statistical information among regional corridors Corporatisation To transform MIDA as an effective investment promotion agency to compete and attract quality investments

47 QUALITY INVESTMENT Quality Investment (FDI & DDI) High Value Added
Strong Linkages with Domestic Industries R&D & Design Capital Intensive High Value Added Export Oriented GNI Impact Skills Intensive High Income Jobs Knowledge Intensive High Technology

48 PART 10: ROLE OF BUSINESS COUNCILS

49 ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENT
undertake joint promotion activities with MITI and agencies facilitate delegation exchange visits provide assistance in identifying potential investors organise regular dialogues organise regular Joint Business Council Meeting targeted networking Engage influential business community and captain of industry to be part of BC’s activities Participate and use platform such as the JTC to raise issues which impede trade and investment, as well as to propose collaborations

50 ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENT
Help co-chair Task Force/Working Committees active identification & dissemination of business & investment opportunities establish of regional linkages for information & resource sharing purposes disseminate information to counterparts in their home country Information sharing between BCs and MITI/other agencies Other forms of collaboration OPEN FOR DISCUSSION……

51 THANK YOU


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