3GROSS 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 2010Notes: 2009 (actual data), 2010 (estimates), 2011 (forecasts), MOF forecast Malaysia’s GDP growth will be %.MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA
4TRADE PERFORMANCE OF MALAYSIA 2009 – 2011 Source: MOF Economic Report October 2010Notes: 2009 (actual data), 2010 (estimates), 2011 (forecasts), US$1 = RM3.52MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA
5MALAYSIA: INFLATION AND UNEMPLOYMENT RATE 2009 – 2011 (%) Source: EIU Country Report January 2011 and IMF World Economic Outlook October 2010Notes: 2009 (actual data), 2010 (EIU estimates), (EIU forecasts)MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA
6MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA MITI DIRECTIONS IN 2011MITI to continue capitalising opportunities in fast-growing markets and new markets.FTAs expected to significantly enhance trade growth in 2011Manufacturing 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
7MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA MITI DIRECTIONS IN 2011The 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
10TOP 5 TRADING PARTNERS China Japan USA Thailand Hong Kong RM 73.7 BillionRM 60.1 BillionRM 55.8 BillionThailandHong KongRM 31.2 BillionRM 29.7 Billion
11Summary of Malaysia’s Global Trade Jan - Nov 2010(RM billion)% Change (Jan - Nov 2010 / 2009)2009 (RM billion)Exports582.2616.8553.3Imports481.7222.8434.9Trade Balance100.55-5.4118.4Total Trade1,063.9819.4988.2
15Malaysia’s International Ranking 1stfor Investor Protection- Forbes Report 20093rdAttractive Location for Outsourcing Destinations- A.T. Kearney Global Services Location Index 200910thMost Competitive Economy in 2010- Institute Management of Development
16IMD World Competitiveness Yearbook Ranking 2010(n=58)2009(n=57)2008(n=55)OVERALL RANKINGINDEX1087.2281877.1621973.199Economic PerformanceGovernment EfficiencyBusiness EfficiencyInfrastructure8942591913268191425
17World Bank Doing Business Ranking 2011(n=183)2010(n=183)2009(n=178)OVERALL RANKING212321Starting a businessDealing with construction permitsEmploying workersRegistering propertyGetting creditProtecting investorsPaying taxesTrading across bordersEnforcing contractsClosing a business113108N/A601423375955881096186142435595776105548114213160
18Forbes 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 LumpurProposed theme: AT THE CROSSROADSTarget of 400 delegates to attend FGCC 2011.
19INITIATIVES TO REINVIGORATE AND TRANSFORM THE ECONOMIC LANDSCAPE PEMUDAHEstablished on 7 February 2007ECOversee Regulatory Reforms to facilitate businessPEMANDUInclusive Public - Private Sector CollaborationNEACReports directly to the Prime Minister
21Snapshots 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; andForeign 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 MalaysiaEstablished 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; andEstablishment of New Commercial Courts to expedite disposal of commercial cases.2. Facilitating Business
22Deregulation of Foreign Investments Committee (FIC) Guidelines Announced by YAB Prime Ministeron 30 June 2009The 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.
23MALAYSIA’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.
24e-Preferential Certificate of Origin (e-PCO) NSW ServicesWeb-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); andCertificate of Origin for Textiles.e-Declaree-Manifeste-Paymente-Permite-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); andFinancial 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.
26WHERE 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:
27WHERE ARE WE AND WHAT WE HAVE DONE? ICT;Telecommunication;Health;Education;Tourism; andLogistics.Sectors in which commitments have been made across the board:
28WHERE 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; andTo attain overall growth of 7.5 per cent during the Plan period.Targets in Industrial Plan for services ( ):
29NEW 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) :
30WHY?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; andTo compete globally.
32ASEANMalaysia’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.
33Services Liberalisation Creating opportunities for services sector.Reduction/elimination of barriers to all 4 modes of supply.Enhance movement of skilled workforce in ASEAN.
34Role 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
36ASEAN FTAsStrengthening 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
37MALAYSIA’S FTA INVOLVEMENT STATUS/TYPEREGIONALBILATERALCONCLUDEDRegional: 6Bilateral: 5Total: 11ASEAN Free Trade Area (AFTA)ASEAN-ChinaASEAN-Republic of KoreaASEAN-Japan ComprehensiveEconomic Partnership or AJCEP(Trade in Goods)ASEAN-India (Trade in Goods)ASEAN-Australia-New ZealandMalaysia-Japan EconomicPartnership Agreement(MJEPA)Malaysia-PakistanComprehensive Economic(MPCEPA)Malaysia-New Zealand FreeTrade Agreement (MNZFTA)Malaysia-Chile FreeTrade Agreement (MCFTA)Malaysia-IndiaCooperation Agreement(MICECA)UNDER NEGOTIATIONSRegional: 3Bilateral: 4Total: 7ASEAN-Japan (Investment andServices)ASEAN-India (Investment and Services)Trans-Pacific Strategic EconomicPartnership (TPP)Malaysia-AustraliaMalaysia-TurkeyMalaysia-EUUNDERINITIATIONRegional: 2Bilateral: 2Total: 3ASEAN+3 (Japan, China and Korea)ASEAN+6 (Japan, China, Korea,Australia, New Zealand and India)Malaysia-BangladeshGulf Cooperation Council(GCC)
38Significant 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.
40MITI’S as custodian of the STA THE STRATEGIC TRADE ACT 2010 Facilitating Trade in a Secure Trading EnvironmentMITI’S as custodian of the STAFocal point – Strategic Trade Secretariat in MITIWHY?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
41TIMELINE FOR IMPLEMENTATION 1 January 2011Operationalisation of the STAExport permits issued for Category 0 itemNuclear Materials, Facilities and Equipment by AELB10 June 2010Gazette of the Act1 July 2011STA provisions enforced for all strategic items31 December 2010Gazette of Regulations and Orders1 April 2011Enforcement of STA provisions for Category 0 itemExport permits for Military Items and Category items by relevant authority – MITI, AELB, Pharmaceutical Services Department & MCMC
42KNOW 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
44INDUSTRIAL POLICY DIRECTION IN 2011 Implementation of related EPPs under E&E and NKEA egdeveloping integrated circuit design firmsIncreasing the number of silicon producersCreating conducive investment environment through business facilitation and addressing companies’ issues and concerns2011Further liberalisation of manufacturing sector through:Commitments in various FTAs; andReview of import licensing, e.g. review on APs
45INDUSTRIAL POLICY DIRECTION IN 2011 (cont..) Promotion of high value-added, high technology and capital-intensive activitiesMonitor and facilitate implementation of mandatory standards2011Support establishment/formulation of standard to promote production of high quality, international standard compliance and competitive products for global market
46INVESTMENT FACILITATION National Committee on Investment (NCI)Established to evaluate and approve investment projects in real timeSpecial Task Force on InvestmentTo coordinate investment promotion activities and statistical information among regional corridorsCorporatisationTo transform MIDA as an effective investment promotion agency to compete and attract quality investments
47QUALITY INVESTMENT Quality Investment (FDI & DDI) High Value Added Strong Linkages with Domestic IndustriesR&D & DesignCapital IntensiveHigh Value AddedExport OrientedGNI ImpactSkills IntensiveHigh Income JobsKnowledge IntensiveHigh Technology
49ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENT undertake joint promotion activities with MITI and agenciesfacilitate delegation exchange visitsprovide assistance in identifying potential investorsorganise regular dialoguesorganise regular Joint Business Council Meetingtargeted networkingEngage influential business community and captain of industry to be part of BC’s activitiesParticipate and use platform such as the JTC to raise issues which impede trade and investment, as well as to propose collaborations
50ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENT Help co-chair Task Force/Working Committeesactive identification & dissemination of business & investment opportunitiesestablish of regional linkages for information & resource sharing purposesdisseminate information to counterparts in their home countryInformation sharing between BCs andMITI/other agenciesOther forms of collaborationOPEN FOR DISCUSSION……