MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA Ministry of International Trade and Industry (MITI) Malaysia DIALOGUE WITH BUSINESS COUNCILS 21 JANUARY

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

Ministry of International TradeMinistry of International Tradeand Industry (MITI) Malaysiaand Industry (MITI) Malaysia

DIALOGUE WITH BUSINESS COUNCILSDIALOGUE WITH BUSINESS COUNCILS21 JANUARY 201121 JANUARY 2011

REINVIGORATING AND TRANSFORMING THE

BUSINESS ENVIRONMENT


PART 1:PART 1:MALAYSIA - OVERVIEW

2

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIAMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA

GROSS DOMESTIC PRODUCT GROWTH OF GROSS DOMESTIC PRODUCT GROWTH OF MALAYSIA, 2009 – 2011 (%)MALAYSIA, 2009 – 2011 (%)

3

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 5.00-6.00%.


TRADE PERFORMANCE OF MALAYSIA TRADE PERFORMANCE OF MALAYSIA 2009 – 20112009 – 2011

4

Source: MOF Economic Report October 2010Notes: 2009 (actual data), 2010 (estimates), 2011 (forecasts), US$1 = RM3.52


MALAYSIA: INFLATION AND UNEMPLOYMENT MALAYSIA: INFLATION AND UNEMPLOYMENT RATE 2009 – 2011 (%)RATE 2009 – 2011 (%)

5

Source: EIU Country Report January 2011 and IMF World Economic Outlook October 2010Notes: 2009 (actual data), 2010 (EIU estimates), 2011-2012 (EIU forecasts)


MITI DIRECTIONS IN 2011MITI 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.

6


MITI DIRECTIONS IN 2011MITI 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.

7


PART 2:PART 2:TRADE AND INVESTMENT PERFORMANCE

8


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

969.11069.44 1106.34

1185.1

988.2 964

536.23 589.24 604.3663.5

553.3 527

432.87 478.15 502.04 521.6434.9 437

103.36 108.46 102.26 141.9 118.4 90

0

200

400

600

800

1000

1200

1400

2005 2006 2007 2008 2009 Jan - Nov2010

RM billion Total Trade Export Import Trade Balance

9

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA 10

RM 73.7 Billion RM 60.1 Billion RM 55.8 Billion

RM 31.2 Billion RM 29.7 Billion

China Japan USA

Thailand Hong Kong


Summary of Malaysia’s Global TradeSummary of Malaysia’s Global Trade

11

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


RM 11.7 Billion RM 4.0 Billion RM 2.8 Billion

RM 2.1 Billion RM 1.9 Billion

USA Japan Hong Kong

Singapore Germany



PART 3:PART 3:MALAYSIA’S INTERNATIONAL RANKING

14


Malaysia’s International RankingMalaysia’s International Ranking

for Investor Protection- Forbes Report 2009for Investor Protection- Forbes Report 2009

11stst

Attractive Location for Outsourcing Destinations- A.T. Kearney Global Services Location Index 2009

Attractive Location for Outsourcing Destinations- A.T. Kearney Global Services Location Index 2009

33rdrd

Most Competitive Economy in 2010- Institute Management of DevelopmentMost Competitive Economy in 2010- Institute Management of Development

1010thth

15


IMD World Competitiveness IMD World Competitiveness Yearbook RankingYearbook Ranking

16


World Bank Doing Business RankingWorld Bank Doing Business Ranking

17


• 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):o Held on 28-30 September 2009 in Kuala Lumpur with the theme “GAME

CHANGE”o Attended by 479 delegates (include 69 speakers, prominent

businessmen, politicians)

• FGCC 2011 FGCC 2011 (11(11thth series of the Conference): series of the Conference):o To be held on To be held on 12-14 September 2011 12-14 September 2011 in Kuala Lumpurin Kuala Lumpuro Proposed theme: AT THE CROSSROADSProposed theme: AT THE CROSSROADSo Target of Target of 400 delegates 400 delegates to attend FGCC 2011.to attend FGCC 2011.

Forbes Global CEO Forbes Global CEO Conference (FGCC)Conference (FGCC)

18


INITIATIVES TO REINVIGORATE AND INITIATIVES TO REINVIGORATE AND TRANSFORM THE ECONOMIC LANDSCAPETRANSFORM THE ECONOMIC LANDSCAPE


PART 4:PART 4:TRADE AND ECONOMIC FACILITATION

20


Snapshots of Initiatives in 2010Snapshots of Initiatives in 2010

21


The The deregulation deregulation

of FIC of FIC guidelines guidelines

include:include:

The The deregulation deregulation

of FIC of FIC guidelines guidelines

include:include:

The repeal of guidelines covering the acquisition of equity stakes, mergers and takeovers.

The repeal of guidelines covering the acquisition of equity stakes, mergers and takeovers.

Listed companies will no longer be subject to equity conditions post-IPO.

Listed companies will no longer be subject to equity conditions post-IPO.

No equity conditions will be imposed on any share transactions. Investment made under relevant sector regulators, it will still be

applicable.

No equity conditions will be imposed on any share transactions. Investment made under relevant sector regulators, it will still be

applicable.

Upon IPO, the equity condition will be subsumed as part of the public spread requirement.

Upon IPO, the equity condition will be subsumed as part of the public spread requirement.

Announced by YAB Prime Minister on 30 June 2009

Deregulation of Foreign Investments Deregulation of Foreign Investments Committee (FIC) GuidelinesCommittee (FIC) Guidelines

22


MALAYSIA’S NATIONAL SINGLE WINDOW MALAYSIA’S NATIONAL SINGLE WINDOW (NSW)(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.

23


• Online duty payment service to Customs.

• 3 Modes of e-Payment:i. Electronic Funds Transfer

(EFT) – supported by 8 banks. Available weekdays, 8:45am – 8:00pm;

ii. DutyNet – provided by CIMB Bank Berhad (available 24/7); and

iii.Financial Services Payment Gateway (FSPG) – web-based system connected to 3 banks (available 24/7).

• Web-based application for online approval of electronic Preferential Certificate of Originby MITI.

• MITI operates e-PCO for the following schemes:i. ASEAN Industrial

Cooperation (AICO);ii. Common Effective Preferential Tariff (CEPT);iii. Free Trade Agreement (FTA);iv. ASEAN-Korea Free Trade Area (AKFTA);v. ASEAN-China Free Trade Area (ACFTA);vi. Malaysia-Japan Economic Partnership Agreement

(MJEPA);vii. Malaysia-Pakistan Closer Economic Partnership

Agreement (MPCEPA);viii.Generalised System of Preferences (GSP); andix. Certificate of Origin for Textiles.

• 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.

NSW ServicesNSW Services

24

• Web-based application for online submission of Customs declaration.

• Available at all Malaysian ports and entry points.

Web-based application that allows Shipping Agents to submit vessel information and cargo report to Customs.


PART 5:PART 5:LIBERALISATION OF SERVICES

25


WHERE ARE WE AND WHAT WE HAVE WHERE ARE WE AND WHAT WE HAVE DONE?DONE?

26


WHERE ARE WE AND WHAT WE WHERE ARE WE AND WHAT WE HAVE DONE?HAVE DONE?

27


WHERE ARE WE AND WHAT WE HAVE WHERE ARE WE AND WHAT WE HAVE DONE?DONE?

28


WHERE DO WE GO?WHERE DO WE GO?

29


WHY?WHY?

30

● 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.

● 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.


PART 6:PART 6:ASEAN

31


• 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.

ASEANASEAN

32


Services LiberalisationServices Liberalisation

• Creating opportunities for services sector.

• Reduction/elimination of barriers to all 4 modes of supply.

• Enhance movement of skilled workforce in ASEAN.

33


Role of ASEAN Private SectorRole 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

34


PART 7:PART 7:MALAYSIA’S FTAs

35


ASEAN FTAsASEAN 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

36


MALAYSIA’S FTA INVOLVEMENTMALAYSIA’S FTA INVOLVEMENTSTATUS/TYPE REGIONAL BILATERAL

CONCLUDEDRegional: 6Bilateral: 5Total: 11

ASEAN Free Trade Area (AFTA) ASEAN-China ASEAN-Republic of KoreaASEAN-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 Partnership Agreement (MPCEPA) Malaysia-New Zealand Free Trade Agreement (MNZFTA)Malaysia-Chile Free Trade Agreement (MCFTA)Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA)

UNDER NEGOTIATIONS

Regional: 3Bilateral: 4

Total: 7

ASEAN-Japan (Investment and Services)ASEAN-India (Investment and Services)Trans-Pacific Strategic Economic Partnership (TPP)

Malaysia-Australia Malaysia-TurkeyMalaysia-EU

UNDERINITIATION

Regional: 2Bilateral: 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)


Significant AchievementsSignificant 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.

38


PART 8:PART 8:FACILITATING EXPORT CONTROL

39


THE STRATEGIC TRADE ACT 2010THE STRATEGIC TRADE ACT 2010Facilitating Trade in a Secure Trading EnvironmentFacilitating 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

40


TIMELINE FOR IMPLEMENTATIONTIMELINE FOR IMPLEMENTATION

41

10 June 2010Gazette of the Act

10 June 2010Gazette of the Act

31 December 2010Gazette of Regulations and Orders

31 December 2010Gazette of Regulations and Orders

1 January 2011•Operationalisation of the STA•Export permits issued for Category 0 item•Nuclear Materials, Facilities and Equipment by AELB

1 January 2011•Operationalisation of the STA•Export permits issued for Category 0 item•Nuclear Materials, Facilities and Equipment by AELB

1 April 2011•Enforcement of STA provisions for Category 0 item•Export permits for Military Items and Category 1-9 items by relevant authority – MITI, AELB, Pharmaceutical Services Department & MCMC

1 April 2011•Enforcement of STA provisions for Category 0 item•Export permits for Military Items and Category 1-9 items by relevant authority – MITI, AELB, Pharmaceutical Services Department & MCMC

1 July 20111 July 2011STA provisions STA provisions enforced for all enforced for all strategic itemsstrategic items


KNOW YOUR PRODUCTS AND ENGAGE WITH US NOWKNOW YOUR PRODUCTS AND ENGAGE WITH US NOW

• Strategic Items include:

a) military items (Category ML)

b) 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

42


PART 9:PART 9:INVESTMENT FACILITATION

43


2011

INDUSTRIAL POLICY DIRECTION IN 2011INDUSTRIAL POLICY DIRECTION IN 2011

Creating conducive investment environment through business facilitation and addressing companies’ issues and concerns

Implementation of related EPPs under E&E and NKEA eg-developing integrated circuit design firms-Increasing the number of silicon producers

Further liberalisation of manufacturing sector through:•Commitments in various FTAs; and•Review of import licensing, e.g. review on APs

44


2011

INDUSTRIAL POLICY DIRECTION IN 2011 (cont..)INDUSTRIAL POLICY DIRECTION IN 2011 (cont..)

Promotion of high value-added, high technology and capital-intensive activities

Monitor and facilitate implementation of mandatory standards

Support establishment/formulation of standard to promote production of high quality, international standard compliance and competitive products for global market

45


INVESTMENT FACILITATIONINVESTMENT FACILITATION

46


QUALITY INVESTMENTQUALITY INVESTMENT


PART 10:PART 10:ROLE OF BUSINESS COUNCILS

48


ROLE OF BUSINESS COUNCIL (BC) IN ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENTPROMOTING TRADE AND INVESTMENT

49


ROLE OF BUSINESS COUNCIL (BC) IN ROLE OF BUSINESS COUNCIL (BC) IN PROMOTING TRADE AND INVESTMENTPROMOTING TRADE AND INVESTMENT

50


Ministry of International TradeMinistry of International Tradeand Industry (MITI) Malaysiaand Industry (MITI) Malaysia

THANK YOUTHANK YOU

Documents

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA Ministry of International Trade and Industry (MITI) Malaysia DIALOGUE WITH BUSINESS COUNCILS 21 JANUARY