Speech by H.E. Dato’ S. Thanarajasingam
Ambassador of Malaysia to Portugal
“Strengthening Malaysia-Portugal Relations”
Date : 20 March 2007
Time : 10:00 am
Venue : Portugal Chamber of Commerce and
Industry
Rua das Portas de Santo Antão 89,
1169-022 Lisbon, Portugal
Distinguished Guests, Ladies and Gentlemen,
It is indeed an honour and privilege for me and the members of my delegation to meet all of you this morning. This is the first meeting for me in Portugal and I am sure there are many more to come as we together add substance to Malaysia-Portugal relations. Indeed this is my first visit to Portugal, but it shall not be my last.
2. My delegation and I are deeply grateful to the Chamber of Commerce and Industry, Portugal for working closely with us in organizing this meeting and in inviting you this morning. Given the importance of this meeting, I have been joined by Ms. Tan Piak Bong, Counsellor Investment, Mrs. Adlina Borhan, Director Tourism Malaysia, Mr. Zainuddin Mohammad, Manager of Malaysia Airlines and Mr. Adlan Mohd. Shaffieq, Second Secretary.
3. The Malaysian Honorary Consul Mr. Jorge Santiago Neves is present; as well as Mr. Garcia who used to serve as Malaysia’s Honorary Consul in Rio de Janeiro during the days when I served as Ambassador to Brazil. They will help me to answer your questions as well as hold bilateral meetings with all of you.
Ladies and Gentlemen,
4. Malaysia-Portugal relations are longstanding. The first Portugese came to Malacca in 1511. The Portugese stayed there until 1642 when the Dutch displaced them. Evidences of these old ties are vividly present today and continue to be literally unearthed as well. There is not only a small Malaysian Portugese community but many Portugese words have become part of the Malay language. Recently our Heritage officials discovered parts of an old Portugese fort, which was a portion of the A-Famosa erected in the 1500s. Today as we meet, our bilateral trade stands at €203.4 million (RM938.5) while our contacts at all levels of our societies remains limited. It is my hope that our meeting will help contribute towards reviving a closer period in our relations in all sense of the word.
5. This year is a great year to enhance Malaysia-Portugal ties, as Malaysia celebrates 50 years of independence. Various programmes have been designed to observe this important occasion and I hope to see some Malaysia-Portugal programmes within this framework.
6. Malaysia’s success is a celebration for diversity and serves as a model for understanding and harmony. From a two commodity-based economy 50 years ago, Malaysia of 2007 is a modern and diversified economy. It is politically stable with its multiracial people of 25 million living in peace and harmony. Through our National Development plans, we have reduced poverty from a high of 40 percent to a low of 7 percent. The Malaysian economy is an open economy, dependent on the well-being of this planet that we all inhabit and share.
7. For the next 20 minutes, I will give you an overview of the Malaysian trade and economy, including the business opportunities and development plans in Malaysia; I will also brief you on the current state of bilateral relations between our two countries; and finally share with you some proposals which could contribute towards our common efforts to increase and strengthen our relations.
Ladies and Gentlemen,
II. Highlights of the Malaysian Trade and Economy
8. Malaysia has a strong and open economy as well as a Government committed to international competitiveness in terms of trade and investment. In 2005, Malaysia was ranked the 19th largest exporter and the 24th leading importer in the world. Malaysia is among the top 20 trading nations offering the international community a variety of world class products. The region where we are situated, i.e., South East Asia or ASEAN, is the second largest regional export destination, recording a growth of 10.3 percent to RM153.544 billion (€33.38 billion).
9. Malaysia’s total trade has breached the RM1 trillion mark (€217.4 billion), with exports continuing on an uptrend to RM588.949 billion (€127.8 billion), and imports at RM480.493 billion (€104.5 billion). With this, the value of total trade for 2006 was RM1.069 trillion, 10.5 percent higher than the preceding year.
10. The openness of the Malaysian economy and our dependent on the well-being of the international grid is demonstrated in the following facts:
Malaysian Product Ranking
· Rubber Products Sector
o Rated as the world’s number one producer of dipped goods for both volume and quality.
o World’s leading producer and exporter of natural rubber medical gloves, catheters and latex thread.
o Supplies 55% of the world’s market for rubber gloves, 80% for catheters and 70% for latex thread.
· Food Manufacturing Sector
o Largest cocoa processing centre in Asia.
o Ranked 5th in the world.
· Oil Palm Products Sector
o World’s leading producer and exporter of palm oil. Malaysia currently accounts for 51% of the world palm oil production and 62% of world exports.
o World’s leading producer and exporter of oleochemical products.
o World’s leading producer of basic oleochemical products with a share of about 25% of the global production of natural fatty alcohol and fatty acids.
· Wood and wood products Sector
o World’s third largest exporter of medium density fibre-board.
· Electrical and Electronics Sector
o As one of the leading exporters of electronics in the world, Malaysia markets electronics components, consumer electronics and industrial electronics.
o Among developing countries, ranked second largest exporter of semi-conductor devices, used in a diverse range of industries, such as automotive and telecommunications.
o Among the world’s 5 largest exporters of home air-conditioners and semi-conductor devices such as memories, microprocessors, micro-controllers and logic and analogue devices.
· Textiles and apparel
o Backed by vast experience, superior quality and reasonable prices, Malaysian textiles and apparel, one of the country’s leading export sectors have gained a strong foothold in the global markets.
o Malaysian textile manufacturers have always had an excellent reputation for quality, reliability and prompt delivery, making their products a favoured choice in competitive markets such as the US, Hong Kong and Japan.
o By using processes such as CAD/CAM (computer aided design/computer aided manufacturing) Malaysian companies can easily meet clients’ rigid production time-frames and requirements for prompt delivery. These qualities ensure that Malaysia remains an attractive outsourcing destination for international brands, such as Adidas, Guess, Gucci, Ralph Lauren and Timberland to name a few.
· Investment
11. During 2001-2005, FDI inflows into ASEAN totalled US$118 bilion. Malaysia was the second largest recipient of FDI within ASEAN, with US$14.8 bilion, behind Singapore (US$68.3 billion). Thailand was third with US$11.9 billion followed by Vietnam (US$7.6 billion). Overall, Malaysia ranked 41 in the world and 19 among developing countries.
· Tourism
12. In terms of tourism, Malaysia was ranked 12th in the Global Ranking of Top Destinations in the World, (1st France, 2nd Spain, 3rd USA, 4th China). For Asia Pacific, Malaysia is second behind China (3rd Hong Kong, 4th Thailand).
Business Opportunities in Malaysia
13. Malaysia has continued to improve the business environment to attract foreign investments. Some of the measures introduced are:
o allowing 100 percent foreign equity for all new, as well as expansion / diversification projects in the manufacturing sector.
o allowing automatic approval of up to 10 expatriate posts (including 5 keys posts) for manufacturing companies with foreign paid-up capital of US$2 million and above.
o establishment of Immigration offices in MIDA and the Multimedia Development Corporation (MDeC) to facilitate approvals and expedite issuance of visas.
o customised incentives for projects which are capital and technology-intensive and that have significant impact on the economy.
o reduction in corporate tax: 27% in 2007 and 26% in 2008.
14. In addition, the necessary business and investor-friendly policy measures and initiatives were introduced by the Government to improve the business environment in the country, including:
(i) implementation of new strategies and fine-tuning of the existing policies based on the feedback from the private sector, both foreign and local;
(ii) improvement in the Government's delivery system;
(iii) intensive marketing of Malaysia as an investment destination in capital exporting countries;
(iv) targeting potential companies in Malaysia and globally;
(v) the provision of customised incentives for quality investments proposed by both domestic and foreign investors.
15. In manufacturing, Malaysia:
(i) is no longer a cost competitive location for labour intensive manufacturing operations.
(ii) over the years, the Malaysian workforce has acquired skills and knowledge to move up the value chain.
(iii) the foundation for growth and development of skills and knowledge-based industries have already been laid:
i. Multimedia Super Corridor Malaysia.
ii. specific regions to develop the biotechnology industry.
iii. Penang's dominance in the E&E sector to further integrate with the global E&E value chain.
Development Plans
16. Malaysia had also launched the Ninth Malaysia Plan (2006 – 2010) on 31 March 2006. One of the objectives is to position the country to achieve developed nation status in 2020. In this regard, the Government had allocated US$53.4 billion for development expenditure. Our manufacturing sector is projected to grow by 6.7 percent per annum with emphasis in:
i. high-technology
ii. knowledge-based
iii. skills-intensive activities
iv. services sector
17. Under the Ninth Malaysia Plan, several new growth regions have been identified for integrated development. The first of these growth regions was launched recently in the Southern part of the country, namely the South Johor Economic Region.
(i) 2, 217 sq. km. land, making it one of the single largest integrated developments in the country.
(ii) US$100 billion investments expected over the next 25 years.
(iii) projects identified :
i. South Johor Logistics Cluster
ii. Waterfront City
iii. Medical hub
iv. Education City
v. International resorts
vi. New infrastructure projects including upgrading of existing facilities
18. The Northern Economic Region and a similar one encompassing the North East will be launched soon.
19. Portuguese investors are welcome to participate in the development of these regions.
20. In addition to the Ninth Malaysia Plan, the Government introduced the Third Industrial Master Plan (2006–2020) on 18 August 2006. The Plan:
(i) targets at positioning Malaysia's long-term competitiveness to meet the challenges of the fast changing global economic environment.
(ii) sustaining the manufacturing and services sectors as the source of growth.
(iii) ensuring a conducive investment environment.
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