SIE promotes investment, local trade: Muhyiddin
Trade fairs and exhibitions constitute a key global marketing tool and provide a vital information link between domestic and foreign exporters, importers and manufacturers. International Trade and Industry Minister Tan Sri Muhyiddin Yassin said as the Government encourages both foreign and local investors to invest in the various sectors of the economy, trade fairs such as the Sabah International Expo2008(SIE) promote such investments as well as enhance local trade. Speaking at the closing of the SIE last night, Muhyiddin said as a relatively small and highly open economy, Malaysia’s economic outlook will inevitably be influenced by the current changes facing the global economy, namely the global financial crisis and weaker consumer demand in the US and other developed countries. “Although these uncertainties would have some impact on Malaysia, the country’s economy is expected to attain a satisfactory growth in 2009, in view of the country’s strong economic fundamentals and its diversified base,” he said. According to him, foreign investors have continued to show encouraging interest in investing in the country and Malaysia continued to attract substantial investments into the manufacturing sector in the first eight months of 2008. Total investments approved during the period from January to August amounted to RM49.8 billion, of which foreign investments totalled RM36.8 billion while domestic investments were RM13 billion, he said, adding foreign investments during the eight- month period also surpassed the total in 2007 which amounted to RM33.4 billion. Such sustained inflows, he said, attest to Malaysia’s continued competitiveness, especially now in the wake of intense competition from both developing and developed economies, regionally and globally. Muhyiddin pointed out that the current focus of the Malaysian Government is towards attracting investment inflows into high technology, high value-added, knowledge based and skills intensive industries. The industries being targeted for promotion include electronics, ICT, biotechnology, machinery and equipment, renewable energy and medical devices, he said. “It is imperative that we continue promoting foreign investments into the country as we derive tangible and intangible benefits for the development of Malaysian SME’s he said adding that many Malaysian SMEs have today emerged to become global players and a part of the global supply chain from initially being suppliers to multinational corporations (MNCs). He also said that while promoting foreign investment, equal emphasis must be placed on the need for domestic investors to participate in the country’s industrial development as domestic investments constitute an essential ingredient of the country’s industrial development. Besides promoting foreign and domestic investments, the Malaysian Government is also promoting cross-border investments and Malaysian companies are encouraged to venture abroad to expand their markets, tap new investment opportunities, acquire new technology and gain access to raw materials, he said pointing out that investments by Malaysian companies overseas will also generate foreign exchange to the country. According to Muhyiddin, cross-border investments in the long term will also enable Malaysian companies to become part of the global production network and ultimately become part of the global production network and ultimately become industry players. He disclosed that direct investments abroad by Malaysian companies have increased from RM22 billion in 2006 to RM37.8 billion in 2007, reflecting the growing interest among Malaysian companies to diversify their operations abroad. “Beside the manufacturing sector, we should also continue to focus on the promotion of the services sector as it is expected to register an annual growth of 7.5 percent in the IMP3 period and its contribution to the GDP by 2020 is expected to be around 59.7 percent,” he said. Muhyiddin pointed out that service related activities have spin-off benefits to other sectors of the economy such as in ernp1oymenbnking, insurance, logistics and the wholesale and retail sectors which open up business opportunities to Malaysian suppliers and distributors. The growth in the services sector, he said, has contributed significantly towards increasing Malaysia’s global trade. He disclosed that Malaysia’s total trade from January to August this year grew by 12.7 percent to RM8O&2 billion compared with RM7 14.5 billion in the corresponding period of 2007. Exports, according to Muhyiddin, expanded by 16.1 percent to RM499.9 billion while imports increased by 8.7 percent to RM355.3 billion. He added that in August this year, Malaysia recorded its 130th monthly trade surplus since November 1997. The manufacturing sector, he said, remained the largest contributor to Malaysia’s exports, accounting for more than 70 percent of the country’s total exports. Major export products from the manufacturing sector were E&E products, chemicals and chemical products, manufactures of metal, hiachinery, appliances and parts and wood products. “To sustain investment inflows into the manufacturing as well as the services sectors, the Government will continue to respond accordingly to local and global developments to maintain the country’s attractiveness,” Muhyiddin said. According to him, the country’s pragmatic business friendly policies, improvements in public delivery system, develop infrastructure and availability of the desire human resources are among the essential pre-requisites which have enticed well- known foreign companies to set up their operations in Malaysia. The Government, he said, will continue to implement new policies and fine-tune existing ones to maintain a competitive and vibrant business operating environment for the business community.