OPENING UP

Malaysia 2016 | ECONOMY | INTERVIEW

TBY talks to Y.B. Dato' Sri Mustapa Mohamed, Minister of International Trade and Industry, on Malaysia's foreign trade policies and the country's rising prominence in global markets.

Y.B. Dato’ Sri Mustapa Mohamed
BIOGRAPHY
An economist by training, Y.B. Dato’ Sri Mustapa Mohamed holds a first-class honors degree in Economics from the University of Melbourne, Australia, and a Master’s in Economic Development from Boston University. Born in 1950, he was first elected to Parliament in 1995. He has since held a number of senior governmental positions, including Deputy Finance Minister, Minister for Entrepreneur Development, Minister for Higher Education, and Minister for Agriculture and Agro-based Industry. He has been Minister for International Trade and Industry since 2009.

Malaysia is playing an increasingly important role on the global stage, as evidenced by its chairmanship of ASEAN in 2015 and its presence on the UN Security Council. How can Malaysia leverage this to advance domestic trade and industry objectives?

Malaysia's domestic trade and industry objectives are streamlined with regional and international developments. We believe that this is the best way to enhance our overall economic competitiveness. Market and business friendly policies have always been the core of Malaysia's foreign trade policy. Our increasingly important global role and involvement in major FTAs give us a better market access, which in turn contributes toward sustaining the country's economic growth and development. Today, Malaysian micro, small and medium enterprises (MSMEs) are penetrating regional and global markets. We now have more than 1,000 Malaysian enterprises doing business in ASEAN, and many of them also have a presence in other key markets such as China and India.

Negotiations are underway to establish FTAs between Malaysia and other regions outside ASEAN, such as China, India, and the EU. What new opportunities and challenges will this present for Malaysian manufacturers?

As a trading nation with a comparatively small domestic market of 30 million people, it is imperative for Malaysia to continue adopting an open trade and investment regime to promote economic growth, provide opportunities for high skilled employment, and technology transfer. Beyond ASEAN, we are currently in negotiations for two major FTAs namely the Trans-Pacific Partnership (TPP), which will provide a market of 800 million people and a combined GDP of $2.75 trillion, as well as the Regional Comprehensive Economic Partnership, which consists of 16 countries with a market of more than 3 billion people. These FTAs will enhance Malaysia's attractiveness as a preferred investment destination and high value-added manufacturing hub.

What current initiatives are underway to establish Malaysia as an international hub for Halal products and services?

Malaysia's halal industry has been growing consistently over the past few years. As of 2014, total exports of halal products stood at $8.65 billion while 206,000 jobs were created in this industry. As Malaysia strives to be the leading global hub for halal products and services, we are ramping up our efforts to stay ahead of others by offering a complete halal ecosystem. Instead of focusing only on halal products and services, we also provide other halal-related support services including Islamic finance and banking, takaful, logistics, and tourism.
At the same time, we never lose sight of the importance of developing the capacity and capability of our local halal companies. The Halal Business Transformation program was introduced in 2011 where various initiatives have been carried out such as equipping the workforce with the right knowledge and skills, providing advisory services, and facilitating financial applications, as well as establishing business linkages between local companies and other multinational players. To date, there are close to 1,700 companies, which have generated total sales of $340 million, that have been participating in this program.

What is your outlook for 2016?

As of June 2015, there are 156 projects in the pipeline with investments worth $3.37 billion for the manufacturing and services sectors. These projects are mainly in E&E, chemicals and advanced materials, transport technology, healthcare, education, hospitality, and food manufacturing. Moving forward, MITI will continue to ramp up promotional activities to attract quality investment projects with high technology and high value-added features that have strong linkages with domestic industries. Furthermore, we are set to officially announce the formation of the ASEAN Economic Community (AEC) in November of this year. The AEC seeks to establish a single market and production base in this region of more than 620 million people with a combined GDP of $2.57 trillion. This regional economic integration will offer abundant opportunities for foreign investors from outside ASEAN.