NO SUCH THING AS A FREE LUNCH

Malaysia 2017 | ECONOMY | INTERVIEW

TBY talks to Dato' Dzulkifli Mahmud, Former CEO of Malaysia External Trade Development Corporation (MATRADE), on youth entrepreneurship, attracting Fortune 500 firms, and high aerospace aspirations.

 Dato’ Dzulkifli Mahmud
BIOGRAPHY
Dato’ Dzulkifli Mahmud started his career with the Ministry of International Trade and Industry (MITI) in 1981, and is the former CEO of MATRADE, an agency under the ministry. Prior to that appointment in June 2015, he was the Deputy CEO of MATRADE, Senior Director of the Exporters Development Division MATRADE, Senior Trade Commissioner for the Gulf Cooperation Councils, and the Consul and Trade Commissioner of the Consulate of Malaysia in Milan. He holds a bachelor’s in economics from the University of Malaya and a graduate degree in public management from the Institute of Public Administration Malaysia.

How can MATRADE help Malaysia gain recognition for its quality and innovation?

Malaysia is a strong exporting country; it has the raw materials, production, talent, and ingredients to develop. It is not an OPEC member; however, it produces and exports oil. Around 80% of its exports are manufactured goods. It has a strong foundation; however, it needs to develop the ability to turn its resources into products and services that are exportable. Secondly, we want more Malaysian SMEs to export. At the moment, their proportion of total exports accounts for 19% and we want to increase this to 33% by 2020.

How do you help SMEs to flourish?

We recently organized the ASEAN Youth Entrepreneurship Carnival, which was an inaugural event in ASEAN. This is a good platform for startups and young entrepreneurs to meet with investors and venture capitalists. They can also meet their counterparts from other ASEAN nations and exchange best practices. We want to expand entrepreneurship beyond borders. Countries have passports but ideas are borderless. People are increasingly working through online platforms, and payments are done electronically, while logistics companies can deliver anywhere, so there are no issues. Entrepreneurship is the driver of our economy.

What are the advantages and disadvantages of FTAs for Malaysian manufacturing?

The advantages outweigh the disadvantages. The most important benefit is that import and export tariffs will be waived, which is a big cost for SMEs at the moment. It will drive innovation and make our products more competitive and it also becomes easier to find partners both for trading and product development. We want to ignite the stamina in our entrepreneurs and encourage the exploration of opportunities abroad. We can help them manage the risks. Currently, there is only one Malaysian company on the Fortune 500 list: Petronas. We have the potential to have more giants and we should invest more in branding ourselves and our quality.

Aerospace is often mentioned as a key industry for Malaysia to move up the value chain. Is MATRADE actively promoting the nation's strength abroad?

The aerospace industry is growing globally. Mexico has transformed its automotive industry into aerospace. We are looking to do the same in Malaysia, as having an aerospace manufacturing industry will bring the highest standards to our country. We have the ecosystem in place and we already have some industry giants who have chosen Malaysia to be part of their global supply chain. We can transform our manufacturing industry into a higher value industry and grow our human resources along the way. We need to transform our mindset to go for the niche market. This is one way of making Malaysia more competitive. In aerospace, we are number two in ASEAN after Singapore and because of our size we can aspire to become number one.

How do you envision moving the services industry forward?

We have a deficit in the services sector at the moment and have to study more closely how we can push the sector forward. We have many talented people, often with study and work experience abroad, and we should encourage them to take their experience to develop our services sector. There is a private initiative called Malaysian Incorporated, a consortium that jointly bids for projects abroad, at the moment mostly in the construction and oil and gas industries. This practice can be expanded and emulated into other sectors. Secondly, we believe franchising is another good way to introduce more momentum into our services. A third component is tourism, including medical and preventive care tourism.

Could you elaborate on your activities in promoting medical tourism?

We can learn from Japan; its people have a healthy lifestyle and, therefore, a higher life expectancy. After their retirement, Japanese people still have 20-30 years that they spend without creating value in the economy, but are often still affluent. There are opportunities for us there; we can support healthy ageing and provide healthcare to the elderly.

What do you envision for the new convention center that is currently under construction?

We are building the Malaysia International Trade Exhibition Center, the biggest in the country. Malaysia can become the top destination for MICE in the region, and having a state-of-the-art convention center within the city limits of KL will help us with that.