Posts Tagged ‘Malaysia’

causewaySingapore recently added toll charges to the Causeway, making travel to the region more expensive. Singapore followed suit. According to a member of the Land Transport Authority, Singapore’s policy is to do what Malaysia does. There are some specifics in the new toll (regarding the Eastern Dispersal Link [EDL] and the Malaysian Causeway Customs, Immigration and Quarantine Complex [CIQ]). Economists and businessmen are arguing that these tolls are resulting in a negative impact on Johor investment.

However, according to Tan Sri Shahrir Samad, the Singapore tolls will not have this effect. He believes that investors will find a way around it, like working virtually. In addition, he pointed out that property rentals in Johor were still significantly cheaper than renting in the republic.

But not everyone agrees with this. Nur Jazlan Mohamed – Pulai’s Johor MP – pointed out that Malaysians traveling to Singapore on a daily basis will “get hammered twice.” And, it will impact Johor’s businesses, as according to Boo Cheng Hau, “for an average car, it would cost RM33 the toll charges on both Iskandar and Woodlands CIQ. Even though it is only S$13, which may not be a burden for Singaporeans, it would certainly be a heavy burden for Johorean commuters.”

Thus it might be wise for both governments to figure out a solution together for further development. As far as Hau is concerned, this will include: “abolishment of tolls at the CIQs, speeding up MRT/LRT connections between Singapore and Iskandar Malaysia, and environmental protection of Johor Straits including the Forest City project.”

It looks like those who want to make a sound investment might benefit from taking a peek at what’s been going on in Malaysia in recent times. The country’s “political stability and gateway to the huge market in the region,” is making it an increasingly good choice. As well, the region has received a significant economic boost due to implementations carried out under Datuk Seri Najib Tun Razak, the country’s Prime Minister.

America Ambles Towards Malaysia

So it now makes sense for Americans to make investments in Malaysia which it is doing. Since the South East Asia has a high population of nearly 600 million, this makes it a very large market. Just today, Datuk Seri Dr Jamaluddin Jarjis, the country’s Ambassador to America gave a brief to US journalists to prep them for the visit from Najib who is currently in England.

But the question on everyone’s lips is why would Americans be turning outside their already fragile-economy country to make investments elsewhere and not instead choose to help their own economy? Apparently Malaysia’s advantages render it a perfect “platform [through which] to enter the region.” In addition, America views Malaysia as “a serious player in protecting intellectual property rights and had a reliable work force with a good command of English.”

American-Malaysian Stats

If you just start looking briefly at the history of trading between the two countries, you will start to understand why there is so much excitement at future coalitions. Just last year for example, America was the fourth largest trader in Malaysia, resulting in $36.43bn, a jump of $5.4bn from the previous year. There are further investments predicted too, with the Malaysian Investment Development Authority (MIDA) anticipating American investments to jump 10 percent this year from 2010.

More Business Opportunities in SE Asia

There are continuously more and more business opportunities becoming available in South East Asia. Just yesterday, South Korea’s SK Telecom announced its $16.5m additional investment in a Malaysian broadband operator with a view to developing its presence in the SE Asian market. By 2020, it is expected that around 36 percent of the country’s population will be able to access broadband services. Right now that figure stands at half – 18 percent.

Malaysia Goes Muslim?

Another attractive feature about Malaysian investments is that the country could be used as “a partner to enter Muslim countries.” Various businesses are working with Malaysians in America in an attempt to “use our citizens as a bridge to the Muslim countries.”

Indonesia and Malaysia Join Forces

There have been substantial efforts made to encourage companies from Indonesia to make investments in Malaysia which, has also resulted in a re-balance of “bilateral investment between the two friendly neighbors.” According to Datuk Seri Mustapa Mohamed (International Trade and Industry Minister for Malaysia), various companies from Indonesia have been discussion four memorandums of understanding (MoUs) with four companies in Malaysia for possible investment opportunities there. He pointed out that once negotiations are completed, there will be a signing ceremony in Malaysia.

Business Summit

The Asean-EU Business Summit takes place today along with the Asean Economic Ministers’ Meeting, which Mustapa is attending. He is using these meetings to meet up with various figures in the Indonesian corporate world who are involved in these possible investments.

Origins of Success

The way it all started was when Tan Sri Muhyiddin Yassin, Deputy PM of Malaysia, came to Indonesia and met with industry “captains” in the industry a year ago. This was what led to such an optimistic response from investors in Indonesia. This led to Malaysian companies inviting “Indonesian Chinese corporate figures from the Indonesian Chinese Chambers of Commerce and Industry to Malaysia in February to explore investment prospects in Malaysia particularly in projects slated under the Economic Transformation Program.”

The good news for Indonesia is that the economy has grown so fast. But this has resulted in the country’s businessmen looking for investment possibilities outside of the republic. Now Malaysia has invited Indonesians to use its country “as the platform to set a basin foreign investment.” These days Malaysia is definitely doing better vis-à-vis investments between the two countries as trade is up to over $2bn and Indonesia’s is $600m in Malaysia.

Malaysia: Major Asia Asset

Just two days ago a $3.7bn investment announcement came from Malaysia, set to “to jumpstart foreign interest in its economy even as other Asian countries try to stem speculative inflows in search of higher-yielding markets.” The country’s Prime Minister (Najib Razak) intends to try and get $444bn worth of investments resulting in Malaysia becoming a “developed country by 2020,” including $165m by Asia Media to create digital media infrastructure as well as the establishment of a state-owned energy development agency to be able to attract $106m worth of investments this year. This is all part of the country’s “Economic Transformation Programme,” a project that is due to be put into practice over the next decade.

Other Asian Countries Less Successful

Malaysia has been doing pretty well recently vis-à-vis investments. Indeed it has already attracted around $5bn in pledges from Exxon Mobil and Royal Dutch Shell Pic as well as other (smaller) projects. For example Indonesia, the Philippines and Thailand are having quite a few issues attracting investments anything near to the success of neighboring Malaysia.

But this hasn’t deterred Najib who is determined to ensure Malaysia stays one step ahead, “transforming [it] into a high-income economy within 10 years by generating new growth areas and restructuring the economy to lure investors.” Yet this goal is not as easy as it may seem. Investment blueprints from the past aren’t showing such great results. As well, in general the economy has been suffering from a less-than-skilled workforce to enable it to develop into the “financial services hub” it wants to. Yet it is past the stage of being a low-end manufacturing center,” as countries such as Vietnam now have that role.

Notorious Najib

Still, given all these efforts made by the country’s premier, the public is remaining loyal to Najib. Although one has only to look at the facts on the ground to see where the country really is, given that the exchange was down more than 5 percent from where it was just four years ago. While there is now more opportunity for competition, in general, investors are expecting the government to “take more aggressive steps to reduce its fiscal deficit and overhaul an affirmative action policy they say hinders competition.”

Malaysia PJ: Malaysia Post Japan’s Trauma

It might not have been a surprise if any parts of Asia – including Malaysia – would have been negatively impacted by Japan’s trauma. But in fact this hasn’t been the case, according to Datuk Donald Lim Siang Chai, the country’s Deputy Finance Minister. He claimed that it will “have little impact on the Malaysian economy in 2011.” Vis-à-vis the country’s exports to Japan he said that actually some areas (like plywood and liquid natural gas) would actually probably “increase during the second quarter of this year as Japan increases its reconstruction work of earthquake-damaged areas.”

As well, Malaysia probably won’t be affected by Mid-East and North African troubles either since trade between those countries is anyway only at around 2 percent.

So all in all things are looking good right now for Malaysia. The country has developed a strong enough economy and excellent relations with regions with which to continue exporting to see it through any troubled times Asia may be encountering.

Pakistan Packs It In

Despite the crazy floods to strike the country just a year ago, impacting a staggering 18 million people, it looks like Pakistan’s economy is actually growing today. Indeed, it looks like the country will be joining forces with Malaysia and economists expect economic cohesion between the two countries to expand “by at least 10 percent this year.”

According to Datuk Mukhriz Mahathir, Malaysia’s Deputy International Trade and Industry Minister, there could be joint work between the following sectors: chemicals, palm oil downstream products, petrochemicals, and telecommunications. Because both countries have their own strengths, Mahatir told a “Business and Investment Opportunities in Pakistan” conference that he believes the two should take advantage of each other for mutual benefit.

Indeed, this has already been happening. The figure recorded for Pakistani investments in Malaysian manufacturing area reached a total of RM1.099 billion spanning 26 projects. As well, last year trade between the two countries was recorded at RM7.991 billion.

Booming Bahrain

Economic and financial advancement in Malaysia is going beyond the scope of its host country. Indeed its trading with Bahrain shot up to $192.2 million. As well, last year Malaysian exports to Bahrain reached $71.57 million and $120.6 million the other direction.

According to CEO of My Events International, Shahul Hameed, this “increased trade not only reflects a healthy business relationship with emerging countries in the South East Asian region but also shows its eagerness to explore key investment and financial opportunities inside and outside of the Middle East region.”

For sure whenever political issues get ironed out it, the way will be paved for economic and financial development as well.

Japanese banks are focusing on developing lending agreements In Malaysia and Indonesia, the fastest developing economies. Southeast Asia has a large population, a developing infrastructure and a many natural resources. Moody’s, noting Indonesia’s better debt position and it’s healthy economy, has acknowledged Indonesia’s potential by raising its rating.

Therefore, Japanese banks are creating deals with local lenders and are also enlarging their offices to increase their loan business in Malaysia and Indonesia. One of Japan’s largest banks, Sumitomo Mitsui Financial Group, will be expanding its employees in Malaysia from about 30 to approximately 100. In addition, it expects to increase employees in Indonesia from the present level of 200.