Mida fo­cus­ing more on qual­ity in­vest­ments to spur growth

New Straits Times - - Business -

EX­CERPTS from an ex­clu­sive in­ter­view with Malaysian In­vest­ment Devel­op­ment Au­thor­ity (Mida) chief ex­ec­u­tive of­fi­cer Datuk Az­man Mahmud.

Q: In the past (from the 1980s to 2001), Malaysia ap­pealed to for­eign in­vestors for brickand-mor­tar in­vest­ments through var­i­ous type of in­cen­tives. How much of that strat­egy has changed over the decades?

A: Tax in­cen­tives are just an­other tool to pro­vide a tip­ping point in pro­mot­ing in­vest­ments. While in­cen­tives are still part of the strat­egy, we have been fo­cus­ing more on ed­u­cat­ing in­vestors about the ben­e­fits of the clus­ter­based ecosys­tem ap­proach.

When Malaysia first started in­dus­tri­al­i­sa­tion after our in­de­pen­dence, it was vi­tal to bring in more for­eign in­vest­ments, par­tic­u­larly as they pro­vided the nec­es­sary spillover ef­fects that could grow our do­mes­tic com­pa­nies. As Malaysia moves up the value chain, we are hun­gry for more in­no­va­tion-based, knowl­edge–in­ten­sive projects within high-growth, high-value in­dus­tries.

With the strong in­dus­trial ecosys­tems built over the years, we are now more tar­geted in our in­vest­ment pro­mo­tion ef­forts, specif­i­cally by fo­cus­ing on qual­ity in­vest­ments that will ac­cel­er­ate and sus­tain the na­tion’s eco­nomic growth.

As we con­tinue this strat­egy, we have been see­ing more qual­ity in­vest­ments com­ing into Malaysia. In fact, 10 years ago, we would not have con­sid­ered the aero­space in­dus­try as one of Malaysia’s crit­i­cal growth ar­eas but to­day, it is iden­ti­fied un­der the 11th Malaysia Plan (11MP) as one of the key strate­gic fo­cus ar­eas to re-en­er­gise the man­u­fac­tur­ing sec­tor, and the in­dus­try is set to soar higher in years to come.

Q: Has Malaysia’s shift to be­come more se­lec­tive in its choice of for­eign in­vestors yielded the de­sired re­sults? A: In line with the cur­rent mega­trends, the coun­try is em­brac­ing the Fourth In­dus­trial Rev­o­lu­tion, or In­dus­try 4.0, which com­bines au­to­ma­tion and digi­ti­sa­tion, whereby con­nec­tiv­ity is the core to driv­ing this rev­o­lu­tion.

We are en­cour­ag­ing our do­mes­tic com­pa­nies to rise up and adapt their busi­ness op­er­a­tions to in­clude smart tech­nolo­gies and pro­cesses. With a strong foun­da­tion in the man­u­fac­tur­ing sec­tor, Malaysia has many at­trac­tive value propo­si­tions to be­come the hub for the devel­op­ment of In­dus­try 4.0 in the re­gion.

For the past 20 years, the man­u­fac­tur­ing sec­tor has em­barked on ro­botic as­sem­bly lines, pre­ci­sion en­gi­neer­ing and com­puter-con­trolled pro­cesses. Our lo­cal com­pa­nies are al­ready un­der­tak­ing re­search and devel­op­ment, en­gi­neer­ing de­sign, in­no­va­tion and sys­tem in­te­gra­tion and de­vel­op­ing pro­pri­etary ma­chin­ery and equip­ment (M&E) for global ex­ports.

The road ahead re­quires Malaysia to go be­yond just eco­nomic growth and build upon the core strengths of the coun­try and se­cure op­por­tu­ni­ties with longterm ben­e­fits for all Malaysians. History proves that Malaysia is a re­silient na­tion.

Q: From Mida’s point of view, what should ideally be the way Malaysia mar­kets it­self glob­ally?

A: Un­der the 11MP, three cat­alytic sub-sec­tors, namely chem­i­cals, elec­tri­cal and elec­tron­ics and M&E in­dus­tries; and two sub­sec­tors of high po­ten­tial growth, namely aero­space and med­i­cal de­vices, have been iden­ti­fied to drive the growth of the man­u­fac­tur­ing sec­tor. The “3 + 2” sub­sec­tors were se­lected due to strong in­ter-link­ages to other sub-sec­tors. In­di­rectly, their ca­pac­i­ties will be the base to sup­port the devel­op­ment of the over­all man­u­fac­tur­ing sec­tor.

For ser­vices, tar­geted sub-sec­tors would in­clude Is­lamic fi­nance, in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy, oil and gas ser­vices, pri­vate health­care, pri­vate higher ed­u­ca­tion, eco­tourism, ha­lal in­dus­try and pro­fes­sional ser­vices as they are trade­able, have high-knowl­edge in­ten­sity and link­ages with the rest of the econ­omy, and the po­ten­tial to gen­er­ate high-in­come jobs.

Mida will con­tinue to spear­head the na­tional in­vest­ment agenda through its strate­gic ecosys­tem ap­proach in un­der­tak­ing pro­mo­tional pro­grammes. Mida will con­tinue to carry out more di­rect en­gage­ment and out­reach pro­grammes with the pri­vate sec­tor and rel­e­vant stake­hold­ers via var­i­ous pro­mo­tional ac­tiv­i­ties (e.g. do­mes­tic pro­mo­tion mis­sions, roundtable meet­ings, sem­i­nars, en­gage­ment with in­dus­try as­so­ci­a­tions and cham­bers of com­merce and in­dus­try).

The road ahead re­quires Malaysia to go be­yond just eco­nomic growth and build upon the core strengths of the coun­try...

Q: In a re­cent Moody’s study, it was found that ro­bot­ics tech­nol­ogy in ad­vanced economies would im­pact trade and man­u­fac­tur­ing

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