Malaysia

Why Malaysia

• Malaysia is one of the fastest growing economies in the region; 
• Malaysia is a significant export market for Australia and our 12th largest trading partner; 
• It is also our third largest trading partner in ASEAN; and 
• Total trade in 2007-08 was $14 billion (2.9 per cent share of Australia’s total trade).

Malaysia is competing hard with other countries in the region to provide a pro-business environment. To this end the government has relaxed foreign ownership laws in the manufacturing sector and has also implemented a range of incentives to attract investors in priority areas such as operational headquarters, regional distribution centres and international procurement centres. The government has also invested heavily in infrastructure to facilitate both efficient business and a high standard of living, particularly in the major centres.

In late April of this year Prime Minister of Malaysia, Dato’ Sri Mohd Najib Abdul Razak made an announcement on the liberalisation of Malaysia’s services sector. The services sector contributes 55 per cent to the GDP and accounts for 57 per cent of the total employment in Malaysia. Recognising the growth potential in the services sector, the Government has decided to immediately liberalise 27 services sub-sectors, with no equity condition imposed. These sub-sectors are in the areas of health and social services, tourism services, transport services, business services and computer and related services. The liberalisation of the services sector is pursued with the view of creating a business environment to attract investments, technology and to create higher value employment opportunities. These efforts are expected to enhance the level of competitiveness of the services sector in the country. Download the complete media release here.

Malaysia’s 2020 vision is to achieve developed nation status. The government plans and manages its progress towards achieving this vision through five year plans.

On 7 April 2005, Australia and Malaysia agreed to launch negotiations on a bilateral Free Trade Agreement (MAFTA). The decision to begin MAFTA negotiations built on an already strong and broad-ranging bilateral relationship. It also followed consideration by both governments of comprehensive scoping studies into the likely impact of a bilateral FTA. The studies reached the conclusion that MAFTA would deliver significant benefits to both countries. 

Four full rounds of MAFTA negotiations have been held since May 2005, the most recent in Kuala Lumpur in July 2006. Negotiations were then suspended in favour of pursuit of the recently concluded ASEAN-Australia-New Zealand FTA. Australian and Malaysian officials met in Canberra on 24-25 November 2008 and agreed on a process and work program with a view to resuming formal MAFTA negotiations in 2009. Both sides have committed to completing a comprehensive, high-quality agreement.

Export Opportunities
Opportunities exist in the following areas: 

• Oil and Gas: oil companies will invest heavily over the next 5-10 years to develop new discoveries in deeper waters; 
• Education and training: the Government is making significant investments to help Malaysia reach “developed” status by the year 2020; 
• Information and Communication Technology: major local players are increasing their investments in the latest ICT technologies; 
• Agriculture: the Government is encouraging activity in horticulture and animal husbandry to stem the increase in food imports; 
• Environment: Government efforts to overcome weaknesses in sub-sectors such as Municipal Solid Waste and Air Pollution; 
• Power: transmission and distribution deficiencies in Peninsula Malaysia 
• Water: opportunities exist around Non-Revenue Water and the deterioration in water quality for end-users; 
• Aerospace: Government promoting collaborations with foreign companies with incentives available in the areas of MRO, Training and Manufacturing; 
• Construction: further investment expected in land, sea and air infrastructure under the 9th Malaysia Economic Plan (2006-2010) 
• Healthcare and Medical: Ministry of Health looking to upgrade and restructure health services to cope with increasing demands and ageing population.