Dubbed the Silicon Valley of the East, Penang has been one of Malaysia’s three most industrialized states, boasting a strong high-tech manufacturing industry and electronics sector.

Both domestic and foreign sectors welcomed the NEM, believing that Malaysia must intensify its efforts to remain a dominant player in a region growing more competitive.

“The NEM will attract investors who view Malaysia as a long-term partner. This is no longer an energy-and labor-cheap economy. Investors in knowledge-based industries need to come and appreciate the context of these changes and make their decisions with a longterm perspective,” says Tan Sri Dr. Sulaiman Bin Mahbob, chairman of the Malaysian Industrial Development
Authority (MIDA).

In the latest World Competitiveness ranking, conducted by the International Institute for Management Development (IMD) in Switzerland, Malaysia jumped from No. 19 in 2009 to No. 9 in 2010, a feat that experts attribute to the country’s friendly investor atmosphere, world-class infrastructure and stable political structure.

Another initiative of the prime minister, the “1Malaysia: People First, Performance Now” program, aims to build a “more united” nation, known for being one of Asia’s most culturally and ethnically diverse.

Should the program prove effective, the government believes that economic growth will grow even faster and become more sustainable and stable.

Building on former Prime Minister Mahathir Mohamad’s “Look East” policy, Malaysia wants to
further strengthen its collaboration with longtime trading partner Japan, which is among the country’s top export and import markets.

“Beyond bilateral economic relations, we have a strong foundation of about 13,000 young Malaysian students and professionals trained and educated in Japan,” explains Japanese Ambassador to Malaysia Masahiko Horie.

Japanese Ambassador to Malaysia Masahiko Horie

In early 2010, the two countries reaffirmed their commitment to closer trade and educational exchange when Prime Minister Najib and then Japanese Prime Minister Yukio Hatoyama renewed “an enhanced partnership for a new frontier.”

“The enhanced partnership is based on four pillars: international peace and security, economic partnership, cooperation in the environment and energy and human resource development,” Horie says.

While total foreign direct investment (FDI) to Malaysia declined in 2009 due to the global economic recession, total investment from Japan actually grew from $1.62 million to $2.06 million.

“There are currently 1,400 Japanese-affiliated companies in Malaysia and most of them regard
Malaysia as a positive investment destination,” says Japan External Trade Organization (JETRO) Kuala Lumpur Managing Director Hiroki Takahashi.

“Malaysia has a superb operational environment for the electronics and electric industries,”
adds Takahashi.

The Japanese technology that has featured prominently in the domestic electronics, chemicals and energy industries remains well-protected by a comprehensive intellectual property regime and easily assimilated by a highly skilled, English-speaking local workforce.

“The Japanese should come over and see for themselves. It is time for them to reappraise Malaysia,” says Tan Sri Mahbob.

And in the aftermath of the global economic slump, Malaysia has regained its prominence in
intra-ASEAN trade and assumed strategic importance in the rapidly growing trade between the Association of Southeast Asian Nations, China, India and the rest of Asia due to its central location, as well as excellent transport and logistics infrastructures.

According to Malaysia’s Ministry of International Trade and Industry (MITI), in May, total exports increased 21.9 percent to $17.27 billion, while imports surged by 24.2 percent to $14.28
billion.

The rise in exports and imports is attributed to the robust growth of Malaysia’s electrical and electronic products, liquefied natural gas (LNG), petroleum, chemicals and palm oil sectors. Japan is Malaysia’s second-largest importer and third-largest exporter, after Singapore and China.

As Malaysia aims to be the leader in the fast-growing Islamic finance and halal sectors, the
country offers Japanese companies new investment opportunities to diversify their activities and boost their profits.

Last year, Malaysia also welcomed three new solar energy companies and several foreign
joint venture research initiatives in a bid to develop a domestic renewable energy industry powered by local natural resources.

“Japanese must collaborate further in the green technology, biotechnology and IT industries. This will be mutually beneficial to the economies and environments of both nations,” Horie points out.

Outside of business, Malaysia has also been selected in Japan as the No. 1 destination for a second home, promoted by the “Malaysia: My Second Home” (MM2H) program, which has since assisted more than 1,000 Japanese families in setting up their retirement residences in the country.

Source: http://www.worldeyereports.com/reports/2010/2010_malaysia/2010_malaysia.aspx

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