News Room - Business/Economics

Posted on 24 Dec 2009

Japan investors keen on Malaysia's new economic model

The Japanese business community is eager to know full details of Malaysia's New Economic Model and the progress made in the various economic corridors, especially Sarawak Corridor of Renewable Energy.

 

This was revealed during a recent interview by Japan's Nikkei Business with deputy prime minister Tan Sri Muhyiddin Yassin.

 

He had explained to the weekly magazine the general plan to bring the country's economy to higher income from its present status of upper middle income economy.

 

The government had embarked on formulating a New Economic Model which would be based on innovation, creativity and high value sources of growth, he said.

 

"This model is intended to shift our reliance from a manufacturing base dependent on semi-skilled and low-cost labour to one that focuses on high technology and a modern services sector dependent upon skilled and highly-paid workers," he said in the one-hour interview.

 

"For this to happen we will be increasing investments in human capital development and building a strong foundation in research and development, design and engineering and commercialisation of research activities," he said.

 

As for the corridor development, he said, it's aim was to spread the economic development throughout the country with specific focuses.

 

"The corridor development is moving. Some is moving faster than the other," he said, adding that Iskandar Malaysia had secured big investments, especially from the Middle East.

 

Asked on the meetings he had with captains of industry in Tokyo and Osaka during his specific investment mission from December 7 to 10, Muhyiddin said he had "active and fruitful" meetings.

 

"We had discussions on many areas of interest and incentives. We also spoke about how companies like Toyota can help Malaysia to move forward in the automotive industry."

 

Basically, he said, Japanese investors were not only keen to make a one-time investment in Malaysia but also expanding it on the future potentials the country could offer.

 

He said it was a great opportunity for him to explain the Malaysian government's policies to the Japanese business community.

 

During the interview, Nikkei Business also asked Muhyiddin on the halal business and its potential, saying that Japanese investors were also interested in the area.

 

"Malaysia has established itself as the most advanced Muslim country in setting the Halal standard, which is very stringent," he replied.

 

He explained on how food, products and services can be labeled as halal. Halal pharmaceuticals had a good future and offerred opportunities for business. he added.

 

"We believe there is a huge potential, especially in pharmaceuticals and cosmetics," he said.

 

Other sectors of interest are Islamic finance and banking and tourism.

 

Japan's investment in Malaysia surged to $1.87 billion between January and September involving 45 approved projects, making it the largest foreign investor in Malaysia.

 

Last year, total investments from Japan were $1.6 billion in 60 approved projects.

 

To date, there were 2,260 projects with Japanese participation being implemented in the manufacturing sector in Malaysia, with investments worth $14.9 billion.

 

Over the last five years, Malaysia's trade with Japan recorded an upward trend.

 

Last year, Malaysia's total trade with Japan was $41.1 billion, with exports at $21.6 billion and imports $19.5 billon.

 

Japan was Malaysia's third largest export market last year and was Malaysia's second largest import source.

 

Major exports to Japan are liquefied natural gas, electrical and electronic appliances, wood products, chemicals and chemical-based products, optical and scientific equipment.

 

Malaysia's major imports from Japan are electrical and electronic products, machinery, appliances and parts, metal fabricated products, transport equipment, iron and steel products.