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Dato’ Azman Mahmud

MALAYSIA - Economy

On The Right Track



Dato’ Azman Mahmud was appointed CEO of MIDA in 2014. He holds a degree in Engineering from Universiti Putra Malaysia and has attended several senior management programs, namely the Harvard Business School and INSEAD. He has spent 25 years with MIDA in various leadership positions in the US, Japan, and Malaysia covering promotion strategy and manufacturing and services growth, where he played a significant role in promoting investments into Malaysia.

"Over the years, we have been doing business with many countries."

What do you identify as the key factors that make Malaysia an attractive destination for foreign investors?

Firstly let us consider the ease of doing business in Malaysia. The infrastructure is well developed. We started with the manufacturing sector about 40-50 years ago, and over the years we have invested a lot in physical infrastructure such as ports, roads, and telecommunications because connectivity is very important. You need to have all this in place so that the companies that manufacture goods will have easy access to the markets from Malaysia. Number two is education in Malaysia. English is taught from standard one, so communication for international companies doing business in Malaysia is very easy. You will not find any difficulty travelling anywhere in the country; people will understand you. Another is political stability—our government is a parliamentary democracy. The rule of law is based on British common law, so that is another great advantage. That is the base upon which this country is founded. The government has introduced many initiatives, such as the Economic Transformation Programme (ETP) and Government Transformation Programme (GTP). Even the collaboration between the government and the private sector makes the ease of business meaningful. The private sector and government work together and analyze what helps businesses to grow. Those are a few areas we can highlight. Of course, the location is also vital. The strategy in this region, with Malaysia chairing ASEAN 2015, is to move us to the next level. Within ASEAN, we are already a free trade area. Malaysia has signed free trade agreements (FTAs) with many countries. The framework is already in place. Market access from Malaysia is easy with all this in place.

To what do you attribute Malaysia’s continued success?

We want to continue to grow by strengthening the business environment, and improving the atmosphere for business. We are introducing new policies and fine-tuning old policies so that things will get better. Moving forward, to be competitive, we feel that we have to move up the value chain. Malaysia started as an agriculture-based economy, but over the years we have become more knowledge based with more R&D activities in the manufacturing sector. Any economy can not be too dependent on manufacturing or one specific area, so we have also been mandated to promote the services sector as well which, among other sectors, includes healthcare, tourism, ICT, and many more.

“Over the years, we have been doing business with many countries.”

What are you doing to boost domestic investments?

Domestic and foreign investments co-exist. We are giving equal emphasis to both of them because we want to strengthen the eco-system, not only the supply chain but also the infrastructure, rules and regulations, trade agreements, investment agreements, and so forth. A strong supply chain is also important as you need to have strong domestic supporting industries for foreign investment to come. If they want to make goods, Malaysia has many supporting industries that can help them manufacture.

How will increased integration between ASEAN nations make Malaysia and the region more attractive for investors?

Over the years, we have been doing business with many countries. We have about 8,000 multinational or foreign companies doing business in Malaysia. We cannot be alone. That’s why we need each other in ASEAN. Moving forward, I think Malaysia and the rest of ASEAN need to invest in each other to increase trade and linkages. The ecosystem is within Malaysia, but you can extend it to ASEAN to make it more vibrant and access more opportunities. If investors are already in Malaysia, they can invest in ASEAN, and vice versa. We have a lot of intra-ASEAN activities, so it will be more exciting. Each country has its own competitive advantage. I believe ASEAN has its own competitive advantages as well. Businessmen will look for opportunities everywhere. If there is competition, that is good, but Malaysia has its own strengths and there are a lot of opportunities behind that strength.

Can you give us examples of some public—private partnerships (PPPs) here?

Many years ago, Malaysia introduced a privatized infrastructure projects. For example, look at our highways. You can see how Malaysia has transformed. Our government provided the facilitation and the private sector played its role by investing in and operating the highways. Now people can travel and businesses can send goods all over the country. It’s the same with other infrastructure like ports and so on. It has transformed Malaysia tremendously. We are on the right track.

In terms of the Domestic Investment Strategic Fund, what has been achieved so far?

We are doing well in that area. It is designed to encourage Malaysian companies to acquire new technology and venture into R&D, acquiring new skills for their operations and providing capacity building. We started this a few years ago and we are seeing some results in their abilities to service multinationals. Once you have the capacity and know-how to bring your advantages to the next few levels, then you will attract interest from multinationals.

What are MIDA’s priorities between now and 2020?

We will continue what we are doing, but perhaps encouraging more R&D activities. Our priorities will be looking at getting more quality investments to come to Malaysia, meaning those investments with knowledge, technology, and R&D components. Of course, we also emphasize the services sector. There is a lot of room for growth there because manufacturing is already quite developed in Malaysia, so you need a strong services sector to support that. There are many opportunities in ASEAN that many companies can tap into, leveraging on Malaysia because the cost of doing business here is much more competitive compared to Singapore, and the ease of doing business is good.

What is your vision for post 2020?

The long-term plan is still there. Beyond 2020 in general, Malaysia wants to be a developed country and we want to encourage inclusive economic development within the country, expanding activities to all regions as well as increasing our per capita income to a higher level. That will be the direction we move in. We have the 11th Malaysia Plan, an aerospace plan, a shipbuilding plan, and many others. This will keep us on track so that we can move to the next level.

© The Business Year – April 2015



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