A GOLDEN CELEBRATION FOR A FAST GROWING ECONOMY
This article was published in World Eyes Report, The Japanese Times

As palm oil is being developed for an increasing number of uses, the future of the industry
grows brighter. Malaysia is the world’s largest producer of palm oil.

The country is swiftly continuing on the fast track toward its goal of becoming a fully industrialized nation by 2020.

A decade after the Asian financial crisis, the economy is surging. Its GDP grew 6 percent last year to about $69.1 billion, and the economic climate has remained positive due to increased foreign investment, an expansion in exports, record trade growth and further diversification of the market.

During the past 10 years, overall trade has more than doubled to make Malaysia the world’s 18th-leading exporter and 20th-leading importer. While palm oil remains the country’s second-biggest
source of export revenue, Malaysia has also become one of the world’s leading manufacturers of audio and video products, semiconductor devices, and electronic and electrical (E&E) products.

The manufacturing sector contributed a whopping 78. 5 percent to total trade, making up more than one-third of the country’s GDP.

The Ninth Malaysia Plan (9MP), established in October 2006, serves as a five-year blueprint for the country’s economic development.

‘‘The government is making great strides to try and sustain Malaysia’s cost-competitive environment, and increase efforts to promote investments in value-added and capital-intensive industries,’’ says Dato’ Yusli Mohamed Yusoff, CEO of the Malaysian stock exchange.

Amid the robust growth, the country also faces stiff competition from emerging markets such as Vietnam, China and India to attract foreign direct investment.

Recently, Prime Minister Datuk Seri Abdullah Ahmad Badawi set up a 23-member task force whose main objective is to ensure that Malaysia keeps its competitive edge over neighboring markets. ‘‘Through Malaysia’s active involvement within the framework of regional cooperation in the Asian region, our foreign policy remains important to our national development as well as to the growth of the Asian region,’’ says Foreign Minister Dato’ Seri Syed Hamid Albar.

Malaysia is staying ahead of the game by attracting investors with world-class infrastructure, government incentives and most importantly, its abundance of possibilities.

‘‘This year’s ‘Invest Malaysia’ conference will provide a credible and sound platform to showcase the best of what the Malaysian capital market and securities industry have to offer international fund managers and institutional investors,’’ says Yusoff.

Aug. 31, 2007, does not signify only Malaysia’s independence, it also mark’s 50 years of diplomatic relations between Japan and Malaysia, two nations that have carefully nurtured their diplomatic ties and economic cooperation.

Roughly, 1,250 Japanese companies are operating in Malaysia. Of these, about half are in the manufacturing sector, producing mostly electronics, components, and auto parts and assembly. Since the signing of the Japan Malaysia Economic Partnership Agreement (JMEPA) in 2005, trade between the two nations has increased sharply, with double-digit growth seen in imports and exports.

‘‘I firmly believe that the JMEPA will bring maximum benefits to both countries. We are beginning to see the positive effects as last year Japan emerged as the largest source of foreign investment for Malaysia,’’ says Tadashi Imai, Japan’s ambassador to Malaysia.

According to the Japanese Embassy, the surge in FDI reflects the high level of confidence that Japanese business has in Malaysia. Embassy figures show that FDI in the third quarter of 2006 jumped to ¥203 billion, five times higher than the first and second quarters combined.

‘‘The biggest advantages for Japanese companies operating here are that most Malaysians speak English, and there is political stability and a geographic advantage,’’ says Tsuneo Tanaka, managing director of the Japan External Trade Organization.

With demand for alternative fuel sources, like palm oil, increasing worldwide, there’s certainly room for future collaboration between Japan and Malaysia. ‘‘Japan would like to build an even closer relationship with ASEAN countries with a view to building an open, energetic and innovative East Asia. In this context, Malaysia plays an important role as one of the most dynamic country’s among ASEAN nations,’’ says Imai.