Presentation for Fukuoka Dialogue

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Hong Kong
Japan
USA
Taipei
Bangkok
Europe
KL
Medan
Singapore
Passenger
Jakarta
Freight

• 2nd smallest state (398.1 sq. miles)
• 2nd most urbanized state (pop 1.2m)
• 2nd largest airport seaport
• 2nd most industrialised state (45 of GDP)

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MALAYSIA ROBUST EXPORT GROWTH (1970-2000)
Share of Exports
Value of Exports (USD Billion)
2000
1990
1980
1970
2000
1990
1980
6.1
22.3
39.7
56.8
6.0
6.6
5.0
Agriculture (rubber, palmoil, timber)
7.2
18.3
33.3
22.8
7.1
5.4
4.2
Minerals (tin, petroleum, LNG)
85.2
58.8
22.3
11.1
83.7
17.3
2.9
Manufacturing
61.7
33.3
10.7
n.a
60.7
9.8
1.4
E E
23.5
25.5
11.6
n.a
23.0
7.5
1.5
Others manuf.
1.5
0.6
4.7
9.3
1.4
0.2
0.6
Others
100
100
100
100
98.2
29.5
12.7
TOTAL
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ECONOMIC TRANSFORMATION OF PENANG
1970 - 2000
Agriculture 19.7 3.2 2.4 Manufacturing 1
2.7 43.0 45.3 Construction 5.8 3.2
2.4 Trade/Services 61.8 50.6 49.8 GDP
VALUE (RM) 1.25 B 7.88 B 17.09 B
1970 1990 2000f
US 1.00 RM 3.80
1980-1989 1990-1996 1997 1998 1999
2000 GROWTH RATES 7.8 10.5 7.8 -4.2 6
.3 6.7
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INDUSTRIAL AND TECHNOLOGICAL TRANSFORMATION
1990 - 2000
1990-2000 Increase
KEY INDICATORS 1970 1990 2000
(A) No. of Factories 31 430 694 61
(in PDC Industrial Parks)
(B) Employment 3,000 100,953 194,533 93 (C)
Paid-Up Capital (RM) - 1.1B 7.3B 564
Pre- crisis (Dec. 97) (A) 747 (B)
192,011 (C) 6.2B
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PENANGS MANUFACTURING SECTOR PROFILE
INDUSTRY NO. OF PAID - UP EMPLOYMENT
TYPE FACTORIES CAPITAL (RM MILLIO
N)

Electronics / Electrical 152 3,100.6 117,841
Metal 168 1,321.5 17,908 Plastic
77 213.1 9,395 Paper / Printing 63 795.7 5,733
Chemical / Fertiliser 53 707.3 4,500 Machinery
39 33.9 2,020 Food 29 96.9 2,982 Textile / Garm
ents 23 363.4 13,186 Rubber-Based 19 94.8 5,520
Others (wood, feed meals, 71 581.1 15,448 equipm
ent, optical, agricultural) Total 694 7,308.
3 194,533
(as at Dec., 2001)
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INVESTMENT BY COUNTRY
NO. OF NO. OF PAID-UP
FACTORIES JOBS CAPITAL
(RM Mill.)
LOCAL 386 48,959 2,439.5
JOINT VENTURE 88 2,557 839.2 JAPAN 58 24,131 1,51
1.0 USA 35 52,870 959.1 TAIWAN 62 15,711 752.7
SINGAPORE 23 6,985 181.5 GERMANY 11 9,967 171.2
HONG KONG, CHINA 4 3,399 99.9 UNITED
KINGDOM 4 3,071 30.0 OTHERS 23 26,883 324.2 TO
TAL 694 194,533 7,308.3
(as at Dec.,, 2000)
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MALAYSIA HOME TO MNCs, BUILDING NICHES IN
GLOBAL ICT MARKET
Microprocessers Intel
AMD Global Market 78 18 Mad
e in
Msia 45 100 Msia of Global 36 18
Telco Motorola (walkie-talkie)
Ericsson (cell-phones)
Computer Dell (Asiapac centre)
Peripherals Acer,Seagate, Komag
Wireless Agilent, Minicircuits
Optos Cisco, Osram Design Altera (IC)
, Intel, Houses Motorola, etc Contract
Solectron, Jabil, Celestica Manuf. SCI, Fle
xtronics, Inventec
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SYNERGY FOR GLOBAL COMPETITION
MALAYSIA

• Institution
• Incentives
• Infrastructure

Federal Government MITI / MIDA, MOF
Example Of Penang State
(Msian Indus. Dev. Authority)

• Infra (Ind. Parks)
• Services
• HRD Promotion

Penang Development Corporation (PDC)
Local SMI / SME
MNCs Foreign Tech Firms

• Initiatives
• Ingenuity

Capital, Technology
Resourcefulness
GLOBAL MARKET
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INITIATIVE TO e-ENABLE SUPPLY CHAIN MANAGEMENT
FOR ICT SECTOR IN MALAYSIA
(for ICT sector)

• RosettaNet Malaysia launched in Jan 2002
• RNs 1st software engineering team outside US
• 5th in Asia ( Japan, Korea, Taiwan, Singapore)
• 7th in the world (US, EU)
• IT grant (US 26,000) per Msian firm to
  jump-start
  
• Double tax deduction for both MNCs Msian firm

Joint initiative by Fed, State (PDC),
Manufacturers Ass. (FMM), MIMOS (Microelectronics
Inst.) MNCs, SMIs Soln Providers
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QUALITY HR MALAYSIAN WORKFORCE
1. Productive, Versatile Resourceful
2. English Proficiency amongst engineering
technical workforce - real-time technology
transfer coordination 3. Multi-lingual Capabili
ty Multi-cultural Connections
Market China India
Muslim West ASEAN Total
Population 1.3 B 1.0 B
1.0 B 0.6 B 0.5 B 4.4 B
Able to reach 72 of the world total population
(6.1 B) 4. Good Work Ethics hardworking disci
plined 5. Major Drive on Education HR Developme
nt Univ. Sc/Tech Year 1990 1995 2000 Enrolmen
t Number 21,590 30,823 88,880
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SMART PARTNERSHIP IN SKILL TRAINING
PSDC (PENANG SKILLS DEVELOPMENT CENTRE)
COOPERATION SYNERGY
PSDC
PRIVATE SECTOR 96 MNCs LOCAL FIRMS
PUBLIC SECTOR
EQUIPMENT GRANTS ADMIN GRANT FREE PREMISES EXPE
RTISE/LECTURERS
ADVICE/SUPPORT
MEMBERSHIP SUBSCRIPTION IDENTIFY NEEDS/COURSES E
QUIPMENT LOAN/DONATION PROVIDE SENIOR ENGINEERS A
S LECTURERS
SPONSORS TRAINEES/FEES
3,787 Courses 73,939 Trainees (1989 2001)
CENTRE OF EXCELLENCE
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PARTNERING MALAYSIA FOR COMPET IT IVE EDGE
IN ICT (1)

• Building on comparative advantages
• The 3 Es Expertise, Experience
  Excellence
  
• The 3 Is Infra, Incentives Institutions
• HR Linguistic Capability Cultural
  Connections
  
• Long-established partnership with major MNCs
• Well-established vendor / supplier biz network
• Cost-competitiveness especially in niche areas

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PARTNERING MALAYSIA FOR COMPET IT IVE EDGE IN
ICT (2)

• Consolidating Existing Niches (since 1991)
• Moving into hi-end E E, ICT products
• Moving with technology more R D
• Enhancing e-Enabling Local Supply Chainthru
  Global Supplier Program (GSP) RosettaNet
  
• Building New Niches (since 1995)
• Wafer Fabs 3 with Sharp VLSI, local
  (MIMOS)
  
• Software Multimedia (MSC)
• Wireless Photonics products
• IC product / software design houses
• Biotech life sciences (rich bio-diversity)

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SYNERGIZING TOWARDS THE GLOBALIZED FUTURE (1)

• 1. Striving thriving on our own competitive
  niche areas through smart partnership

Govt
University
MNC
Industry
SMI

• 2. Leveraging on the potentials of ASEAN
• Big market workforce (525 million) (41 of
  China)
  
• Rich resources biodiversity synergy with ICT
  optos
  
• Emerging framework of AFTA (ASEAN Free Trade
  Area)

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SYNERGIZING TOWARDS THE GLOBALIZED FUTURE (2)

• 3. Forging synergetic smart partnership
  co-opetition with China
  
• Minimise head-on, all-out competition, esp. in
  labour- intensive, low-cost products services
  
• Work on areas of complementarity synergy
• China plus One (ASEAN/Malaysia) with US/EU
  more eggs in more than one
  baskets

Comparison on FDI (Foreign Direct Investment)
Demo-Econ Data
COUNTRY POPULATION GDP
GDP PERCAPITA FDI 97-00
(MILLION) (US B)
(US) (US B)
CHINA 1,273.1 1,080B
857 169.1B
MALAYSIA 23.3 54.6
B 2,459
18.2B (1.8)
(5.1) (287)
(10.7)