The open and transparent trade regime adopted by Malaysia had resulted in greater economic expansion and trade growth in the last decade. With a population of less than 25 million people, Malaysia was ranked as one of the top 20 trading nations of the world by World Trade Organisation (WTO) in its 2003 Annual Report. It is also the 18th largest exporter in the world. Over the last decade, Malaysia's global trade expanded more than two-folds from RM310 billion (USD81.6 billion) in 1994 to RM717 billion (USD188.7 billion) in 2003. Its major trading partners include ASEAN, USA, Japan, China and Hong Kong.
Malaysia's economy today is very much an export-driven spurred on by high technology, knowledge-based and capital-intensive industries. Malaysia today trades with more than 230 countries worldwide.
Strong and resilient export performance
Malaysia together with other Asian countries emerged as the fastest growing region in merchandise trade in 2003. Its trade performance has remained strong and resilient despite the global uncertainties in the economy which was affected by the Iraq war and the severe acute respiratory syndrome (SARS) outbreak in 2001 and 2002.
In terms of exports, Malaysia's performance surpassed US$100 billion mark for the first time in 2003. Exports grew by 11.6 per cent in 2003 to US$105 billion, of which almost 80 per cent were manufactured goods. This sector has been the major driving force behind Malaysia's export success over the last twenty years. The double digit export growth last year is a reflection of Malaysia's continuous buoyant performance in tandem with the recovery of the economies of major trading partners. All exports sectors to almost all markets had registered increases in 2003.
Malaysia's exports of E&E products have progressed up the value chain from mass assembly in the 1980s with enhancements in quality and technology content. Today, Malaysia has the capabilities of not only to make and export integrated circuits but to manufacture test and measurement instruments of sophisticated capacity. Designs of chips for the electronic industry are also partially done domestically.
Apart from E&E, Malaysia exports a diverse and growing array of other manufactured goods such as chemical and chemical products, optical and scientific equipment, wood products, rubber-based products and processed food. Malaysia is also a major exporter of agriculture and petroleum-based products.
ASEAN continued to be the top export destination and one of the leading sources of imports for Malaysia. The region accounted for 24.8 per cent of Malaysia's total exports and 24.1 per cent of total imports in 2003. While Singapore remained as the main export destination in ASEAN, significant export growth was also recorded in 2003 to almost all other ASEAN markets, in particular, Thailand, Indonesia and the Philippines.
Major gateway to penetrate the ASEAN markets
Capitalizing on its strategic location in the heart of South East Asia, Malaysia positioned itself as the major gateway for foreign countries to penetrate the ASEAN markets of over 500 million population, under the ASEAN Free Trade Agreement (AFTA). Malaysia also offers highly developed world-class communication facilities and transport infrastructure as well as logistics networks that are among the best in Asia. Malaysia's air and seaports are equipped with modern and high-tech facilities and equipment for full range of cargo handling, offering fast, reliable, efficient and competitive services.
Malaysia continued to expand its exports to traditional markets such as USA, Japan and Western Europe while diversifying and making further inroads in new and emerging markets of West Asia, Africa, Latin America and Eastern Europe.
North East Asia was the fastest growing export destination for Malaysia, having grown at an average rate of over 12 per cent in the last decade. Within the region, China has emerged as an important export market for Malaysia, due to the expanding industrial demand and enhanced domestic consumption in the country. Malaysia is also China's leading trade partner among the ASEAN countries.
Rising trends in Malaysia's exports are also seen to West Asia countries. Malaysia's special political and economic relations with the West Asia nations through international organisations such as Organisation of Islamic Conference (OIC) and Non-Aligned Movement (NAM) have supported the growth of exports to this region.
As an Islamic country, Malaysia continues to capitalise on the export of "Halal" products. Malaysia's expertise in this area is globally recognised when the United Nations' Codex Alimentarius Commission, responsible for introducing the Joint FAO/WHO Food Standards Programme cited Malaysia as the best global example where "Halal" food is concerned. Malaysia's knowledge and capability in this area is now being exported to other countries that have similar requirements.
The export of services is assuming growing importance in Malaysia's external trade. Malaysia has proven its capabilities in the exports of services in the areas of education, construction, healthcare, franchising, printing, IT and services for oil and gas industry. In the construction services, Malaysian contractors have secured over 223 projects overseas worth USD4.9 billion. Among the major projects were the construction of Formula One Race Circuit in Bahrain, construction of higher institution and highways in the Middle East. While in the healthcare sector, the number of foreign patients from Australia, Japan, Korea, China, USA, Taiwan, Middle East and South East Asian countries seeking medical treatment in Malaysia have increased in 2003 to reach 102,946 patients.
An important hub for various areas
Malaysia also aims to become the reputable centre for higher learning. In 2003, more than 25,000 foreign students were enrolled in Malaysia's higher education institutions which offer degrees in various fields of studies, including twinning programmes with well-known universities.
In the area of shared services, Malaysia is becoming an important hub for call centers, data centers and back office operations. It is ranked as the third most attractive destination for shared services and outsourcing activities by A.T. Kearney, a US-based consulting firm. Malaysia has leveraged on the rapid developments within the telecommunications industry, to provide high quality, reliable and competitive communication services to support the shared services sector. Malaysia's skilled manpower, coupled with multi-racial society with multi-lingual capabilities, further strengthened its competitive edge in this area.
Malaysia has a strong track record for hosting highly successful international events. These include the 16th Commonwealth Games in 1998, the yearly Formula One Car Race and Malaysia International Furniture Fair, and the Non-Aligned Movement Summit as well as OIC Summit in 2003. Equipped with well established facilities such as convention and exhibition centers, excellent organisation skills and capabilities in managing world-class events, and easy accessibility from most parts of the world have made Malaysia an ideal location for hosting meetings, conventions and exhibitions.
Over the years, Malaysia had gained recognition as an exporter of high quality products which complied with international standards for health, safety and environment. Malaysia has also positioned itself as a reliable global supplier of competitively priced and well designed products and services. Timely delivery is also an attribute of good performance by Malaysian exporters. Several Malaysian brand names have carved a mark in the global marketplace such as Malaysia Airlines, Petronas, Proton, Sime Tyres, Royal Selangor, Bonia and Khind. Malaysia provides a conducive and competitive trading environment to the foreign business communities intending to source for products and services. According to the World Competitiveness Yearbook 2003, Malaysia was ranked as the fourth most competitive nation in the world among countries with a population exceeding 20 million in terms of economic performance, government efficiency and infrastructure. This is a major improvement in the country's competitiveness ranking from its 10th position in 2001 and 6th position in 2002.
MATRADE assumes a great role
To expand worldwide coverage of its products and services, Malaysia External Trade Development Corporation (MATRADE), a trade promotion agency under the Ministry of International Trade and Industry, assumes a greater role to bring Malaysia's exports to greater heights in coming years. With a network of 24 offices in major cities around the globe and equipped with the proactive strategies, MATRADE aspires to increase Malaysia's exports to the world through numerous export promotion activities.
MATRADE is the focal point for international companies seeking to source for products and services from Malaysia. Foreign businessmen can either deal directly with the head office in Kuala Lumpur or through its network of international offices overseas located in major cities in Asia, Australia, Europe and America. MATRADE provides the international business community with reliable trade and business leads as well as advisory services in sourcing for Malaysian products and services. Linked by an increasingly efficient information management system, MATRADE is able to respond quickly to meet the information needs of international business.
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