Mr Lim Hng Kiang at the Seminar on Business Opportunities in Malaysia

Opening address by Mr Lim Hng Kiang, Minister for Trade and Industry, at the Seminar on Business Opportunities in Malaysia, 29 August 2006, 10.15 am at Raffles Ballroom, Raffles City Convention Centre

“SINGAPORE AND MALAYSIA – CREATING A WIN-WIN PARTNERSHIP” 

Your Excellency Dato’ Seri Rafidah Aziz, Malaysian Minister of International Trade and Industry

Distinguished Guests, 

Ladies and Gentlemen,

Introduction

It is my pleasure to join Minister Rafidah and all of you at this seminar on “Business Opportunities in Malaysia”.

All Eyes on Malaysia’s Development Plans

Earlier this year, all eyes were on Malaysia as the government unveiled the 9th Malaysia Plan (9MP), which in the words of PM Abdullah Badawi, is “one of the most significant Malaysia Plans in [the] country’s history, as the nation is currently at the mid-point of the journey towards the year 2020”.

Malaysia clearly recognises the stiff competition for investment and job opportunities from China, India, and other Asian developing countries.One of the key thrusts of the 9MP is therefore to sustain Malaysia’s manufacturing and services sectors as a major source of growth.

Singapore is in the same boat.We must therefore work together with our neighbours to deepen cooperation in ASEAN, and make Southeast Asia a vibrant region which investors cannot ignore.

Leveraging on the Malaysia-Singapore Relationship in Both Manufacturing and Services

As two separate countries, Singapore and Malaysia pursue separate goals and have different approaches.This is a natural outcome of our different structures, systems and beliefs.But at the same time, we share many similar goals and interests.

As we advance our respective national interests, competition is inevitable.But if we choose to focus only on the competitive aspects of our relationship, we will surely overlook the many opportunities where we can join hands to enhance our value proposition to the world’s investors.Two broad areas we can cooperate in are the manufacturing and services sectors.

The manufacturing sector continues to play an important role in both our countries’ economies.Last year, the sector accounted for 31.4% of Malaysia’s total GDP.In Singapore, the manufacturing sector grew by 9.3% and contributed 27.3% to our GDP.

Investments by Multinational Corporations (MNCs) in both our countries have led to the strong manufacturing linkages, particularly in the electrical and electronics industry.Electrical and electronics products and machinery account for almost 60% of Malaysia’s total trade with Singapore.I believe that the scope of our linkages could be widened to cover other industries, so that Singapore and Malaysia can be viewed as a single entity in the global supply chain.

In addition, Singapore and Malaysia can, through outsourcing and reverse investments in each other’s economies, complement each other’s strengths as production bases for the global market.

The services sector is yet another area that both countries are actively promoting.Last year, the services sector was the fastest growing sector in Malaysia, with a growth rate of 6.5%, contributing to just over half (50.5%) of Malaysia’s total GDP.In comparison, Singapore’s services sector grew by 6% and contributed 63.8% of Singapore’s total GDP.

One main focus of the Malaysian services sector is tourism.Singapore and Malaysia have a long history of tourism collaboration.We can build on our existing cooperation, harness our comparative advantages in different aspects of tourism and jointly market ourselves as a tourism hotspot.For example, Singapore’s strengths in Business Travel, Meetings, Incentive Travel, Conventions and Exhibitions or BTMICE can complement Malaysia’s strategy to develop eco- and agro-tourism, and expose tourists to the varied offerings that both countries have to offer.

Besides tourism, the Islamic financial sector is another area that offers potential for collaboration between Singaporean and Malaysian companies.Islamic finance has a current market size of around US$300 billion internationally and is growing rapidly at about 15% per annum.Strong performance of the Middle East economies, high energy prices and rapid financial innovation has set the stage for Islamic finance to grow and flourish.Our central banks and financial institutions can learn from and work closely with one another, to collaborate on development initiatives and adopt appropriate supervisory practices.

Augmenting Singapore – Johor Synergies

One of the key components of the 9MP is the South Johor Economic Region (SJER).The Plans are to transform Johor into an engine of growth that will attract foreign investments and drive Malaysia's development, much in the way Shenzhen and Hong Kong boosted China’s economy.

There will of course be competition between Johor and Singapore, but we should also not forget the potential SJER has in augmenting the existing synergies between Singapore and Johor.

Given our close geographical proximity, it is not surprising that more than half of Singapore’s S$1.3 billion investments in Malaysia in 2005 are located in Johor.In fact, many companies view the Johor-Singapore combination as the most competitive location for manufacturing and distribution activities, more so than even locations in China.The SJER will only serve to strengthen and enhance this winning partnership. 

In fact, our companies are already looking at ways to create a win-win partnership in SJER projects.One notable example is the Tanah Sutera Development Sdn Bhd, a consortium of prominent Malaysian and Singaporean companies including Lee Rubber Co Pte Ltd, Pelangi Bhd, Keppel Land Ltd and CapitaLand Ltd, which is developing the 323-acre Taman Sutera and 1000-acre Taman Sutera Utama, both within the SJER.

Conclusion

A change in mindset is crucial so that we can face up to the intense competition for investment and job opportunities.Our enterprises must first realize that it is not a zero-sum game.Instead, the whole can be greater than the sum of its parts.

Our companies will then be on the active look-out for the sizable range of cooperation opportunities that exist, and waste no time in engaging each other to explore the viability of these opportunities.I am confident that we can seize the opportunities together

With that, let me end by wishing all participants a very interesting and fruitful Seminar.

Thank you.