Mr Lim Hng Kiang at the Seminar on Business Opportunities in Malaysia, 5 Aug 2010

Seminar on BUSINESS OPPORTUNITIES IN MALAYSIA OPENING ADDRESS BY MINISTER (T&I)

“Singapore And Malaysia: Fostering Synergies, Enhancing Competitiveness”

His Excellency Dato’ Mustapa Mohamed, Minister of International Trade and Industry, Malaysia

Mr Tony Chew, Chairman of Singapore Business Federation,

Distinguished Guests,

Ladies and Gentlemen,

Introduction

I am very pleased to join you at today’s seminar on “Business Opportunities in Malaysia”.Let me begin by extending a warm welcome to Minister Mustapa and his delegation to Singapore.

This seminar is a staple feature in the annual calendar of events for our two business communities.It has proven to be a key platform for renewing friendships, deepening networks and making new contacts to explore business opportunities.And it continues to receive strong support from both governments. Minister Mustapa himself has made it a point to personally grace this event each year.

Malaysia: Recovery and the next economic phase

Malaysia has recovered strongly from the recent global economic downturn, posting an impressive 10.1% year-on-year growth rate in the first quarter of 2010.This was Malaysia’s fastest pace of quarterly growth in ten years, and its full-year economic growth for 2010 is on track to reach 6%.

Recently, IMD’s World Competitiveness Yearbook 2010 ranked Malaysia among the top ten most competitive economies in the world. This is a jump of eight notches from its previous 18th position in 2009.It is a clear indication of Malaysia’s efforts to foster a business-friendly environment.

Earlier this year, Prime Minister Najib Razak announced the New Economic Model, or NEM, which lays out the framework for Malaysia’s approach to become a developed economy by 2020. Complementing this, the 10th Malaysian Plan (10MP) fleshes out Malaysia’s developmental plans for the period 2011 – 2015. This signals Malaysia’s firm determination to prepare its economy for a bright future, and I wish Malaysia every success in this endeavour.

Fostering synergies between Malaysia and Singapore

Malaysia has consistently ranked as one of Singapore’s top trading partners. Indeed, business linkages between our two countries have traditionally been strong and are set to grow even stronger. In the first six months of this year, bilateral trade rebounded strongly in tandem with the global economic recovery to reach S$52 billion. This is an increase of almost 36% over the same period last year. Investment linkages are similarly robust. According to the Malaysian Investment Development Authority, Singapore was the largest investor in Malaysia for the first four months of 2010, contributing RM 1.79 billion worth of manufacturing-related investments.

In this regard, I would like to encourage businesses in Singapore to seize the opportunity to explore and seek out business prospects that will play to the natural synergies between Malaysia and Singapore. Tap on the strengths and resources in each country to enhance your company’s products, services and ultimately, your competitiveness. Companies could for example, explore the possibility of integrating value chain processes across Malaysia and Singapore and thereby profit from the comparative advantages offered in our two countries. As the Malaysian economy grows and develops, businesses can also expand the scope and scale of your services to serve the Malaysian market. The possibilities are manifold.

The Singapore Business Federation for one has recognized the strong business potential. It led a business mission to Iskandar Malaysia earlier this year.The mission generated keen interest, with representatives from various sectors such as manufacturing and engineering, transport and logistics, food services and furniture. If the business costs are competitively priced, Iskandar’s close proximity to Singapore will offer a compelling value proposition over many other investment destinations. Businessmen and company managers on both sides will find it convenient to just drive across the Causeway or Second Link to see to their operations, meet their clients or liaise with business partners and all done within a day. This will be particularly attractive for SMEs in the nascent phases of expansion, as they can maximise limited management resources across both locations.

Indeed, there are clear benefits in continuing to strengthen synergies between Malaysia and Singapore. First, both countries stand to gain from the increased growth opportunities and business activity.Second, companies’ chances of success are bolstered by the natural comfort they enjoy in navigating the familiar operating environment in both locations. This unique familiarity results from the long-standing ties forged through close people-to-people links. With the warm and cordial tone underscored by PM Najib and PM Lee after their recent retreat in May this year, both countries should keep up the positive momentum and take our relationship to the next level.

ASEAN’s Economic Integration

On the regional front, I would like to urge businesses to consider opportunities in the context of ASEAN economic integration. Collectively, ASEAN represents a market of over 550 million people, with a total trade of US$1.6 trillion. ASEAN aims to achieve in 2015 the ASEAN Economic Community, or AEC, where the free flow of goods, services and investment will lead to a more integrated and vibrant region. Apart from enhancing ASEAN’s overall attractiveness to investors, the AEC is expected to inject further dynamism into Asia’s growth.

Companies should draw on the complementary strengths between Malaysia and Singapore to develop business propositions that ride on ASEAN’s growth and cater to its sizeable market. Furthermore, economic synergies between Malaysia and Singapore can serve as a stepping stone towards ASEAN integration. We can replicate the success stories between our two countries and provide an early template for companies to tap into cost-competitive resources across the whole of ASEAN.

Conclusion

As the world economy continues to recover, both Singapore and Malaysia must accelerate our efforts to make the synergies of doing business in our two countries even more competitive. Our inter-connectedness, in terms of geographical proximity, established business relations, and familiarity with investing and operating in each other’s country, is a comparative advantage for collaboration that can and indeed, should be exploited for mutual benefit.

On this note, I wish you a productive time of networking at today’s seminar. Thank you.