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

OPENING ADDRESS BY MINISTER (T&I) LIM HNG KIANG AT THE SEMINAR ON BUSINESS OPPORTUNITIES IN MALAYSIA, TUESDAY, 12 AUGUST 2008

“Singapore And Malaysia: A Winning Partnership In ASEAN“

Your Excellency Tan Sri Muhyiddin Yassin, Minister of International Trade and Industry,

Distinguished Guests,

Ladies and Gentlemen

Introduction

I am very pleased to be able to join Minister Muhyiddin and all of you at this seminar on “Business Opportunities in Malaysia”.Let me begin by extending a very warm welcome to Minister Muhyiddin on his first official working visit to Singapore.

This annual seminar plays an important role in promoting closer economic relations between our two countries. It is very useful to our businesses and this is evident in the strong participation we see year after year.I am glad to see that this is again the case for this year.The high turnout reinforces the assessment that there is huge potential for business opportunities and investments in our two countries.

Malaysia’s Economy Outlook Remains Optimistic

That is not surprising, since Malaysia’s economy has performed consistently well.Last year, overall growth was 6.3 per cent, and trade exceeded RM1 trillion for the second year running to reach RM1.11 trillion, an increase of almost 4 per cent over the previous year.

Despite the global economic slowdown which started about a year ago, the Malaysian economy has registered strong performance in the first quarter of this year.First quarter GDP growth was 7.1 per cent, bolstered by expansion from all major sectors of the economy.More importantly, the economy is expected to perform favourably for the rest of the year. The latest report from the Economist Intelligence Unit[1] forecasts an overall growth of 6 per cent for 2008, which is a sterling performance, given the global economic uncertainty.

The positive outlook of the Malaysian economy is a reflection of its resilience and strong fundamentals, and the committed efforts of the Malaysian government to continuously review and implement new pro-business measures. These efforts have shown results. For example, Malaysia moved up four spots to 19th spot in the World Competitiveness Yearbook 2008 published by the International Institute for Management Development; while the ranking on Malaysia’s government efficiency improved by two spots to 19th.

There has also been no let-up in major existing economic development plans such as the 9th Malaysian Plan and the various development corridors. In fact, Malaysia and Singapore held our 3rd Joint Ministerial Committee on Iskandar Malaysia just two weeks ago.

Projects like Iskandar Malaysia are strategic in nature, and bring long term economic benefits not only to Malaysia but also to the region.I am thus heartened and encouraged by the Malaysian government’s commitment to sustain these key projects in these challenging times.This is welcome news to businesses and investors looking to Malaysia.

Our Growing Business-to-Business Connections

Business linkages between our two countries are ever growing.Malaysia has consistently topped the list as Singapore’s top trading partner, and last year was no exception. Total trade for the first six months of this year stood at S$57.9 billion – an increase of 11 per cent over the same period last year.

According to the Malaysian Industrial Development Authority (MIDA), Singapore was the third largest investor in Malaysia for the first five months of 2008, contributing RM726 million worth of approved manufacturing-related investments. Singapore’s investments are not only in manufacturing, but also in services.For instance, last month MapleTree announced a S$60 million investment in a 10-hectare logistics park in Shah Alam. Singapore SMEs are also making their presence felt in Malaysia – our homegrown Polar Puffs & Cakes set up its first overseas confectionary outlet in KL last September.And in May this year, Apex-Pal, manager of the Sakae Sushi chain of restaurants in Singapore, expanded their presence in Malaysia from 9 to 13 outlets.

The business linkages are therefore not confined to the big companies but extend to the SMEs.I understand that this year alone, MATRADE will be organising some 30 capacity-building seminars to help Malaysian companies, especially the SMEs, to reach out overseas.

I urge Malaysian and Singaporean SMEs to not only explore business collaborations with each other, but to also consider Malaysia and Singapore to be your first launch pad, before moving on to the region and the world.The reason is simple.Our people share a unique understanding of each other, forged by both countries’ close and long-standing historical and cultural ties.With a better understanding of the market, there is a higher chance of success.This is a distinct and unique advantage that Malaysia and Singapore offer to any Malaysian and Singaporean SME looking for its first foray overseas.

Our business-to-business links complement each other very well.Let me give an example from the tourism industry. In 2007, Singapore and Malaysia leveraged on our national days in August to promote youth tourism between the two countries. Both countries worked with their tourism attractions to offer promotional rates to youths of the each country.The close proximity of our two countries also allows us to enjoy spillover effects from each other.For example, I understand that the Singapore Formula One season is bringing cheer to hotels and travel agents in Johor[2], just as Genting’s investment in Resorts World at Sentosa will bring greater tourist flows between both countries once completed in 2010.

Our tourism cooperation is not limited to our reciprocal tourism flows. In important source markets like the US, the tourism offices of both Malaysia and Singapore mount joint marketing campaigns. These are designed to attract tourists to visit both countries at one go.These campaigns leverage on the complementary tourism offerings of Singapore & Malaysia.

Malaysia and Singapore – A Winning Partnership in ASEAN

The Malaysia-Singapore combination is widely recognised as a winning partnership by international investors.Many businesses are already functioning as though Malaysia and Singapore are one economic space, with no borders. The Malaysia-Singapore partnership offers one of the most competitive economic spaces for a variety of business activities, especially in sectors such as manufacturing and distribution.

Businesses from both countries recognise that the Malaysia-Singapore partnership is not a zero-sum game.I believe that this partnership can leverage on another value proposition: that both countries have a pivotal role to play in realising the Blueprint for the ASEAN Economic Community (AEC).

Malaysia and Singapore are key partners in ASEAN.Bilateral trade between our two countries accounts for around a fifth of total intra-ASEAN trade in 2006[3]. We are therefore in the position to take the lead to spur greater economic integration as laid out in the AEC Blueprint to create an attractive market for the world.

Conclusion

Singapore-Malaysia economic linkages have been traditionally strong.The private sector, ranging from large corporations and increasingly, also the SMEs, has been leading the charge towards greater economic interactions and interdependence.I encourage you to continue doing so.

Investors and companies from both countries should leverage on each other’s strengths, so as to forge winning partnerships and treat both countries as one economic space with benefits spilling across both ways.Our partnership can serve as a template for economic integration towards the ASEAN Economic Community and benefit from ASEAN’s economic integration.

Thank you, and I wish you a productive afternoon of networking and business.

[1] July 08 EIU report.

[2]Business Times, 28 July 08. Singapore F1 a boon for hotels – in Johor

[3]Based on latest available figures from ASEAN Secretariat website.