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An exclusive interview with the Malaysian Consul General Mr. Abu Bakar Mamat.

ER: Over the last 30 years, Malaysia has transformed from a less developed country to a role model of economic success which, according to the World Bank, can become a High Income Country. What key factors do you see behind this transformation?

Hard work and good governance are the two key factors behind this progress.

The Malaysian economy has been and is always on the move; from an agricultural-based economy to that of export-oriented economy spurred by high-tech and knowledge-based economy. After the global economic shock in the early 80s; US recession in 1981 and commodities price crash in 1985, Malaysia needed a very sound economic policy to stimulate investment. Therefore, the government embarked on a campaign to industrialize the country by putting in place very deliberate economic policies to attract local and foreign direct investment. The presence of many Fortune-500 and Forbes-2000 companies today is a direct result of the huge government incentives schemes.

Of significance is the chief architect of the Malaysian economy, Dr. Mahathir Mohamad. The former Prime Minister introduced Vision 2020 in 1991, an extensive strategy to propel Malaysia from a middle-income to a high-income nation.

The world is also facing economic uncertainties along the way. We need to ensure the continuation of strong economic performance to realize our aspiration to become a high-income nation. We need to jump-start our economic growth and bolster its competitiveness. To do this, we can't expect our economy to flourish across every sector. Malaysia needs a focused economy. In 2010, Prime Minister Dato' Sri Najib Tun Razak introduced the Economic Transformation Programme, which has deliverables in twelve areas of focus, which we call the National Key Economic Areas. The government also launched the Government Transformation Programme formulated to change the delivery of public services and aimed at strengthening the country's economic competitiveness.

ER: The Free Trade Agreement (FTA) between Pakistan and Malaysia was signed in 2008, the first among the OIC countries. In your opinion how has this furthered the bilateral trade?

The Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA) has now entered its fifth year of implementation and has an encouraging effect towards the bilateral trade volume. It has improved market access for over 5,900 items imported from Malaysia and nearly 10,000 items for Pakistan. It also helped stimulate competitiveness and innovation in both countries. Since the signing, the two-way trade surged to more than $2 billion annually, ranking Malaysia in the list of Pakistan's top ten largest trading partners. Malaysia is also one of the top importers of Pakistani products among the ASEAN countries. However, there still remain areas of untapped potential that both countries should explore whilst taking economic ties to a greater height.

ER: What are the areas which need to be explored further?

At the moment, opportunities under FTA are not fully utilized. One of the areas that both countries have identified is the vast prospect in Halal food and agribusiness industry. The increasing demand for quality Halal products offers better returns. As a strong global red meat producer, Pakistan's processed meat can be expanded further in the Malaysian market. Pakistan can also look into ways to increase its Basmati and Iri-6 rice export to Malaysia. Malaysia is willing to consider more imports from Pakistan if the rice suppliers are able to provide a highly competitive price. Last year, Pakistan's rice export amounted to $72 Million to Malaysia and currently is the third largest supplier in Malaysia with 16% market share. Malaysian buyers are also keen to import Pakistan's agri produce such as onion, potato, mango and raw rock salt.

Meanwhile, Malaysia has set the benchmark for the Halal food industry and as a major supplier of Halal processed food in the region, Malaysian companies are keen to export their products here.

ER: Where do you foresee the volume of trade, say in five years from now? And how can we address the trade imbalance that is tilted on the Malaysian side?

With the favorable policies in place, I have every reason to be optimistic that bilateral trade is set to grow double digit every year. We have witnessed that more efforts to promote Malaysian goods entering Pakistani market are bearing fruit and in a bid to address Pakistan's trade deficit with Malaysia, we are working closely with the local business community and TDAP representative in Kuala Lumpur. We have been assisting them to gain more access of Pakistani products in Malaysia.

ER: Do you find any industries or sectors in Pakistan which may be attractive for Malaysian investors?

Yes. We have a number of Malaysian firms active in areas such as infrastructure development, real estate, highway construction, power generation, financial services, palm oil refinery and telecommunication. I would like to see more opportunity for Malaysian investors to venture in textile and renewable energy. Pakistan's investment policy offers tremendous incentive packages coupled with liberal policy parameters. However, there is a need for constructive engagement in luring the interest of investors from Malaysia. Pakistan's economic wellbeing is at risk of slipping into a debt trap and the growing fiscal deficit may not help in luring foreign investors. I think Pakistan must address the concern over the deteriorating law and order in its commercial capital Karachi and find a workable remedy for the looming energy crisis. With improved and favorable investment climate in place, Pakistan is in the position to woo foreign investors' return.

ER: What sectors of Pakistan's economy can benefit from importing Malaysian products?

Palm oil and palm oil products are heavily imported in Pakistan. Nearly 70% of Malaysian export to Pakistan is from this sector, which translated to over $1.4 Billion trade value last year. Pakistan consumes some 3 Million tonnes of edible oil annually of which 90% is palm oil based. The growth in population and the expansion of domestic food industry has led to the growing intake of palm oil. Similarly, higher industrial demand for crude palm oil leads to a boost in import of Malaysian palm oil.

ER: What are the different industries in Malaysia which Pakistani investors may find attractive?

The major areas that foreign investors may find rewarding are the services sector followed by primary and manufacturing sectors. Within the services sector, we are looking at the real estate, transportation and tourism infrastructure. Primary sectors include agriculture, mining, plantation and commodities. Meanwhile, E&E, petroleum products and transportation equipment form the bulk of investment in the manufacturing. Riding high at the moment on the radar of international investors are opportunities offered at the Greater Kuala Lumpur and the Iskandar Malaysia economic region. Pakistani investors should explore the opportunities in these two "investment catchment area".

ER: Can you shed some light on the "Malaysia My Second Home" programme?

It is a programme initiated by the government to attract foreign retirees and expats by offering a, renewable 10-year stay visa. Participants can enjoy various privileges under this programme. MM2H has also been introduced to attract more investors--not only to come and live in the country but also to invest in the initial placement of fixed deposit in Malaysian banks and purchase of properties. Apart from finance and property, education and healthcare sectors are also enjoying the spillover effects as the MM2H participants enroll their children in the international schools and use the healthcare services available in the country.

With its multicultural background, dynamic lifestyle, politically stable and robust economy, Malaysia can be the top destination for those who wish to enjoy life at a lower cost, especially during the downturn of global economy. Currently, Pakistan is in the list of top 10 participating countries. In the past four years, 513 Pakistani principle applicants have successfully subscribed to MM2H, joining some 18,000 foreigners from 120 countries in the programme.

ER: There has been an increasing trend of Pakistani students going to Malaysia for studies over the last few years. What are your views on this?

I can think of five main reasons why more Pakistani parents are sending their children to pursue higher education in Malaysia i.e. world class education system at a competitive cost, opportunity to enroll in franchise twinning programme from reputable universities in the US, UK and Australia, affordable cost of living, guaranteed availability of Halal food supply, and lastly, a stable and safe environment for their children to study.

At the moment, we have close to 3,000 Pakistani students studying in Malaysia. The Consulate will continue to facilitate local companies to promote Malaysia as a preferred destination for quality higher education.

ER: Malaysia attracted an amazing 25 million tourists in 2012 and your remarkable "Malaysia Truly Asia" campaign is globally recognized. How has Malaysia achieved such great success in becoming a global tourist destination?

Plainly speaking, our greatest strength in tourism is its product diversity. Malaysia is fortunate to have been blessed with numerous tourism assets; from its colorful multicultural heritage and spectrum of flavors in its cuisine to the stunning beauty of its tropical eco-tourism. Malaysia also premised itself as a renowned destination for shopping, international sporting events, health tourism, homestay and MM2H programme as well as business tourism. We have a breathtaking recipe to suit the taste and preference of every visitor. Branding tourism goes beyond fancy billboards and a catchy tagline. The ability to showcase great tourism products must be driven by strong government initiatives. This includes massive investment in tourism services and infrastructure development.

ER: You mentioned about the spectrum of flavors in Malaysian cuisine but many countries claim the same. What makes Malaysian food so special?

It is a matter of taste. The culinary scene in Malaysia is an exotic gastronomic celebration. With its wide variety of cooking styles and flavors, your taste buds will be tantalized by the blend of Malay, Chinese and Indian multicultural recipes. Different states are all known for their distinctive signature dishes. Malaysia also has a thriving street food culture. This is a must-try experience for visitors to Malaysia, where you can try the mouth-watering local and authentic Malaysian favorites.

ER: How has Malaysia been able to surpass other countries in Medical tourism?

Malaysia is fast becoming a popular spot for healthcare and wellness tourists. Medical tourists to Malaysia jumped from 336,000 in 2009 to 583,000 in 2011. The increase is driven by cost-effective treatment, advanced medical facilities, well-trained doctors, visa benefit for medical tourists and short waiting period. It has become very obvious that medical and healthcare costs in the US and Europe are currently at a premium. With the global economic slowdown, there is a higher demand for low cost travel and Malaysia is offering good value for the money which is the key to its success in Medical tourism.

ER: What is the role of the Malaysian Consulate in improving the business contacts and coordination between the two countries?

Our role at the Consulate includes maintaining good contacts with the government and various trade bodies. We remain pro-business and conduct regular business networking between the Malaysian and Pakistani business communities. We practice an open door policy in welcoming business discussions and are keen to facilitate Pakistani companies doing business in Malaysia.

Abu Bakar Mamat is the current Consul General of Malaysia in Karachi. He joined the Malaysian foreign service in 2000. He has a degree in Political Science. He is married to Hidia and they have two children.
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Title Annotation:MALAYSIA / INTERVIEW
Comment:An exclusive interview with the Malaysian Consul General Mr.
Author:Mamat, Abu Bakar
Publication:Economic Review
Article Type:Interview
Geographic Code:9MALA
Date:Jun 1, 2013
Words:1890
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