GETTING THE ECONOMY BACK ON TRACK


The Miti team during a visit to Western Digital in Penang, as part of Miti’s key role in gathering insights on industries so good business policies can be in place.

EXTERNAL trade has continued to improve in November 2020, seeing a year-on-year increase of 4.3% to RM84.43bil compared to the corresponding period last year, thanks to higher exports to the United States, Singapore, China and Hong Kong.

Moreover, Malaysia recorded a total of RM109.8bil approved investments involving 2,935 projects in the manufacturing, services and primary sectors for the first nine months of this year, with the bulk 59.5% (RM65.3bil) coming from the manufacturing sector, followed by services at 39% (RM42.8bil) and the primary sector at 1.5% (RM1.7bil).

The total investments, which created 64,701 job opportunities in the country, saw domestic direct investments making up 61.2% (RM67.2bil) with the remaining from foreign direct investment (FDI).

Although the positive growth is partly in tandem with the recovering economies of countries across the globe, the vital role played by the Ministry of International Trade and Industry (Miti) has helped rally Malaysia’s external trade at a faster pace, both in terms of export and enticing more local and foreign investors to capitalise on opportunities within the country.

Prime Minister Tan Sri Muhyiddin Yassin (right) spoke on various issues at the virtual Apec Economic Leaders’ Meeting in November 2020, while Azmin looks on.Prime Minister Tan Sri Muhyiddin Yassin (right) spoke on various issues at the virtual Apec Economic Leaders’ Meeting in November 2020, while Azmin looks on.

Through the phases of the movement control order (MCO) since early March, Miti has been involved in coordinating the opening of the economic sector while operating remotely, including critical functions such as ensuring the supply chain of essential goods and issuing letters of approval for companies to continue business operations in the early days of the pandemic’s outbreak, alongside enforcing Covid-19 standard operating procedures in industry, among other efforts in compliance with the conditions set by the National Security Council.

As a part of the Special Cabinet Committee established in April to develop strategic measures in safeguarding Malaysia’s economy and labour market impacted by Covid-19, Miti took care to engage industry associations, local and international chambers of commerce, as well as small and medium enterprises (SMEs) and other relevant ministries and agencies, in order to gain on-the-ground insights to enable the government to better address specific issues facing the business community.

The challenges unveiled through these engagements by Miti, including cash flow constraints, movement restrictions and supply chain disruption, were among the core considerations addressed in the RM260 bil Prihatin and RM35bil Penjana stimulus packages to hasten the country’s economic rebound.

Even after the packages were announced, Miti continued its efforts to address challenges and issues faced by industries particularly during the MCO, with Miti Minister Datuk Seri Azmin Ali, Deputy Minister Datuk Lim Ban Hong and other senior officials involved in state-level industry engagement to get first-hand information on issues the companies are facing and the transformation they have undergone due to the Covid-19 crisis.

The objective of these engagements were to help Miti design a better strategy and policies to support the industry’s growth moving forward, by enabling industries to provide their views and recommendations to the government, particularly in relation to restarting and recovery of their businesses and ensuring that assistance through the various stimulus measures reached their intended targets.

Going digital

With e-commerce seeing an unprecedented boom owing to physical distancing and other measures, Miti intensified efforts in a leading role to spur the transformation of Malaysia’s industries towards automation and digitalisation.

Among these projects is the #MyMudah programme by the Malaysia Productivity Corporation, an agency under Miti.

The programme, set to reduce regulatory burden for Malaysian businesses, encourages policymakers, regulators or regulating bodies to either abolish, review, and temporarily or permanently waive certain regulatory requirements if found burdensome to businesses and hinder their economic growth.

With the firm belief that e-commerce brings opportunities for businesses, especially SMEs, to promote their products and services to a wider market through technology, Miti’s statutory national trade promotion agency the Malaysian External Trade and Development Corporation implemented its eTrade programme as part of the drive towards digital transformation for the nation’s businesses.

Aimed at encouraging local companies to tap into the global supply chain through online exports, the eTrade programme incentivises eligible applicants with RM5,000 in the form of e-vouchers or claims, for their participation in international e-commerce platforms in different countries around the world, including Asean countries, China, India and the US.

In addition, Matrade also extended its Market Development Grant to recognise international virtual events, including trade exhibitions and virtual trade missions. Critically, it is currently - for a limited period of time - also easing the plight of SMEs in reimbursing up to 30% of total logistic costs (subject to a maximum of RM15,000 per shipment) sending Malaysian products overseas, in acknowledgement of the exponential rise of logistic costs worldwide.

To help tackle the issue of business continuity through digital means, among the initiatives the ministry introduced include the Covid-19 Intelligent Management System, which acts as a source of reference for the Royal Malaysia Police before issuing permission to companies to operate in the affected areas. Thus far, more than 278,000 companies in Malaysia have registered on the digital database.

Related to that is Miti’s proud contribution to creating history as the first Asia-Pacific Economic Cooperation (Apec) national secretariat to host Apec meetings via a virtual platform, starting with the Apec Virtual Extraordinary Senior Officials’ Meeting on Covid-19 in May 2020 - following the first Senior Officials’ Meeting held physically in January and February 2020 - to the Apec Economic Leaders’ Meeting in November 2020.

Apec 2020 has truly lifted Malaysia’s standing globally as the first regional summit organised fully virtually attended by 21

Apec Economic Leaders the likes of Donald Trump, Vladimir Putin, Xi Jinping, Justin Trudeau and Jacinda Ardern.

Welcoming investors

To ensure Malaysia remains steady on the path of economic recovery and growth by enabling executive and essential personnel to travel to, and continue their work in Malaysia during the global pandemic, Miti through its agency Malaysian Investment Development Authority (Mida) has established a One-Stop-Centre (OSC).

A Business Traveller Centre at KLIA is also expected to be set up soon to facilitate and enable business travellers’ movement to do their business/work in Malaysia.

Mida manages the OSC with representatives from the Immigration Department, Ministry of Health and Miti to ensure business travellers’ legitimacy and health status before they enter into Malaysia. The OSC handles applications for both short-term stay (less than 14 days) and long-term stay. As at Dec 29, the OSC Committee has approved 3,866 applications.

These are critical moves by the Malaysian government to continue to attract FDI during the pandemic.

Driving external trade

Miti also maintained its focus on facilitating trade to bolster the Malaysian economy by implementing procedures that balance the needs of the industry with efforts to break the chain of Covid-19 infections.

For instance, in May, Miti implemented new procedures for the endorsement of the Preferential Certificate of Origin under the free trade agreement (FTA) schemes during the MCO period, which were essential in ensuring the continuance of all import and export activities with FTA partner countries and the Generalised System of Preferences (GSP) donor countries.

Furthermore, Miti has continuously investigated the issue of the anti-dumping duty related to imported products from various countries over the past few months, as well as managing the anti-dumping duty policy.

Beyond that, Miti also the country’s economic frontliners was also a key driver in negotiations for the Regional Comprehensive Economic Partnership (RCEP).

Asean’s biggest FTA to date, RCEP was signed in November 2020 by all 10 Asean member states and five of Asean’s existing FTA partners to cover a market of 2.2 billion people with a combined size of approximately US$25tril (RM101tril) - approximately 29% of the world’s gross domestic product.

An overarching mechanism to facilitate free trade with a single set of rules and procedures for accessing preferential tariffs, the FTA opens new opportunities to access a broader spectrum of new markets through the elimination or reduction of import duties and tariffs on trade in goods, the creation of higher higher-quality rules for trade in services and the reduction of non-tariff barriers to trade among member nations, such as customs and quarantine procedures as well as technical standards.

Realising the pivotal role of SMEs as the backbone of every economy, RCEP also has a specific chapter on SMEs, providing provisions for information exchange and promotion of transparency measures to facilitate business and investment within the region, including providing economic and technical cooperation especially to smaller businesses.

Moving forward, Miti along with its 13 agencies as well as other ministries will continue to support building a conducive business ecosystem for the country, so economic recovery can be expedited.

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