SEMINAR ON BUSINESS OPPORTUNITIES IN MALAYSIA TUESDAY, 28 AUGUST 2007 OPENING ADDRESS BY MINISTER (T&I) “SINGAPORE AND MALAYSIA: A WINNING PARTNERSHIP FOR THE FUTURE”

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

Distinguished Guests,

Ladies and Gentlemen,

Introduction

I am pleased to be able to join Minister Rafidah and all of you at this seminar on “Business Opportunities in Malaysia”.

As can be seen from the strong turnout each year, there is a high level of interest from our businesses to find out more about investment opportunities in Malaysia, and how we can work together to translate these opportunities into mutually beneficial cooperation.

And we are both in a good position to pursue such endeavours. Let me elaborate.

Malaysia: Marking 50 Years of Economic Growth

In a few days’ time, Malaysia will officially mark half a century of nation building. In terms of economic progress, there is much for the Malaysian people to take pride in.

The Malaysian economy has undergone great transformation over the past fifty years. Previously reliant on agricultural and mining activities, the economy is now a diversified one that has moved high up the value chain and produced world-class corporate players like Petronas and Synergy Drive[1]. In this period, GDP per capita rose by ten-fold to more than RM 19,000[2], leading to vast advancements in the living standards of Malaysians.

Powered by strong performance in the key sectors of manufacturing, services and tourism, Malaysia achieved good GDP growth last year of around 6%, with exports crossing the milestone RM 1 trillion mark.

Even as the country marks its economic progress over the past half century, Malaysia is already laying the foundation for growth in the next fifty years and beyond. Under the leadership of PM Abdullah Badawi, the Malaysian government has put in place various initiatives to sustain the country’s growth trajectory.

These include the 9th Malaysia Plan (9MP), one of the country’s most significant developmental plans in history.

Since its unveiling last year, significant progress has been achieved on the implementation of the 9MP. A key milestone was reached in November 2006 with the launch of the Iskandar Development Region, or IDR. The IDR is a visionary development project that has excited not only Malaysians but also attracted the attention of international investors, including those from Singapore.

From press reports, I understand that potential investors from across the world have expressed great interest in the IDR. These include investors from the Middle East countries, China, Japan, Korea, Germany and France. Through the facilitation of our business chambers and the Malaysian High Commission, Singapore companies have also made a series of site visits to the IDR to better understand the development and the opportunities in store for them.

Apart from the IDR, Malaysia's other regional development plans, such as those recently unveiled for the Northern Corridor Economic Region (NCER), will also contribute to the range of investment opportunities across the country and generate new growth centres for the economy.

Regional Economic Outlook is Positive

On the regional front, a similar sense of optimism and confidence abounds in economies across Asia. Notwithstanding the recent turbulence in the global financial markets, the fundamentals for Asia remain strong.

Unlike a decade ago, the current growth enjoyed by many economies in this region is built on a sturdier foundation. This has been made possible by the rise of China and India as economic dynamos for the region and a resurgent Japan, all of which provide a broader base of growth for Asia.

Malaysia, together with Singapore and other members of ASEAN, is well placed to ride on this growth. For one, the realization of the ASEAN Economic Community (AEC) will position ASEAN as a substantial economic entity, alongside other markets like China, Korea and India. The creation of an integrated marketplace of 550 million people will help to inject more dynamism into Asia, and enhance the overall attractiveness of the region to investors.

Whilst the emergence of China and India will bring about competitive challenges, it will also give rise to greater economic opportunities. Through ASEAN’s economic engagements with these parties and the corresponding growth in intra-regional trade, investment and people linkages, Malaysia and Singapore will be able to benefit from their rise.

Shaping the Singapore-Malaysia Partnership

Bilaterally, prospects for mutually-beneficial economic cooperation have also never been better.

Firstly, Singapore and Malaysia possess complementary strengths and, together, offer a compelling value proposition to investors. In fact, in sectors like electronics, both countries are already regarded by companies and investors as an integrated economic space.

Because of our complementarities, there are many areas in which we can seek win-win cooperation, such as in tourism. A good example would be the upcoming Integrated Resort project in Sentosa, which combines Genting’s industry expertise with Singapore’s tourism plans. When completed, the project will bring about benefits not only to Singapore but also to Malaysia, in terms of higher tourist visitorship to the region.

Secondly, bilateral relations are setting the right tone for cooperation on the economic front. The first-ever Leaders’ Retreat between our two Prime Ministers and Cabinet Ministers in May this year was a significant marker in our relations. During the Retreat, it was agreed that both sides should be forward-looking and should pursue cooperation in areas that will yield mutual benefits.

Our ongoing cooperation in the IDR is a good reflection of this approach. Following the formation of a Joint Ministerial Committee (JMC), four areas of cooperation had been identified, including environmental matters, tourism, facilitating immigration clearance and enhancing transport links. To aid in the development of the IDR, the focus of these cooperative activities will be on bringing down existing barriers and promoting greater flows between the two sides. Such cooperation is a strong signal of Singapore and Malaysia’s commitment to work together to bring about a successful economic region that would generate mutual benefits.

Seize the Moment

Due in part to mutual familiarity and a shared business culture, Singapore-Malaysia economic linkages have traditionally been led and driven by the private sector and businesses. It should remain this way, even as we move forward. Whilst governments can help to pave the way and play a facilitative role through initiatives like the Malaysia-Singapore Third Country Business Development Fund (MSBF) and cooperation in the IDR, the private sector should and must remain firmly in the driver's seat.

Through the years, Singapore-Malaysia economic interactions and interdependence have been deepening. Given the current favourable economic and political climate, we ought to look forward, build on this progress and take our relationship to a new level.

The time is now. As Malaysia ushers in another 50 years of growth and development and the winds are blowing strongly in our favour, the private sectors of both sides should seize this moment to forge a winning partnership for the future and sail ahead together.

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