Malaysian trade minister on industry and globalization

VO: Electrical and electronic products are key to the Malaysian economy, comprising the most critical segment of Malaysia's manufactured goods exports. The government recognizes FDI is important. What do you feel are three (3) key steps the Malaysian government is taking to protect Malaysia's electronics outsourced contract manufacturing industry?

Minister Aziz: The electronics industry is the leading industry in the manufacturing sector in Malaysia. The industry in Malaysia today consists of more than 900 companies in operation, producing a wide range of electronics products.

In 2006, Malaysian electronics product exports totaled US$74.0 billion, representing 57.4 percent of the total manufacturing exports. During the period of January-February 2007, exports of electronic products amounted to US$10.8 billion. Malaysia's 35 years of experience in this industry has created a pool of technical talents and expertise; and continues to attract new investments in this industry.

The success of the electronics contract manufacturing industry is due to the competitive cost of doing business in Malaysia. A wide range of tax incentives is also offered by the government to encourage investment in manufacturing activities. Companies which are given tax incentives qualify for partial or total relief from payment of income tax for a specified period of time.

Incentives for high technology companies includes ‘Pioneer Status' which amounts to an income tax exemption of 100 percent on statutory income for five years; or an ‘Investment Tax Allowance' which is 60 percent, on qualifying capital expenditures, for five years.

Malaysia also has strong intellectual property protection in place and is committed to safeguarding intellectual property on inventions. To ensure intellectual property protection in Malaysia is in line with international standards and provides protection for both local and foreign investors, Malaysia is a party to the following international treaties:

Convention Establishing the World Intellectual Property Organization (WIPO), 1967 - in force on January 1, 1989;

Paris Convention for the Protection of Industrial Property (1883) - in force on January 1, 1989;

Berne Convention for the Protection of Literary and Artistic Works (1886) - in force on October 1, 1990;

Trade Related Aspects of Intellectual Property Right (TRIPS) Agreement - signatory since January 1, 1995; and the

Patent Cooperation Treaty (PCT) 1970 - in force on August 16, 2006.

Malaysia also has an abundant, highly-skilled, and trainable workforce. The government works to help ensure the availability of highly-skilled workers under the country's respective development plans to support the growth of R&D activities and expansion of contract manufacturing.

Under the Ninth Malaysia Plan (2006-2010), investment in human capital development is given greater emphasis as a measure to sustain the country's economic growth and move the economy up the value chain. This is done in collaboration between the public and the private sectors. During the Plan period, the government has allocated a sum of US$13.3 billion for education and training.

VO: As the need increases for technology MNC supply chains to become more global, what are some of the characteristics defining Malaysia's current ‘infrastructure' that help MNC executives to meet the global supply chain demands of their organizations and their customers?

Minister Aziz: The government recognizes the importance of providing good infrastructure to attract and build investor confidence. Malaysia has a well-developed infrastructure, one of the best among newly-industrialized Asian countries. Among the attractive factors include:

well-developed physical infrastructure. For example, transportation and telecommunications facilities, excellent airport and port facilities, utilities and industrial land, to cater for the needs of investors;

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