INDUSTRY STUDIES DIVISION

A Short Study on Ways to Attract Foreign Direct Investment (FDI) - Taiwan and Singapore

Organiser: Shankaran Nambiar

Commissioned by the Ministry of Finance (MOF), the project relates to how Malaysia can position itself in order to attract foreign direct investment (FDI). This study focuses on the FDI experiences of Singapore and Taiwan. It should be noted that Singapore has had a long history of being an attractive centre to investors. Singapore has remained attractive despite the challenges posed by China. On the other hand, Malaysia has not been as successful in attracting FDI as it used to be during the pre-crisis period.

The objectives of the study are to trace the policies and strategies that have been employed by Singapore and Taiwan and to suggest what Malaysia can learn from the experience of these countries in terms of attracting FDI. Some of the broad areas covered in this study include industrial upgrading, institutional processes, human capital and trade initiatives.

This is a three-month study based on desk research. The project was initiated with a kick-off meeting on 23 August 2006, and the draft final report was submitted on 17 September 2006. The comments and feedback from the MOF have been incorporated in the final report and subsequently submitted on 31 January 2007.

Direct Investment Abroad: The Malaysian Experience

Organiser: Gregore Pio Lopez

This is a research paper commissioned by the Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India. It looks at trends, patterns and determinants of actual direct investment abroad (DIA) from Malaysia. The overall objective of this research project is to understand the phenomenon of South-South FDI flows and their implications to Asia. The paper entitled "Outbound Foreign Direct Investment: The Malaysian Experience" was presented at the International workshop on Intra-Asian FDI Flows: Magnitude, Trends, Prospects and Policy Implications on 25-26 April 2007 in New Delhi, India.

National Productivity Corporation (NPC) Survey on Impact of Different Weekends on Business Operations

Organiser: Quah Boon Huat

Not all states in Peninsular Malaysia have the same weekend regime. Kedah, Kelantan and Terengganu have their weekends on Friday/Saturday while the other peninsular sates have theirs on Saturday/Sunday. Though some may contend that the impact on business operations of firms having interstate operations or transactions is negligible because there are still four common workdays - Monday to Thursday - out of a possible maximum of five, it should be noted that research does not seem to support this contention. The difference of one weekday means that the affected business entities have co-ordination problems on their hands.

The main objective of this study is to document the experiences of businesses having to deal with co-ordination problems because of non-uniform weekend regimes. The survey results showed that having different weekend regimes make Malaysia less investor-friendly, and raises the cost of doing business here vis-a-vis our fast rising less costly regional competitors. The study was completed in May 2007.

A Strategic Study on MSC Cybercity/Cybercentre Rollout

Organiser: Dr Mohamed Thalha

Commissioned by the Multimedia Development Corporation Sdn Bhd (MDeC), the objective of the study is to provide MDeC with a strategic report on socio-economic development aligned to MSC National Rollout agenda for the Klang Valley and all states in Malaysia (including the Federal Territories). The project is structured into three broad components. The first component of the study is to examine the rollout of the MSC in Kuala Lumpur and Selangor as well as implications for Cyberjaya. The second part of the study concerns the rollout of cybercentres throughout the nation, while the third is to investigate the formation of a national network of MSC cybercentres.

The present project has as its starting point the "Macro Study on Readiness of States for the MSC National Rollout", a project carried out by the MDeC. Against the background provided by this study, MIER is expected to recommend potential cybercentre locations throughout the country within the context of the hub-and-spoke concept.

Besides locating the sites for the intended rollout, some of the key issues that will be considered include the attractiveness of Cyberjaya after the rollout and the need to re-define Cyberjaya's technology focus, if necessary. The identification of multiple locations within each state is expected to be carried out on the basis of existing plans, but with due consideration of links to industrial corridors that have already been established, availability of human resources, and growth areas, to name a few variables.

The third component of the project involves a study of a national network of MSC cybercities/cybercentres. This part of the project probably involves a few visits to internationally well-established science parks. The findings from these case studies would inform the project on how the hub-and-spoke concept can be used in the Malaysian case.

The duration of the study is five (5) months beginning 7 November 2005 with the final report submitted on 24 March 2006. Thereafter, a 6-months review report and a 12-months review report were made on 25 August 2006 and 23 February 2007, respectively.

During the period under study, the inception report was submitted on 18 November 2005, and the interim report on 22 December 2005. The draft Part 1 Report was submitted to MDC on 27 February 2006. Subsequently, all other draft finals were submitted. Thereafter, a meeting was held on 15 June 2006 to review all draft finals submitted earlier as well as to solicit comments and feedback, which were incorporated into the final report. The final report was subsequently submitted on 29 June 2007.

National Productivity Corporation (NPC) Study on Business Practices and Performance in the Services Sector

Organiser: Quah Boon Huat

This study, designed to comprehensively gauge the nature and capabilities of the Malaysian services sector, also seeks to identify the key issues that need to be addressed so that these capabilities can be further developed in the future. It provided the government with a timely insight into the skills, talents and innovative potential of the domestic services sector. These are areas that are crucial for improving business performance in the services sector, which has been targeted in the Ninth Malaysia Plan (2006-2010) to take the lead in driving economic growth. Key results of the study are as follows. While strategising and business practices in the Malaysian services sector are relatively decent, the degree of emphasis is uneven. There should thus be equal emphasis on all practices. Most of the services sub-sectors appear to have problems linking strategising/practices with operational outcomes. It is therefore not enough to just implement good strategising/practices. Firms should ensure, for example, that they are efficiently implemented, besides the effective monitoring of such activities. The study is completed with the submission of the report in December 2007.

Comparative Trade Reform

Organiser: Gregore Pio Lopez

This is a research paper commissioned by the South African Institute of International Affairs (SAIIA). It looks at Malaysia's trade policy focusing on the political economy of trade reform process. This research paper along with other selected countries will provide inputs to SAIIA, the London School of Economics and the European Centre for Political Economy on the desirability of and prospects for further (unilateral) trade reform in South and Southern Africa. Draft final was sent in August 2007, and the final report in September 2007. The results were presented and discussed in a conference in South Africa in October 2007. Revised paper was sent in December 2007 for publication.

Changes in Malaysia's Trade Pattern

Organiser: Shankaran Nambiar

The NID/NEAC (National Implementation Directorate/National Economic Action Council) Secretariat has commissioned the Institute to conduct a study on changes in Malaysia's trade patterns in view of its changing position in the regional and global trade scenario. This study has been conceived in the light of China's and India's growing strength as economic powerhouses, and Vietnam's increasing attractiveness as a destination for its low labour costs as well as Indonesia's growing market size. The purpose of this study is to: (a) review current trends and patterns in Malaysia's trade by sub-sector; (b) provide a comprehensive analysis on the volume and composition of Malaysia's recent trade; (c) compare and analyse Malaysia's trade pattern with that of neighbouring countries; and (d) provide recommendations on the measures and policy changes to enhance Malaysia's position as a trading nation.

The duration of the study is three months. The Institute made a presentation of the study's inception report on 12 February 2007 in the Malaysian Industrial Development Authority (MIDA). Work started upon receiving feedback and comment as well as the revised Terms of Reference (TOR) from the NID/NEAC Secretariat. The Institute is currently waiting for the contract agreement before making the presentation of the final report.

Malaysia's Success Story: Innovation and Export Development

Organiser: Shankaran Nambiar

The United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC) has commissioned the Institute to undertake a study to highlight Malaysia's successful export development stories that are based on public-private alliances.

The focus of the study is on how the public-private relationship has been developed in Malaysia. Special attention would be directed at the organisations that have shaped the development of this nexus and how these organisations are co-ordinated within the ambit of the national planning process. Towards this end, the main agencies in Malaysia that promote innovation and export development would be investigated. The study would concentrate on the following issues pertaining to the selected organisations: (a) objectives and scope of activities; (b) structure and strategies; and (c) the operational and governance aspects.

The final report will form the basis for a meeting with ECLAC economists, representatives from the public and private sectors, and from other stakeholders, as deemed appropriate.

The data collection stage of the project has been completed and the preliminary findings submitted to ECLAC. A writers' workshop and a presentation of the progress made to-date was held in Sevilla, Spain on 11-14 September 2007.

Comments have been received from ECLAC on the data collection phase of the project (the data collection phase involved six reports on each of the agencies studied and surveyed). Revisions and additions have been made as suggested by ECLAC.

ERIA Project on Analysis of Industrial Agglomeration, Production Networks and FDI Promotion: Developing Practical Strategies for Industrial Clustering

Organiser: Dr Foong Kee Kuan

Commissioned by the Economic Research Institute for ASEAN and East Asia (ERIA), this project is founded on the basis that the formation and strengthening of industrial bases are one of the conditions for developing countries to achieve sustainable economic growth and poverty reduction. MNCs have established production bases to incorporate their operations in Asia into the global production network. The investments by large MNCs induced further investments by companies from developed countries and resulted in developing industrial agglomeration in various parts of Asia. These experiences from select countries in Asia and Southeast Asia have spurred developing countries to implement policies for export and FDI promotion.

This project covers three broad areas: (a) research on industrial agglomeration in select industrial areas and cluster-to-cluster linkages; (b) FDIs by MNCs based on existing government statistics and surveys and case studies; and (c) questionnaire surveys and econometric analyses.

A meeting was held between the two parties in MIER on 21 August 2007 to discuss the design of the questionnaire. The questionnaire was sent out to around 300 companies in the manufacturing sector operating in the Klang Valley. The number of respondents received was small, despite numerous attempts made to remind them of the submission deadline. A meeting to discuss the results of the survey findings was held on 12-13 January 2008 in Bangkok, Thailand. A short summary of the survey findings was subsequently submitted to the project leader on 16 January 2008. The final report is due for completion and submission by 8 February 2008.

Pelan Strategik Perak Maju 2015

Organisers: Dr Mohamed Thalha/Lee Kim Bian

The State Economic Planning Unit of Perak requested the Institute to submit a proposal for Strategic Action Plan to Achieve the Status of Developed State by 2015. The Perak State Government has set four targets for the State to achieve the "Developed State Status" by the year 2015. These targets are: (a) to eliminate squatters (zero squatter) by the year 2010; (b) to eradicate poverty by the year 2010 (to abolish hardcore poverty by the year 2010, although poverty in general may last until 2015); (c) to raise per capita income to US$10,000 (RM35,000) by the year 2010; and (d) to achieve the knowledge state status by the year 2010 (K-initiative).

The Institute made a presentation of its technical proposal to a Committee chaired by the State Secretary of the Perak State Government on 20 August 2007 in Ipoh. At the presentation, the State Secretary requested the Institute to make a presentation of the technical proposal to YAB Menteri Besar of Perak as well, the date to be confirmed in due course. The revised technical proposal including the financial proposal was submitted to the State Economic Planning Unit of Perak on 28 August 2007 for its consideration and approval.

Subsequently, a presentation of the technical proposal was made to YAB Menteri Besar of Perak on 15 November 2007 who accepted the proposal favourably. The contract agreement between the two parties has been duly signed on 2 January 2008 for this 12-month study.

A fact-finding mission to Perak is to be held on 28-30 January 2008 covering five (5) of the nine (9) districts, namely: Kinta, Batang Padang, Hilir Perak, Perak Tengah and Manjung. This is to familiarise with various aspects of economic issues of Perak. In addition to this, a meeting was also held at the State Economic Planning Unit of Perak.

Posted by kala at 02:56 PM on March 31, 2009






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