MALAYSIA PROMISIN G 2017 OUTLOOK FOR

CONSTRUC TION

P ETALING JAYA: The construction sector outlook for 2017 seems promising, particularly for infrastructure construction players, given the slew of

government projects. A head of research said ongoing projects like the Mass Rapid Transit 2 (MRT2), Tun Razak Exchange (TRX) and Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project site in Pengerang will largely contribute to the order books of infrastructure construction players for the year. “Property construction activities are not going to be as buoyant. This is due to the property development cycle, which will continue to be soft this year,” he said. Apart from ongoing projects, the construction sector holds more upside in light of the RM12.8bil Sabah portion of Pan Borneo Highway as well as the upcoming High Speed Rail (HSR) projects. According to an Affin Hwang Capital sector report, three packages from the Sabah portion of the Pan Borneo Highway have been awarded, with the remaining packages targeted to be awarded by end-2017. The award deadline of end-2017 is to ensure the project can be completed by March 2021. Warisan Tarang-UEM Group-MMC Corp joint venture (JV) company, Borneo Highway PDP Sdn Bhd, was appointed as the project delivery partner

C O M P E T I T I V E N E S S I N F O L I N E

I N F O L I N E : 0 1 / 2 0 1 7

T U E S D A Y , J A N U A R Y 3 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

(PDP) for the Pan Borneo Highway Sabah project in April 2016. “Construction contract awards for Pan Borneo Highway Sabah will benefit contractors with established track records and precast concrete product manufacturers in Sabah. “Potential beneficiaries are Suria Capital Holdings Bhd-Gabungan AQRS Bhd JV and WCT Holdings Bhd, which are bidding for the project,” said Affin Hwang Capital.

More construction jobs: Ongoing projects such as the MRT2 will contribute to the order books of infrastructure constructions players this year.

In addition, there are more major property development projects planned in Sabah, such as the redevelopment of Kota Kinabalu (KK) Port with an estimated gross development value of over RM5bil. The redevelopment of KK Port, which includes the Sabah International Convention Centre, comprising One Jesselton, Jesselton Quay, and KK Convention City which are developed by the Suria-Gabungan AQRS JV, SBC Corp Bhd-Suria JV and Mah Sing Group Bhd respectively.

Affin Hwang Capital also reported that Suria planned to acquire 28.9 acres at KK Port for about RM350mil to develop an international cruise terminal as part of the integrated mixed development project. Currently, SP Setia is developing the RM2.2bil Aeropod project in Tanjung Aru while the state is developing the RM4bil Tanjung Aru Eco Development. Under the 11th Malaysia Plan 2016-2020, a key focus for Sabah’s development is to invest in infrastructure to improve connectivity within the state and international linkages. Besides Pan Borneo Highway Sabah, there is a planned RM311mil Kota Kinabalu Bus Rapid Transit (KK BRT) project. As part of the Sabah Development Corridor (SDC), there are plans to build a new KK Airport, light rail transit system in KK, new railway lines to connect the north and east coasts of Sabah as well as upgrading of Lahad Datu Airport. Meanwhile, CIMB Research opined that the KL-Singapore HSR theme remains relevant to rail players, such as Gamuda, IJM Corp and WCT, though the joint tender for the HSR system will only commence in the fourth quarter of this year.

T U E S D A Y , J A N U A R Y 3 , 2 0 1 7 T H E S T A R

“The decision on who to award the rail system to will be made by end-2018. “It remains to be seen if the timeline will also cover the civil works tender. “Apart from a joint tender for cross-border HSR operations, Malaysia will also put up its own tender for a domestic operator to run the domestic service within its borders,” said CIMB Research. The project time frame set in the bilateral agreement signed recently continues to put 2026 as the targeted completion date. This suggests an unchanged eight-year construction time frame, assuming that construction of the project commences in 2018. A majority of 335km of the rail system will be in Malaysia, while 15km will lie in Singapore.

I N F O L I N E : 0 1 / 2 0 1 7

MALAYSIA HEALTHCARE INDUSTRY EY ES RM5

BILLION REVENUE CONT RIBUTIO N 2017 GDP

K UALA LUMPUR, Feb 20 — The healthcare industry is eyeing a revenue contribution of up to RM5 billion to Malaysia’s 2017 gross domestic product.

This is on the back of an estimated one million healthcare travellers visiting the country this year. In 2016, the industry’s contribution to the GDP exceeded RM1 billion, said the Malaysia Healthcare Travel Council (MHTC) in a statement here today. It said the prime market comprises travellers from Asean, but Malaysia’s healthcare segment has also seen steady growth with visitors from China and India. MHTC said Malaysia’s medical travel sector, already a much sought-after choice in Asia, added another feather to its cap when one of its key drivers was honoured on the international stage for outstanding contributions to global healthcare. MHTC Chief Executive Officer Sherene Azli, joined the distinguished company of 50 other women from all walks of life, in being recognised among “Outstanding Women in Healthcare” at the World Health and Wellness Congress 2017 recently.

C O M P E T I T I V E N E S S I N F O L I N E

The Malaysian healthcare travel sector has seen tremendous growth in recent years. Sherene’s recognition will help drive Malaysian healthcare to even greater heights.

I N F O L I N E : 0 1 / 2 0 1 7

M O N D A Y , F E B R U A R Y 2 0 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

MHTC said Malaysia’s medical travel sector is a much sought-after choice in Asia.

NEW MILESTONES FOR M ALAYSIA N VAR SITIES

I T’S the dawn of a new era for Malaysian higher education. Malaysian universities continue to improve in their world university rankings based on 46 subjects.

According to the seventh edition of the QS World University Rankings by Subject recently released by Quacquarelli Symonds, our local universities now rank in the top 30 for three subjects; they were only ranked in the top 30 once in 2016. Malaysian universities also made the top 50 12 times; they were only ranked in the top 50 three times in 2016’s edition. The University of Malaya (UM) continues to be the best-performing institution with six subjects ranked in the top 50 worldwide. Other local universities with subjects ranked in the top 50 are Universiti Sains Malaysia (USM) for four of its courses, while Taylor’s University and International Islamic University of Malaysia (IIUM) have one each. This means that Malaysia now sees four of its universities offer at least one top-50 subject, compared to two universities in 2016 . The latest list also shows that Malaysian universities are ranked in the top 100 52 times, which is double 2016’s total of 26 top-100

C O M P E T I T I V E N E S S I N F O L I N E

placements. In total, 19 Malaysian universities are included at least once in this year’s QS World University Rankings by Subject, and at least one Malaysian university can be found in 36 of the 46 subject tables. The best-ranked subject for a Malaysian university is 23rd in the world for Electrical and Electronic Engineering, a position which UM shares with Carnegie Mellon University of the United States. This is the highest-ranked position by subject achieved by a Malaysian university, and an improvement of 14 places from 2016. The top university for this subject is Massachusetts Institute of Technology, while the top Asian university is Singapore’s Nanyang Technological University in 6th place. UM also scored impressively for Development Studies, for which it placed 26th. Topping the rankings for Development Studies is Britain’s University of Sussex, while the top regional university is the Australian National University in 11th place. Flying the flag for Asia is India’s University of Delhi which placed 16th. Two Malaysian universities made it to the top 50

I N F O L I N E : 0 1 / 2 0 1 7

W E D N E S D A Y , M A R C H 1 5 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

W E D N E S D A Y , M A R C H 1 5 , 2 0 1 7

I N F O L I N E : 0 1 / 2 0 1 7

N E W S T R A I T S T I M E S

in Rankings by Subject for Hospitality & Leisure Management, which QS has included in the list for the first time. Taylor’s University, in 29th place, is also the first private university in Malaysia to have made the rankings. The other local university is USM, which shares 32nd place with Britain’s Sheffield Hallam University. At the top for this subject is the University of Nevada-Las Vegas while The Hong Kong Polytechnic University is the highest-ranked Asian university at number three. Three of UM’s other engineering subjects which also made the top 50 rankings are Mechanical, Aeronautical & Manufacturing (33rd), Engineering & Technology (35th) and Chemical Engineering (38th, a position it shares with USM). USM also made the top 50 for Mineral & Mining Engineering, sharing 35th spot with the Indian Institute of Technology Kharagpur. For Education, UM is ranked 41st worldwide, a position it shares with the University of Texas at Austin. IIUM made the top 50 for Theology, Divinity & Religious Studies, sharing 46th place with Columbia University of the US. Finally, USM’s Environmental Sciences managed with make it into the top 50 by sharing 49th place with the University of Minnesota in the US, Britain’s University College London and Monash University of Australia. Also joining the ranks of the world’s elite universities is Universiti Teknologi Mara (UiTM), which now sees 13 of its subjects included in the QS World University Rankings by Subject.

UiTM vice-chancellor Professor Emeritus Hassan Said said that of these, eight were new subjects, namely architecture and built environment, arts and design, chemical engineering, agriculture and forestry, medicine, pharmacy and pharmacology, chemistry, and business management and administration. “The other previously-listed five subjects, namely accountancy and finance, education, mechanical engineering, electrical engineering, and computer science and information systems, have also improved their score rankings,” he said. “We are confident that with special strategy and scheduled monitoring, UiTM can continue to improve its position in the years to come.” Equally ecstatic, Higher Education Minister Datuk Seri Idris Jusoh congratulated the universities for their “stellar performance” in the latest Rankings by Subject release. “Having 12 subjects across four universities ranked within the world’s top 50 is a highly commendable improvement from three subjects in 2016. “Furthermore, Malaysian universities have doubled the number of subjects ranked in the top 100 to 52. “Congratulations to UM which achieved having six subjects placed in the top 50 and 19 subjects in the top 100. UM has excelled in various engineering fields and for the first time, its education programme is ranked 41st. “USM has also done us proud with four subjects in the top 50, notably with hospitality and leisure management ranked 32nd and mineral and mining ranked 35th.

W E D N E S D A Y , M A R C H 1 5 , 2 0 1 7

I N F O L I N E : 0 1 / 2 0 1 7

N E W S S T R A I T S T I M E S

“Speaking of firsts, we have a private university ranked in the world’s top 50, namely Taylor’s at 29th place for hospitality and leisure management, while the International Islamic University Malaysia also appears at 46th for theology, divinity and religious studies. “I am proud that our universities have excelled across diverse areas of knowledge, from engineering to education, hospitality to environmental sciences. “As the higher education space becomes more connected, accessible, and competitive, the ability to offer high quality education in such subjects will enable our higher education institutions to stand out worldwide and enhances Malaysia’s attractiveness as an international higher education destination.”

MALAYSIAN BUSINESSES TURN OPTIMISTIC ON

SHORT- TERM OUTLOOK FOR ECONOMY - MIER

K UALA LUMPUR: Malaysian businesses have turned optimistic on the short-term outlook for the economy with stronger sales in the manufacturing sector, while

consumer sentiment was only slightly improved though far from optimistic, compared with the last quarter of 2016, the Malaysian Institute of Economic Research (MIER) quarterly surveys reveal.

The quarterly business conditions and consumer sentiments surveys showed that businesses turned positive on the short-term outlook for the first time in 10 quarters in the first quarter of 2017, while consumer sentiment was still bogged down by issues to do with personal finances and labour market conditions remaining flat due to dim job prospects.

The Business Conditions Index (BCI) samples over 350 manufacturing businesses incorporated locally and foreign manufacturing concerns operating in Malaysia, covering 11 industries, while the Consumer Sentiments Index (CSI) is a sample of over 1,200 households in Peninsular Malaysia to gauge consumer spending trends and sentiments.

MIER indicated that the BCI reached 112.7 points in Q1 2017, up from 81.2 points in the fourth quarter

C O M P E T I T I V E N E S S I N F O L I N E

of 2016, due to factors such as stronger sales in the manufacturing sector, expansion of production levels due to higher domestic orders and exports picking up. This was further supported by lower stock levels, step-up in capacity utilisation, higher wage cost and higher local sales prices.

The CSI, however, still stood way below the optimism level at 76.6 points after increasing by 6.8 points from fourth quarter 2016.

I N F O L I N E : 0 1 / 2 0 1 7

T H U R S D A Y , A P R I L 2 0 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

Datuk Dr Zakariah Abdul Rashid Executive Director , MIER

MIER said consumer anxiety over escalating prices seems to be abating though, and some respondents are looking to spend, although cautiously, as respondents see this as a good time to buy or invest in major items.

The survey also indicated that as at Q1 2017, consumers seem to have set their eyes on housing as part of their spending plans.

“ Most of the household debts are on residential property. If we look at the property market itself, most high-end properties are not affordable as our income is low,” MIER executive director Prof Datuk Dr Zakariah Abdul Rashid said at the 22nd Corporate Economic Briefing here yesterday.

He said this is prevalent among those who are just entering the labour market but at the same time it is vital for consumers to spend more to boost economic growth.

Zakariah said the dilemma of the situation is that households are not earning enough to spend more or do not have enough savings to do so.

T H U R S D A Y , A P R I L 2 0 , 2 0 1 7

He said this is a matter of concern, as household consumption is an index of domestic demand, which is an engine for economic growth.

Similarly, according to Zakariah, there is “not much room for government to maneuver with its spending” which is another index of domestic demand, as fiscal revenue is highly dependent on tax collection from the Goods and Services Tax and crude oil.

“Most of the revenue goes to operating expenditure, and not much is left to spend on development expenditure,” he added.

The ringgit, which has seen reduced fluctuation, is not expected to improve, as market players are influenced by non-economic factors such as speculation, as well as political factors like the upcoming general election, he added.

I N F O L I N E : 0 1 / 2 0 1 7

T H E S U N D A I L Y

MALAYSIAN GOVERNMENT-BAC KED MDEC

LAUNCHES DIGITAL HUB AND ENTREPRENEUR

INITIATIVES; AIMS TO HELP STARTUPS SCALE

GLOBALLY

G overnment-backed innovation agency Malaysia Digital Economy Corporation (MDEC) has announced two new initiatives that will bolster the

country’s digitalisation efforts. The first is the Malaysia Digital Hub. This programme will provide the necessary resources for startups to scale globally. These include high-speed internet connectivity, funding opportunities, mentors and other aspects of a conducive business environment such as corporate tax exemptions. The first three digital hubs that have been approved by the government are APW, The Co. and Common Ground. They are all located in the Klang valley. The second initiative would be the Malaysia Tech Entrepreneur Programme (MTEP). It aims to attract global talents to expand or build startups in Malaysia. “Malaysia is able to connect businesses to a regional market of more than 625 million people. With the introduction of Malaysia Digital Hub and MTEP, the local and global tech startup communities can now leverage these benefits that our country has to offer. We believe this will help to

C O M P E T I T I V E N E S S I N F O L I N E

I N F O L I N E : 0 1 / 2 0 1 7

T H U R S D A Y , A P R I L 2 0 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

strengthen Malaysia’s position as a global hub for startups and entrepreneurs” said Dato’ Yasmin Mahmood, CEO of MDEC, in an official press release. MDEC also announced it will be enlisting the expertise of Microsoft, Next Academy, Maybank, and Y Academy with Kejora to nurture entrepreneurs. A hub for entrepreneurs The Malaysian tech ecosystem is considered one of the most developed (besides Singapore) in Southeast Asia; having birthed notable companies such as ride-hailing giant Grab and Catcha Group’s iflix. With regulation policies and facilities that support

Malaysia wants to invite talents to build startups in the country

startups, and a private sector that has begun to step up, Malaysia is the second top hotspot to launch startups in the world. And in a recent INSEAD report, Malaysia ranked 28th on the global talent competitiveness index with its vast pool of technical workers. Early this year, the government pushed its innovation drive up one notch with the launch of the Digital Free Trade Zone (DFTZ). Its goal is to become an e-commerce hub, in which SMEs and startups can build regional fulfilment centres. The DFTZ’s main strategic partners will be MDEC, Alibaba and Catcha Group.

I N F O L I N E : 0 1 / 2 0 1 7

M D E C T H U R S D A Y , A P R I L 2 0 , 2 0 1 7

MALAYSIA’S HEALTHCA R E SEC TOR

PROVIDES A CATALYST FOR GR O WTH

W hen it comes to healthcare, Malaysia has been hailed by the UN Development Programme as a shining example for other developing

countries. Due in no small part to its cheap, alternative brand of medical tourism, Malaysia’s healthcare sector is thriving. Deemed essential to the Malaysian economy, the government has prioritised healthcare spending, injecting RM23bn (US$5.2bn) into healthcare in 2016 – approximately 10% of the annual budget. Malaysia’s healthcare system consists of two tiers: a state-owned universal healthcare system for national citizens runs alongside a private sector that serves more affluent citizens and international patients. Due to projected demographic shifts – chiefly Malaysia’s ageing population, increasing life expectancy and the growth of non-communicable diseases – demand for healthcare is expected to grow. Healthcare is an increasingly important sector which will prove challenging to sustain in this global economic climate. Nevertheless, the Malaysian-German Chamber of Commerce (MGCC) notes that the sector has shown stronger resilience to economic slumps compared to other sectors. The Malaysian Healthcare Travel Council (MHTC) says it will create ‘continued and sustained growth’

C O M P E T I T I V E N E S S I N F O L I N E

in Malaysian healthcare, and the government continues to prioritise that sector in its budget. Healthcare is clearly integral to the government’s long-term vision, although doubts have emerged over the viability of heavy state subsidisation. There is growing pressure to restructure the healthcare system, with an emphasis on allowing private facilities to play a greater role. Thus, shifting demographics are influencing the government to rely more heavily on private capital to take Malaysia’s healthcare system forward. This is good news for investors, who will benefit from a progressive and innovative economic sector.

I N F O L I N E : 0 1 / 2 0 1 7

S A T U R D A Y , A P R I L 2 2 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

A hospital in Kuala Lumpur

Targeting healthcare According to the Ministry of Health (MoH), healthcare was the fastest-growing industry between 2000 and 2009 and thus recognised as a key driver of economic growth. In 2010, the Economic Transformation Programme (ETP) was established to transform Malaysia into a high-income economy by 2020. Under this initiative, healthcare was identified as one of 12 National Key Economic Areas (NKEA) to receive substantial government support and funding. The Healthcare NKEA focuses on encouraging areas of public-private collaboration and attracting investment in key manufacturing and service industries. This is being driven by seventeen Entry Point Projects (EPPs), which are expected to create 181,000 new jobs by 2020. These projects span a broad range of areas, from fostering a homegrown pharmaceutical industry, to establishing a range of care services for the elderly, to constructing a ‘world-class campus for healthcare and bioscience’. A later section of this special report will examine the kinds of companies that are benefitting from these EPPs. In 2016, healthcare’s contribution to national GDP exceeded RM1bn (US$226m), and the sector is eyeing close to thirty-three percent increase this year. Medical tourism Under the ETP, conditions for medical tourism have flourished. At the International Medical Travel Journal’s (IMTJ) Medical Travel Awards 2016, Malaysia swept up an array of awards for the second consecutive year, including ‘Destination of the Year’. As noted by the Economist Intelligence Unit (EIU), within the tourism sector – Malaysia’s fifth-largest industry – the medical subsector expanded by over 20% a year from 2011-2014. Revenues from medical tourism in 2010 totalled RM380m (US$86m). Although initially projected to grow annually by 10% up until 2020, actual figures are closer to 30%.

W E D N E S D A Y , A P R I L 1 5 , 2 0 1 7

For Malaysia, 2015 and 2016 were blighted by fallout from the spiralling 1MDB scandal, the sovereign fund from which Prime Minister Najib Razak was alleged to have embezzled funds. In 2016 Malaysia received 860,000 medical tourists – 22,000 less than in 2014. The government nonetheless has revived ambitions for 2017, targeting approximately one million healthcare travellers. Clearly, they envisage medical tourism as a burgeoning sector with healthy growth prospects, independent from other circumstances. Capturing the market Although Singapore once led the Asia-Pacific region for medical tourism, because of rising medical costs and hikes in demand this position is under threat. In terms of patient numbers, Thailand is Malaysia’s biggest competitor, treating approximately 2.81m foreign patients in 2015 – far exceeding Malaysia’s share. But Malaysia is well-placed to increase its share in the future: medical tourists will be attracted by Malaysia’s national currency, the ringgit, which has depreciated significantly since 2015 due to pressures caused by weak oil prices, slowing economic growth and uncertainty concerning Malaysia’s future relationship with Washington. Medical tourists in Malaysia are predominantly from Indonesia, with others coming from Bangladesh, China, India, Japan, the UK and increasingly the Middle East (Saudi Arabia and the UAE). Oxford Business Group notes Malaysia’s broad availability of halal food, halal medicines and treatments, and prayer spaces. Set against Thailand, this ‘gives Malaysia a particular edge when it comes to targeting Middle Eastern markets’. The government has also signed agreements with Kazakhstan, Libya and Oman to send patients to Malaysia, reflecting an aggressive approach to undercut the competition. In 2009, the MoH founded the Malaysian Healthcare Travel Council (MHTC) to promote and develop the medical tourism industry. The MHTC runs a partnership scheme with a number of high-quality

I N F O L I N E : 0 1 / 2 0 1 7

G L O B A L R I S K I N S I G H T

medical care providers (there are currently 74 accredited ‘partners’). Partner hospitals are geared towards care and support for international patients, able to assist with international liaisons, visa extensions and accommodate foreign translators. There is also a selection of ‘elite’ partners, which are required to meet the highest international standards, as determined by various regulatory bodies including the Australian Council on Healthcare Standards (ACHS) and CHKS Accreditation Unit (UK). Another important element is the anticipated construction of healthcare hubs in Penang, Melaka and Johor, which will be explored later. The substantial population of overseas Malaysian students gives it another advantage over Thailand. Doctors working in Malaysian hospitals will for the most part have been trained in western institutions, and will be required to speak fluent English. As the EIU acknowledges, specialists from abroad are also being encouraged to work in the private hospitals as well as operate stand-alone clinics. This increases the supply of doctors and investment available for private facilities, which are likely to shoulder greater responsibility for Malaysian healthcare in the future. Malaysia has shown creativity and innovation in the way it is exploiting its healthcare opportunities. Sports Minister Khairy Jamaluddin for instance stated he wants Malaysia to invest in wellness and fitness tourism alongside medical tourism. Wellness is a growing sector for established middle-income countries, and certainly lucrative; it could be a big earner for Malaysia. Opportunities for growth The forward-thinking attitude and creative enterprise shown by the government is resulting in new markets and plentiful business opportunities. MHTC is collaborating with the Malaysian Investment Development Authority (MIDA) to forge opportunities for business and investment in the healthcare industry. MIDA is designed to assist companies that wish to invest in manufacturing

W E D N E S D A Y , A P R I L 1 5 , 2 0 1 7

and services, but will also promote and help facilitate those projects. The government has taken a number of steps to incentivize private investment in healthcare. To encourage FDI, the government has waived the normal mandate of 30% ownership by indigenous Malays (the Bumiputra) which normally applies to foreign investment. Healthcare facilities will receive specific tax incentives dependent on what function they carry out (services, manufacturing, R&D, etc.). According to the ETP 2011 Report on Healthcare, three key markets – pharmaceuticals, medical technology, and healthcare services – have shown particularly strong growth. Pharmaceuticals Household names like Pfizer, GlaxoSmithKline and AstraZeneca operate in Malaysia, attracted by government incentives and access to the ASEAN Economic Community (a market of US$750m). The Ministry of Health (MoH) also encourages foreign investment by offering off-take agreements to new pharmaceutical companies, like the agreement signed with Indian corporation Biocon to supply insulin to state hospitals and clinics. The government is seeking to foster a homegrown pharmaceutical industry, for currently 70% of pharmaceutical products are imported. The pharmaceutical manufacturing Entry Point Project (EPP) ‘seeks to capitalize on the impending expiry of patents on major drugs to increase Malaysia’s generic drug manufacturing capacity’. Malaysia will produce generics of drugs with expired patents or forms contracts with foreign pharmaceutical companies to manufacture new generics on their behalf. The stage is thus set for larger companies to formulate collaborative partnerships with homegrown industry, passing manufacturing expertise and operational knowledge onto new start-ups. According to MIDA, of the 264 licensed pharmaceutical premises in Malaysia only 77 are licensed to produce ‘modern medicines’ (antibiotics, injectables, painkillers,

I N F O L I N E : 0 1 / 2 0 1 7

G L O B A L R I S K I N S I G H T

health supplements etc.). This proportion will need to increase in the future, and Malaysia certainly provides an ideal manufacturing environment. Malaysia has a strong intellectual property (IP) protection framework, and its membership of the Pharmaceutical Inspection Cooperation Scheme (PIC/S) and commitment to the latest Good Manufacturing Practices (GMP) will ensure stringent quality control for new manufacturers. The global pharmaceuticals market is approximately US$132bn. In 2015 Malaysia’s share was estimated at US$2.3bn (over twice that of Singapore) and is projected to reach US$3.6bn by 2020. This is likely a conservative projection and the real figure could be much higher, especially if Malaysia exploits the opportunity to export halal-certified pharmaceutical products to members of the Organisation of Islamic Cooperation (OIC). Medical technology Malaysia procures most of its medical equipment from foreign firms. But the government is seeking to make the transition to high-value medical device manufacturing, investing in diagnostic equipment and healthcare information technology. Considering Malaysia’s strong track record in electronics manufacturing, it is well-positioned to do so. The state of Penang was recently announced as the location for a state-of-the-art medical device manufacturing facility, reflecting its potential as an industry hotspot.

W E D N E S D A Y , A P R I L 1 5 , 2 0 1 7

Recent progress has been good, and the industry is certainly evolving. According to MIDA, investments in medical devices totalled RM1.72bn from January-August 2016. The Association of Malaysian Medical Industries (AMMI) forecasts that medical device exports will grow by 15% in 2017 (with projected revenues of RM 11bn (US$2.5bn)). Because of its long-standing rubber industry, Malaysia is the market leader in medical glove manufacturing, and is home to Hartalega Holdings and Top Glove. While the former is the largest producer of synthetic rubber gloves worldwide, the latter aims to own a 30% share in that market by 2020. MGCC reports that both companies are pursuing aggressive expansion strategies, including new high-tech factories, research facilities and biomass power plants in Selangor and Klang Valley. The sector is set to receive RM7bn (US$1.6bn) in further investment up to 2020. It will also benefit from an 8-10% growth in global demand for medical gloves this year.

I N F O L I N E : 0 1 / 2 0 1 7

G L O B A L R I S K I N S I G H T

NAJIB: GIVE PRIORITY TO LOCAL

EMPLOYEES FIRST

P UTRAJAYA, May 1 ― Prime Minister Datuk Seri Najib Razak has urged employers to prioritise on local workforce to fill job vacancy in helping the

government to materialise its five core areas in the Workers Transformation Leap. He said the government would organise the Job Fair @ UTC 2.0, to be launched on a large scale on May 20 at 11 Urban Transformation Centres (UTC) and four JobsMalaysia Centres nationwide, offering about 20,000 job vacancies from 300 employers. “Do give chance to Malaysian workers, if possible. Don't just offer jobs to foreigners. Give priority to the local workers,” he said followed by thunderous applause from the 5,000-strong crowd who came to listen to his 2017 Labour Day speech here today. Najib said one of the emphasis in the Workers Transformation Leap was to empower employment services public agency, in which the government was now reviewing the roles of JobsMalaysia Centre so that it would be more interactive, effective, customer-friendly and could act as the facilitator in job matching between job seekers and employers. The prime minister also launched the OKU (persons with disabilities) Talent Enhancement Programme

C O M P E T I T I V E N E S S I N F O L I N E

(OTEP) under the transformation programme to enhance the skills and employability of the group. Najib said, for a start, Sentoria Group Bhd and Mydin Mohamed Holdings Bhd had recruited 88 and 66 OKUs respectively, to be trained in various skills to meet the industry requirements. In his message, the Prime Minister also shared a success story of an OKU, Noorazizah Muhammad Zambri, who succeeded in running her business, Ariff Kasturi Enterprise, and hired seven OKU workers via a grant amounting to over RM52,000 under the OKU Business Incentive Assistance Scheme. On the second transformation leap, namely to optimise human capital as well as to strengthen policy planning and salary system, Najib said the government was now promoting the practice of the Productivity-Linked Wage System (PLWS). He said such a measure was to overcome the income gap among the society and to strengthen the salary system in the private sector in ensuring that the increase in salaries corresponding to productivity. “Almost 81,000 employers, involving approximately 3.5 million workers, have applied the PLWS as of April 2017” he added.

I N F O L I N E : 0 1 / 2 0 1 7

M O N D A Y , M A Y 1 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

“The government hopes that the target of 85,000 employers to implement the PLWS which will benefit about 3.7 million workers by 2020, will be achieved,” he said. Najib said the government was in the midst of developing the National Wage Index (NWI), to be completed by July, as a benchmark to help the employers to determine the wage levels of their employees that corresponds to qualification, skills and productivity. “I would like to suggest to the employers and industry players to apply the PLWS, NWI and payroll handbook...If the workers’ salaries commensurate with (their) qualifications, experience and productivity, this will certainly boost the competitiveness of (a particular) industry,” he said. On the human capital aspect, the Prime Minister said the government would continue to strengthen its collaboration with the private sector in providing a conducive working environment for female employees, including reviewing maternity leave, as well as paternity leave for eligible male workers. The efforts by the government bore fruit when the number of female participation in the labour market increased by almost 10 per cent to 54.3 per cent last year, compared to only 45.8 per cent in 2006,

M O N D A Y , M A Y 1 , 2 0 1 7

he said. Najib also drew attention to the initiative by Maybank which allowed its female employees to go on maternity leave for up to a year. Under the transformation leap on the technical and vocational education and training (TVET), he said over 80 per cent of TVET students had secured employment within six months after graduating. As for the transformation leap on prioritising the welfare and well-being of workers and vulnerable groups, Najib said several measures had been taken including the implementation of the national minimum wage policy. According to the prime minister, statutory inspections on more than 121,000 employers revealed that that 98 per cent of them had complied with the minimum wage policy while the remaining two per cent had been slapped with the notice of compliance. Under the programme in recognising the experience and expertise of skilled workers via the Recognition of Prior Achievement (PPT) method, almost 125,000 employees had been certified in various skills which could indirectly improve their livelihood, he said.

I N F O L I N E : 0 1 / 2 0 1 7

T H E M A L A Y M A I L O N L I N E

Datuk Seri Najib Razak says employers should prioritise on local workforce to fill job vacancies.

MALAYSIAN ECONOMY PE RFORMS WELL

DESPITE CHALLENGING GLOBAL

ENVIRONMENT-IMF

K UALA LUMPUR: The Malaysian economy has performed well over the past few years and remained resilient despite the challenging global economic

environment, said the International Monetary Fund (IMF) in its annual consultation report on Malaysia, which concluded on March 15.

Despite the global commodity price impact and financial market volatility, it said the country's economy remained resilient, owing to a diversified production and export base, strong balance sheet position, flexible exchange rate, responsive macroeconomic policies and deep financial markets.

"While real gross domestic product (GDP) growth slowed down, Malaysia is still among the fastest growing economies among its peers.

"The challenging global macroeconomic and financial environment puts premium on continued diligence and requires careful calibration of policies, going forward," it said.

It added that federal debt and contingent liabilities were relatively high, limiting policy space to respond to shocks.

C O M P E T I T I V E N E S S I N F O L I N E

The IMF also said that risks to the outlook were tilted to the downside, originating from both external and domestic sources.

External risks include structurally weak growth in advanced and emerging market economies and retreat from cross-border integration.

Although the Malaysian economy has adjusted well to lower global oil prices, the IMF said sustained low commodity prices would add to the challenge

I N F O L I N E : 0 1 / 2 0 1 7

T U E S D A Y , M A Y 2 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

"While real gross domestic product (GDP) growth slowed down, Malaysia is still among the fastest growing economies among its peers.

of achieving medium-term fiscal targets, adding that heightened global financial stress and associated capital flows could affect the economy.

Meanwhile, it said domestic risks were primarily related to the public sector and household debt, along with pockets of vulnerabilities in the corporate sector, adding that although the household debt-to-GDP ratio was likely to decline, household debt remained high, with debt servicing capacity growing only moderately.

The IMF said Malaysia's real GDP growth rate was expected to increase moderately to 4.5% year-on-year (y-o-y) in 2017 from 4.2% in 2016, with domestic demand, led by private consumption, continued to be the main driver of growth.

"While Malaysia's economic growth is expected to continue in 2017, weaker-than-expected growth in key advanced and emerging economies, or a global retreat from cross-border integration, could weigh on the domestic economy," said the IMF.

As such, the IMF urged vigilance and continued efforts to strengthen policy buffers and boost long-term economic growth.

The IMF also projected that consumer price inflation would rise and average 2.7 per cent y-o-y in 2017 on the back of higher global oil prices and the rationalisation of subsidies on cooking oil. It said the current account surplus would be largely unchanged, as impacts from an improved global outlook and higher commodity prices would be offset by the strength of imports on the back of a resilient domestic demand.

T U E S D A Y , M A Y 2 , 2 0 1 7

The IMF agreed that the authorities' medium-term fiscal policy was well anchored on achieving a near-balanced federal budget by 2020.

It said the planned consolidation would help to alleviate risks from elevated government debt levels and contingent liabilities, and build fiscal space for future expansionary policy, as needed.

The fund's board concluded that Malaysia's current monetary policy stance was appropriate, and going forward, Bank Negara Malaysia should continue to carefully calibrate its monetary policy to support growth, while being mindful of financial conditions, as global financial market conditions could affect monetary policy.

It said that the banking sector was sound, overall, and that financial sector risks appeared contained, but cautioned that potential pockets of vulnerabilities should be monitored.

The IMF also stated that it welcomed the authorities' commitment to keeping the exchange rate as the key shock absorber, and recommended that reserves be accumulated, as opportunities arose and deployed in the event of disorderly market conditions.

It also supports Malaysia's efforts in increasing female labour force participation, improving the quality of education, lowering skills mismatch, boosting productivity growth, encouraging research and innovation, and upholding high standards of governance.

I N F O L I N E : 0 1 / 2 0 1 7

T H E S U N D A I L Y

MALAYSIA VISION VA LL EY TO DRAW 290 BILLION

IN INVEST MENT, CREATE 1.3M JOBS

K UALA LUMPUR: The Malaysia Vision Valley (MVV) development has the capacity to attract more than RM290 billion in investment, besides creating 1.38 million job opportunities.

Prime Minister Datuk Seri Najib Razak announced this after witnessing an MoU signing involving Sime Darby Property Bhd, Brunsfield Development Sdn Bhd and Kumpulan Wang Persaraan at his office in Putrajaya, today.

"MVV is a planned, smart and inclusive development to ensure all segments of society reap the benefits of this development."

"Although MVV aspires to be developed as a modern metropolis, the needs of the public at all levels will be taken into account," he said.

Najib said the 153,000 hectare development, among others, focuses on providing affordable homes with well-planned and orderly urban facilities.

"MVV will provide more than 1,000 acres (400ha) of affordable housing. Apart from that, MVV will also provide more than 1,000 acres (400ha) of public facilities and recreational areas with green spaces," he added.

Najib said the project is spearheaded by the private sector and supported by the Federal government as well as the Negri Sembilan state government.

"The government has in principle approved

C O M P E T I T I V E N E S S I N F O L I N E

allocations for the development on a number of public infrastructure projects in the MVV areas within the 11th Malaysia Plan."

"In the first rolling plan of the 11th Malaysia Plan, RM560 million has been allocated for the development of road connections in the MVV area. Other projects being considered include highway networks and integrated rail services to connect the MVV to surrounding areas as well KLIA2," he added.

Also present at the event was Menteri Besar Datuk Seri Mohamad Hasan.

I N F O L I N E : 0 1 / 2 0 1 7

T H U R S D A Y , M A Y 4 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

The Malaysia Vision Valley (MVV) development has the capacity to attract more than RM290 billion in investment, besides creating 1.38 million job opportunities.

TURNING W ORLD TO WARDS MALAYSIAN EDUCATION

I n February, His Majesty King Salman Abdul aziz Al-Saud of Saudi Arabia was gracious to accept two honorary doctorates from the University of Malaya (UM) and the International

Islamic University Malaysia (IIUM). It was momentous and a privileged occasion, considering King Salman spent two of his three nights in Malaysia gracing our universities. On behalf of the Malaysian government, I also signed a memorandum of understanding on education matters with my Saudi Arabian counterpart during this state visit. Over the last few months, MoUs with Senegal and Turkey were completed. The MoUs are significant as they are aimed at facilitating greater cooperation in higher education, including student mobility for entry into our higher education institutions. I feel proud because these events indicate recognition and acceptance of the quality of Malaysia’s higher education system in the global arena. These positive developments undoubtedly serve towards strengthening Malaysia’s drive to be a global education destination by 2025.

C O M P E T I T I V E N E S S I N F O L I N E

Student Mobility Is Growing Worldwide

According to the Organisation for Economic Cooperation and Development (OECD), more than five million students were expected to leave their home countries in pursuit of higher education in 2015.

Of this number, approximately 53 per cent were from Asia, 25 per cent from Europe and eight per

I N F O L I N E : 0 1 / 2 0 1 7

S U N D A Y , M A Y 7 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

Until Dec 31, 2016, there were 172,886 international students in Malaysian higher education institutions, private and international schools, and language centres.

cent from Africa. And, this is a rising trend. In Malaysia, as of Dec 31, 2016, there were 172,886 international students in our higher education institutions, private and international schools, and language centres. In higher education alone, there are 132,710 international students. Under our Malaysia Education Blueprint 2015-2025 (Higher Education), we are aiming to attract 250,000 international students by 2025. Various factors around the world today, including a challenging global economy and changes in geopolitical trends in the United States and Europe, mean that international students are looking to pursue higher education outside of traditional destinations, such as the United States, the United Kingdom and Australia. I believe this is an opportune time for Malaysia to further promote and capitalise on its strengths in higher education to attract more international students. Making The Most Of Our Advantages A 2014 Unesco report titled “Higher Education Asia: Expanding Up, Expanding Out” highlighted five key reasons for international students to choose Malaysia as their educational destination — cultural comfort, cost, value for money, language of instruction and quality of life. The report also stated that “Malaysia provides a friendly environment for Muslim students”. I would add that Malaysians are very understanding and respectful due to Malaysia’s multiracial and multireligious composition. Higher education costs in Malaysia are also cheaper compared with traditional destination countries and that “the quality of Malaysian higher education is seen to be good, yielding a growing perception that higher education in Malaysia represents value for money”.

S U N D A Y , M A Y 7 , 2 0 1 7

I N F O L I N E : 0 1 / 2 0 1 7

N E W S T R A I T S T I M E S

According to the QS Best Student Cities 2017 survey, Kuala Lumpur, Malaysia’s capital city, was voted as the world’s most affordable city for students (for the third time in five years). Education quality in Malaysia is recognised as being on the rise, too. In the recent QS World University Rankings by Subject 2017, Malaysian universities have gained rankings among the global top 50 for 11 subjects (up from three in 2016). The subjects included mechanical, electrical and chemical engineering, hospitality and tourism, theology, and development studies. Additionally, 52 subjects taught in our universities have also acquired placing among the top 100 in the world. More Opportunities Beginning this year, public universities will allocate five per cent of places in their medical, pharmacy, and dentistry programmes to international students. This is a great opportunity as these courses are delivered by top-notch faculty and specialists. For instance, UM’s medical faculty is ranked 31st in the world for its academic reputation, putting it on a par with Duke University and ahead of University of Pennsylvania. Universiti Kebangsaan Malaysia (UKM) and Universiti Sains Malaysia (USM) are ranked 49th and 52nd, respectively. Malaysia is also home to more than 10 top international university branch campuses, including Monash and Nottingham (which are in the world’s top 100), as well as the Asia School of Business (ASB) in collaboration with MIT Sloan Management School. This means that international students have a good range of quality choices in their chosen fields.

The ministry is also focusing on increasing intake at postgraduate levels — Master’s, PhD and even Post-Doctoral. As it stands now, about 23 per cent of all international students in our universities are pursuing postgraduate degrees. This indicates adequate and competent research opportunities for current and potential international students. Better Policies and Procedures Over the past few years, the government, as a whole, has been working to improve international student management. Now, student visas are issued for the duration of the programme (as opposed to yearly) and visa applications can be made online and tracked in real-time. We have also introduced more family-friendly regulations for international students. Benefits the Economy, Too According to Universities UK, it is estimated that international students contribute £10.8 billion (RM60.8 billion) to the UK’s export earnings, of which £5.4 billion is spent off-campus on goods and services. In Malaysia, international students currently contribute approximately RM5.9 billion a year to the economy. The ministry estimates this to rise to RM15.6 billion by 2020. This said, our intention is not to attract international students for purely economic gain. It goes without saying that they contribute so much more in regard to cultural exposure, competitiveness and networking that will benefit our students and community.

S U N D A Y , M A Y 7 , 2 0 1 7

I N F O L I N E : 0 1 / 2 0 1 7

N E W S T R A I T S T I M E S

Improving Ourselves Malaysia is undoubtedly a very attractive education destination for international students. Nevertheless, I believe we can become a more student-friendly country. In traditional higher education destinations such as the UK, international students are accepted as part of the local community, its social and economic fabric. This translates into many student-friendly services and opportunities, from internships with industry and non-governmental organisations to volunteerism, and part-time jobs. As more international students come to view Malaysia as a choice destination, we Malaysians will have the opportunity to widen our own perspectives, and to learn about different nations, peoples and cultures. A greater awareness will lead to a better experience for all. We must remember that these are young students, and studying abroad is a life-defining experience, filled with excitement, anxiety and opportunity. With receptiveness of this global era and an adaptable mindset to the opportunities brought about by speedy technological evolution, Malaysia has all the elements to soar as a global education hub. Datuk Seri Idris Jusoh Minister of Higher Education

N A J I B R O L L S O U T M A L A Y S I A PRODUCTIVITY BLUEPRI NT

P UTRAJAYA: Prime Minister Datuk Seri Najib Razak today launched the Malaysia Productivity Blueprint, aimed at raising the country's productivity to new heights.

Najib, who is also the National Productivity Council (NPC) chairman, said NPC has agreed to roll out six key initiatives immediately out of the 16 key activities identified under the blueprint, which was initiated under the 11th Malaysia Plan. The council, which will supervise the country's Productivity Agenda, decided on the matter during its first meeting today, he said. The six initiatives are; to restructure and improve the management of foreign workers; to actively encourage adoption of 4th industry revolution technologies by companies across main economic sectors; and to strengthen digitalisation among small and medium enterprises (SMEs) through e-commerce and adoption of innovative technology. The other three are; to embed productivity targets for enterprises into disbursement processes of new grants, incentives and soft loans; to remove non-tariff measures that impede business growth and improve efficiency of the logistics sector, and to evolve governance model to drive game changing implementation of the blueprint.

C O M P E T I T I V E N E S S I N F O L I N E

At the same time, Najib said the council has also agreed to establish three productivity nexus which include retail and food and beverage (F&B), electric and electronic, and chemical products. "Each of this nexus will be provided a launching grant of RM5 million to carry out initial activities and ensure they will be able to fund their own projects in the future," he said.

I N F O L I N E : 0 1 / 2 0 1 7

M O N D A Y , M A Y 8 , 2 0 1 7

I N F O L I N E :

0 1 / 2 0 1 7

Prime Minister Datuk Seri Najib Razak (centre) at the launch of Malaysia Productivity Blueprint in Putrajaya. With him are Minister in the Prime Minister's Department in charge of the Economic Planning Unit (EPU) Datuk Seri Abdul Rahman Dahlan (left) and Minister of International Trade and Industry Datuk Seri Mustapha Mohamed (right).

Today's meeting also decided on the need to recognise multinational and local companies which have achieved high growth rate, high productivity, as well as with a high number local employees, Najib said. He said the 11MP has set the target to achieve national labour productivity growth of 3.7 per cent per annum. Najib said the target is achievable, if the people are committed and willing to work together through correct and strategical support, effective initiative and monitoring mechanisms. He said the blueprint will serve as a holistic measure to target initiatives to open up potential productivity at national, sectoral and industrial level. "The blueprint also outlines five strategic thrusts, 10 national initiaves and 43 sectoral initiatives.

M O N D A Y , M A Y 8 , 2 0 1 7

I N F O L I N E : 0 1 / 2 0 1 7

N E W S T R A I T S T I M E S

"The execution of the blueprint will be funded via at least 89 existing programmes under the 11MP with an allocation with RM9.5 billion for the period of 2017 to 2020. Najib said the NPC will review and formulate policies, as well as strengthen cooperation among ministries and agencies to ensure policy cohesion at all government levels to drive the productivity agenda. Also present were Chief Secretary to the Government Tan Sri Dr Ali Hamsa, Minister in the Prime Minister's Department in charge of the Economic Planning Unit (EPU) Datuk Seri Abdul Rahman Dahlan and Minister of International Trade and Industry Datuk Seri Mustapha Mohamed.