1 “POLICY PRIORITIES FOR MALAYSIA IN THE AREA OF SERVICES TRADE” HISWANI HARUN AMBASSADOR PERMANENT MISSION OF MALAYSIA TO THE WTO THURSDAY, 30 NOVEMBER 2010 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY Y.A.B. Prime Minister on 10 March 2009: • “The Government will take steps to liberalise the sector to attract more investments , bring in professionals and technology as well as strengthen competitiveness ” • “In our effort to restructure the nation’s economy , in line with global trends, the focus will be on the services sector as it has potential to continue expanding and contribute significantly to economic growth …” 2
Transcript
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“POLICY PRIORITIES FOR MALAYSIA IN THE AREA
OF SERVICES TRADE”
HISWANI HARUN AMBASSADOR
PERMANENT MISSION OF MALAYSIA TO THE WTO
THURSDAY, 30 NOVEMBER 2010
MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY
Y.A.B. Prime Minister on 10 March 2009:
• “The Government will take steps to liberalise the sector to attract more investments, bring in professionals and technology as well as strengthen competitiveness”
• “In our effort to restructure the nation’s economy, in line with global trends, the focus will be on the services sector as it has potential to continue expanding and contribute significantly to economic growth…”
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People Quality of Life
Per capita income to rise from the present
US$7,000 (RM23,345) to US$15,000 (RM50,000)
Meets present needs without compromising
future generations
No one is left out in
contributing to and sharing in the creation of
wealth.
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Oil & Gas and Energy
Palm Oil
Finance and Insurance
Distributive Trade
Tourism
Information and Communication Technology (ICT)
Education Services
Electrical and Electronics
Business Services
Health Services
Agricultural
Greater Kuala Lumpur 4
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OLD APPROACH NEW EMPHASIS
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Growth primarily through capital accumulation. Focus on
investments in production and physical infrastructure in
combination with low skilled labour for low value added
exports
Growth through productivity. Focus on innovative processes and
cutting-edge technology, supported by healthy level of private
investments and talent, for high value added goods and services
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Dominant state participation in the economy. Largely
protectionist with large direct public investments
(including through GLCs) in selected economic sectors
Private sector-led growth. Promote competition across and
within sectors to revive private investment and market dynamism
and adopting internationally accepted standards
3 Centralised strategic planning. Guidance and approval
from the federal authorities for economic decisions
Localised autonomy in decision-making. Empower state and local
authorities to develop and support growth initiatives, and
Top Exporters of Services Top Importers of Services
USA (1) USA (1)
UK (2) UK (3)
Germany (3) Germany (2)
France (4) France (6)
China (5) China (4)
Japan (6) Japan(5)
Hong Kong (11) Hong Kong (19)
Belgium (13) Belgium (15)
Singapore(14) Singapore (14)
Switzerland (15) Switzerland(28)
Korea (19) Korea (13)
Russian Federation(22) Russian Federation (16)
Malaysia (30) (in 2008-30) Malaysia (30) (in 2008-31)
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To attain overall
growth of 7.5 per cent
during the Plan period
Achieve total investment of
RM687.7 billion during the Plan
period. Annually, RM45.8 billion
Increase contribution of
services to GDP to 59.7 per cent in
2020 (non-government)
IMP3 targets for service
(2006 -2020):
•RMK-10: GDP share of services in 2015 – 61.7% •Annual growth of 7.2% 9
Other services sectors with growth potential includes the financial sector, oil and gas, Aerospace Maintenance, Repairs and Overhaul (MRO), franchising and R&D
1. Healthcare Ministry of Health (MOH) (Malaysia Healthcare Travel Council)
Malaysia Medical Council
2. Tourism Ministry of Tourism (MOTOUR) (Tourism Board)
MOTOUR
3. Education & Training
Ministry of Education and (MOE) Ministry of Higher Education (MOHE)
Malaysian Qualifications Agency (MQA)
4. Business & Professional Services
Ministry of Finance (MOF) Ministry of Works (MOW) Ministry of Housing and Local Government (Professional Services Development Corporation) (PSDC)
Attorney General Chambers (AGC), Malaysian Accounting Standards Board, Bar Council, Board of Engineers, Board of Architecture, Board of Quantity Surveyor. 11
No. Sectors Ministry Responsible Regulators
5. Logistics Ministry of Transport (MOT) Commercial Vehicle Licensing Board, CUSTOMS, MOF, MOHA
6. Distributive Trade
Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC)
MDTCC
7. ICT Ministry of Science, Technology and Innovation (MOSTI) Ministry of Information, Communication and Culture (MOICC)
Multimedia Development Corporation, Malaysia Communication and Multimedia Commission
8. Construction Ministry of Works (MOW) (Construction Industry Development Board) (CIDB)
CIDB
*23 Regulatory Ministries and many Agencies involved in services 12
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Liberalisation of services
sector is currently being undertaken in:
ASEAN: through progressive
liberalisation under the ASEAN Framework
Agreement on Services (AFAS). (full liberalisation to be undertaken by 2015
and logistics by .(2013
WTO: through autonomous and
progressive liberalisation.
bilateral and regional FTAs:
through binding of GATS and GATS + commitments.
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22 April 2009: immediate liberalisation of 27 services sub-sectors. This liberalisation is undertaken autonomously or unilaterally, and will only be committed to potential FTA partners, should there be a request or interest or in exchange for market access in which Malaysia has interest.
On 28 April 2009 PM also announced liberalisation of the financial sector by allowing up to five top international law firms with expertise in international Islamic finance to practice in Malaysia. These firms will only be allowed to offer legal services in international Islamic finance.
On 30 June 2009, PM announced comprehensive rationalization of the investment guidelines administered by the Foreign Investment Committee (FIC). Horizontal commitments in AFAS, WTO.
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Signed in 1995
To enhance and strengthen cooperation among service
suppliers in ASEAN
To eliminate substantial barriers to trade in services
To progressively liberalise trade in services beyond those undertaken under GATS of WTO
To provide recognition
through MRAs
PRIORITY SECTORS
NON-PRIORITY SECTORS
e-ASEAN (ICT), Tourism, Healthcare
Logistics
End date for Liberalisation
2010 2013 2015
Foreign (ASEAN) equity participation
- 49% by 2006
- 51% by 2008
- 70% by 2010
- 49% by 2008 - 51% by 2010 - 70% by 2013
- 30% by 2006 - 49% by 2008 - 51% by 2010 - 70% by 2015 • construction:
51% in 2006 • 70% in 2015
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• 1st Package – 1997;
• 2nd Package – 1998. First Round (1996-1998):
• 3rd Package. Second Round
(1999-2001):
• 4th Package. Third Round (2002-2004):
• 5th Package – 2006;
• 6th Package – 2007.
Fourth Round
(2005-2007):
• 7th Package – 2009
• 8th Package - 2010 Fifth Round:
Five Rounds of Services Negotiations completed:
A total of 11 AFAS Packages to be concluded by 2015. 17
Services negotiations undertaken on “request-offer” approach, on bilateral and plurilateral basis.
Liberalisation of commitments of members are multilateralised (applicable to all Members).
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Doha Development Agenda (DDA) : Will be improving our coverage and foreign equity
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Completed and in Force:
Regional FTA Bilateral FTA
ASEAN-China Malaysia-Japan
ASEAN-Korea Malaysia-Pakistan
ASEAN-Australia/New Zealand Malaysia-New Zealand
On going Negotiations:
Regional FTA Bilateral FTA
ASEAN-Japan Malaysia-Australia
ASEAN-India Malaysia-US
ASEAN-EU Malaysia-India
Malaysia-Chile
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To complement services liberalisation, Malaysia will have to liberalise movement of professionals, skilled person, talents and experts under Mode 4.
This is being done through the WTO and various FTAs.
This will be required by foreign companies setting up business in Malaysia. This is an area where Ministries/State Government will have to identify the foreign skills needed to boost investments in the services sector.
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•Ministries / Agencies are not prepared to make commitment •Most stakeholders in the services sectors are not fully aware of the impact of services liberalisation.
•Acts and Regulations governing business and professionals services require review.
•Ministries/Agencies/State authority to identify domestic regulations that inhibit potential foreign investments and business opportunities.
LIBERALISATION
DOMESTIC REGULATIONS
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•Ministry of Domestic Trade, Consumerism and Cooperative directed by the Cabinet to take responsibility.
•Services under purview of many Ministries, agencies and also State Governments. •Need for greater co-ordination in the development of this sector, especially in enhancing capacity for export and take advantage of opportunities overseas.
UNREGULATED SECTORS
CO-ORDINATION
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• Review of the immigration procedures to facilitate the
movement of expatriates and professionals. More open policies for employment and services providers.
• Need to review existing rules and regulation to be consistent with Malaysia’s commitments under WTO, AFAS and FTAs.
MOVEMENT OF FOREIGN TALENTS
TRANSPARENCY OF RULES AND REGULATIONS
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•Data for industry and policy/decision makers. •Mechanism to enhance data collection. (GDP contribution, trade, investments, services index etc).
•Mind-set change required in the public and private sector to look at the services sector as a business.
RELIABLE INFORMATION/DATA
CHANGE IN MIND-SET REQUIRED
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•Need to prepare negative listing •Reviewing all domestic regulation affecting trade in
services
Trans Pacific Partnership
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Ability to attract foreign investments, specialised expertise and technology;
Add new capacity/fill-in vacuum;
Access to larger markets;
Opportunities for joint ventures (domestic and overseas);
Inject competitiveness;
Create high value jobs; and
Wider choice for consumers.
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The new economic model will re-focus on services as the new engine of growth. There is opportunity for growth domestically and to also take advantage of oversea market.
Services providers need to build capacity and improve productivity and efficiency to face competition and take advantage of market openings.
