Abdul Wahid Omar, Minister in the Prime Minister’s Department: Interview

Abdul Wahid Omar, Minister in the Prime Minister’s Department

Interview: Abdul Wahid Omar

What opportunities are arising for foreign investors as a consequence of the government’s plans to achieve developed-nation status?

ADBUL WAHID OMAR: Within the manufacturing sector, industries are being targeted to shift towards more diverse and complex products in the subsectors of chemicals, electrical and electronic products, and machinery and equipment, as well as industries with high potential growth, such as medical devices and aerospace. These catalytic subsectors will stimulate the growth and development of other subsectors due to strong linkages in terms of the value chain.

Foreign investors are encouraged to venture into frontier products which are complex, technologically feasible and valuable for strategic diversification. They are also encouraged to collaborate with local small and medium-sized enterprises to produce and develop the intermediate products that are not yet locally produced but are high in terms of value-added, so as to increase local content. This will help the manufacturing sector to produce outputs at competitive prices. The government is also improving the existing industrial estates (IEs) by adopting a full life-cycle costing approach to ensure their sustainability and viability, supported by the self-sustaining park management model. Foreign investors are encouraged to locate to the IEs for ease of doing business, as they will have adequate infrastructure and communications, as well as good services, like banking.

There are also investment opportunities opening up in research, development, commercialisation and innovation activities. In the 11th Malaysia Plan, the focus will be on strengthening linkages, and encouraging collaboration and trust among industries, research institutions and academia to enable better coordination, as well as the sharing and testing of ideas to create new value. Efforts to promote innovation will be made at enterprise and societal levels, and foreign investors are welcome to participate.

At the enterprise level, emphasis will be put on the private sector to drive innovation, by connecting them to universities and research institutes to ensure innovative findings and outputs by academia and researchers can be commercialised. Intermediaries have been set up to strengthen collaboration between research institutes and manufacturers, locally and overseas. Private financing, including angel investors and venture capital, are encouraged to finance firms that carry out research and development, commercialisation, and innovation activities.

At the societal level, a social financing model to facilitate public-private partnerships will help to promote investments from the private sector, foundations and individuals in delivering social services. Through this, the payment-by-results model will be introduced, which means that private social impact investors will provide funding for NGOs and community-based organisations to implement social services and will be reimbursed by the government when the agreed outcomes are achieved.

How is the government working to accelerate the transition to a private sector-led growth model?

OMAR: The government will take on more of a regulatory and facilitative role in growing private investment through targeted strategies, such as improving access to financing and making regulations more business friendly. Existing regulations will be streamlined and new ones introduced for greater transparency. The government will also implement reforms to ease domestic regulations and attract investment, as well as to allow investors to continuously grow their businesses. This will involve lifting the barrier on new, foreign unit trust management companies entering Malaysia, the removal of mandatory credit ratings, the liberalisation of equity shareholding for credit-rating agencies, and allowing full foreign ownership of international credit-rating agencies in the market.

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The Report: Malaysia 2016

Economy chapter from The Report: Malaysia 2016

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