ECONOMIC PLANNING UNIT World Bank PSD Conference

Malaysia’s Economic
Development with emphasis
on Public-Private
Collaboration
By
Dato’ Abd. Rahman Husin,
Deputy Director General (Sectoral),
Economic Planning Unit,
MALAYSIA

May 2006
 1 Malaysia, EPU &
Development
2
BRIEFING OUTLINE
Planning
Public-Private Sector
Collaboration –An
Overview
3 Privatization
4
Sectoral Perspective
- Industrial Clusters
5 Conclusion
2
MALAYSIA AND ETHIOPIA
 Country Profile
 Independence : 31 August 1957
 Form of State : Federated constitutional monarch
MALAYSIA : GEO-POLITICAL

 Administrative Division : 13 states and 3 Federal Territories

 Total area : 330,242 sq km
 Land : 329,042 sq km
 Water : 1,200 sq km
 (Ethiopia : 1.1 million sq km – land area)
 Climate : Tropical; annual southeast (April-Oct) and northeast
(Oct-Feb) monsoons
 Land Use :
 Arable land : 3%
STRUCTURE

 Permanent crops : 12 %
 Forests : 68 %
 Others : 17 %
 Language : Bahasa Malaysia (Official), English, Chinese, Tamil
 Religions : Islam, Buddhism, Hinduism, Christianity & Others

Map
 MAIN FUNCTIONS OF EPU
• Formulate policies and strategies in development planning
• Prepare long and medium term plans
• Prepare development programmes & project budget
EPU MALAYSIA

• Monitor & evaluate the achievement of development

programmes & projects
• Advise government on economic issues
• Initiate & undertake necessary economic research
• Plan & coordinate the privatization programme & evaluate its
achievement
• Coordinate Malaysia’s involvement in the development of
the Growth Triangle Initiatives
• Initiate & coordinate bilateral & multilateral assistance
5
• Manage the Malaysian Technical Cooperation Programme
 ORGANIZATIONAL STRUCTURE OF THE EPU

Director General

Deputy Director General Sections directly under the Deputy Director General
(Macro Planning Division) Director General (Sectoral Planning Division)

Macroeconomics Secretariat to the Industry & E. Services

National Economic
Action Council Infrastructure & Utilities
Distribution
Social Services
Human Resources Secretariat to the
Foreign Investment Agriculture
Regional Economics Committee
Energy
Environment General Services
Development Budget
Knowledge Economy Legal Adviser
Privatization

Technical Services
No. of officers : 250 External Assistance
No. of staff : 150
Total : 400
 Planning Horizon . . .
 LONG TERM PLANNING
– Vision 2020, 1991-2020
MAJOR POLICY EVOLUTION

– First Outline Perspective Plan (OPP1), 1971-1990

PLANNING HORIZON AND

– Second Outline Perspective Plan (OPP2), 1991-2000

– Third Outline Perspective Plan (OPP3), 2001-2010

 MEDIUM TERM PLANNING

– Five-year development plans, such as the Ninth
Malaysia Plan (2006-2010)
– Mid-term review (MTR) of the five-year Plans

 SHORT TERM PLANNING

– Annual Budget
7
Major Economic Policies Vision 2020
TOTAL DEVELOPMENT

Performance & Impact

National Mission
Oriented Development
2006 - 2020 to achieve the goals of
Vision 2020
National Balanced
Development Development,
Policy (NDP) 1991-2000

New Economic Growth with Equity, 1971-90

Policy (NEP)

Post- • Laissez-faire / export-oriented

independence • Economic and rural development
1957-70
 Transformation From an Agro-based to an Industrial-based Economy . . .
(GDP in RM billion at 1987 prices / Percentage to Total in italics)
RM billion
300

250

200

57.6 % 58.1%
150
53.9 %

100
12.2 % 43.1 % 46.8 %
31.9 % 30.8 % 31.4 %
50
37.5 % 17.2 % 24.6 %

0 26.7 % 21.0 % 16.3 % 8.9 % 8.7 % 8.2%

1970 1980 1990 2000 2003 2005

Agriculture Construction Manufacturing Mining Services
 Diversification Of Exports . . .
(% to Total Exports)
Manufactures
80.5
Rubber Tin
33.4 19.6

Forestry
16.3
Others Oil & gas
9.8 Palm Oil 3.9
Oil & gas Palm Oil
5.1 Manufactures
11.9 9.2 Others 3.6
Forestry
Tin Rubber 4.2
1.2 1.1
0.2

1970 2005
RM 5,163 million RM 533,790 million
(US$2,065 million) (US$141,588 million)
ECONOMIC PERFORMANCE Real GDP Growth . . .
Average 1971- 80 7.5 %
Average 1981- 90 5.8 %
Average 1991- 2000 7.1 %
Average 2001- 05 4.5 %

2000 8.5 %
2001 0.3 %
2002 4.4 %
2003 5.4 %
2004 7.1 %
2005 5.3 %
2006e 6.0 % 11
 The Guiding Parameters
DEVELOPMENT PLANNING

 Open economy

 Mixed system

 Multi racial society

A federation
12
DEVELOPMENT PHILOSOPHY
Partners In Development . . .
through a MIXED ECONOMIC SYSTEM of free
enterprise but with active government
support and direction
The GOVERNMENT provides the broad
thrusts and sets direction for the whole
economy, and ensures the achievements of
socio-economic goals
The PRIVATE SECTOR is free to operate and
given appropriate policy, institutional and
infrastructural support. 13
 DEVELOPMENT PLANNING MACHINERY
PARLIAMENT

Cabinet Ministers

National Planning Council National

National Economic Action
Action Council (NEAC), Draft Policy
National Economic Council
Consultative Council National Development
(NECC) Planning Committee
Secretariat Draft
Implementation &
Economic Planning Unit Coordination Unit
Private Sector
Proposal General framework
Dialogue
Inter-Agency Planning Group (IAPG)
Proposal Proposal Consultations
Circulars Circulars
Federal Ministries & Agencies State Governments Private Sector
 Malaysia Incorporated Policy . . .
PUBLIC-PRIVATE COLLABORATION

 Launched in 1983 ~ marked the introduction of

structured public-private sector collaboration
 Stresses the importance of cooperation between
public and private sectors
 Establishment of several consultative panels/
dialogues comprising members from the public and
private sector
 Budget & MITI dialogues
 Malaysian Business Council
 Government began instituting major policy
initiatives
15
 MAJOR POLICY INITIATIVES
 Economic liberalisation & deregulation
 Improving investment policies & incentives
SUPPORTING PRIVATE

 Ensuring a business-friendly environment

SECTOR INITIATIVES

 Administrative & institutional improvements

 One-stop centres

 Systems & procedures for licensing

 Client’s Charter

 Productivity improvements – TQM, KPIs

 Public service delivery

 Providing an integrated industrial

infrastructure 16
 Ninth Malaysia Plan, 2006 – 2010
The National Mission, 2006 – 2020
TOWARDS 2020 ~ THE NEXT PHASE

1. Moving the
economy up the
value chain
5. Strengthening the
country’s institutional &
implementation
capacity ~ establish a 2. Raising the capacity
more effective for knowledge and
implementing & innovation, and
monitoring mechanism Five Key nurturing “first class
Thrusts mentality”

3. Addressing
4. Improving the persistent socio-
standard and economic inequalities
sustainability of the constructively and
quality of life productively

To achieve the goals & objectives of Vision 2020 17

 Thrust
To move the economy up the value chain
1

 Increasing productivity, competitiveness & value-add

THE NATIONAL MISSION,

 Generating new sources of wealth & job creation in technology-

and knowledge-intensive sectors
 Giving a lead role to the private sector, &
increasing private sector investment by
providing an enabling environment for
doing business, enhancing SMEs
development, increasing public-private
partnerships as well as attracting targeted
2006-2020

high-quality FDI
 Inculcating a culture of high performance
& excellence in public & private sectors
including GLCs
 Expanding market for Malaysian products and services 18
 Thrust
To strengthen the institutional & implementation
5 capacity

 Improving public services delivery by

THE NATIONAL MISSION,

strengthening governance, streamlining

administrative processes and measuring
performance
 Improving usage and cost-efficiency of public
sector funds by upholding financial prudence
as well as improving the monitoring of
implementation
 Addressing actual and perceived corruption in
2006-2020

both the public and private sectors

 Enhancing corporate governance and delivery
of private sector services by improving legal
and regulatory frameworks
 Strengthening the role of Parliament, media &
19
civil society
ECONOMIC PLANNING UNIT

PRIVATIZATION

20
 PRIVATIZATION POLICY
PRIVATIZATION POLICY

• Privatization policy was launched

in 1983
• It represented a policy shift from
public sector-led to private
sector-led growth
• The policy has been an integral
part of the national development
policy of Malaysia
 Objective of Privatization . . .
PRIVATIZATION POLICY

 Reduce financial & administrative

burden of the Government
 Reduce public sector size & direct
participation in the market place
 Promote competition, efficiency &
productivity
 Accelerate economic growth
 Meet the targets of NEP, NDP & NNM 22
SCOPE OF PRIVATIZATION
Airports RM10.0 bn / Ports RM7.8 bn Power RM42.3 bn
USS2.9 bn /US$2.1bn / US$11.1bn

Urban Telecommunications/
Roads/highways
Transportation RM12 multimedia RM6.6 bn
RM31.6 bn/US$8.3bn
bn/US$3.2bn /US$1.7bn

Water treatment
 PRIVATIZATION METHODS
 Existing Projects/Activities :
 Outright sale (assets or shares)
PRIVATIZATION POLICY

 Lease
 Management-Buy-Out
 Management Contract
 New Projects :
 Build-Operate-Transfer (BOT)
 Build-Operate (BO)
 Build-Lease-Transfer (BLT)/Build-Transfer (BT)
 Guiding Principle : Choose a feasible method which maximize
private sector investment
 Administrative machinery :
 Centralized planning and processing at the EPU
 Decentralized implementation by the ministries and State
Governments
24
 Standardization of terms and conditions of privatization
 PRIVATIZATION ACHIEVEMENTS SINCE 1983
• Total privatized projects 485
PRIVATIZATION POLICY

–Existing projects 346

–New projects 139
• Workers transferred to the private sector 113,200
• Savings (RM billion)
–Operating expenditure 7.8
–Development expenditure 154.0
–Proceeds from sale of Government equity 28.9
• KLSE market capitalization (Oct 2005)
–RM billion (for 40 privatized entities) 174.1
–% to total market capitalization 23.0
25
 PRIVATIZATION POLICY - LESSONS LEARNT

• Need strong commitment by the Government

PRIVATIZATION POLICY

• Strong policy statements on private sector as the

engine of growth
• Private sector must possess a certain level of
expertise and readiness to undertake project &
investment risks
• Require a well-developed financial market to
support large scale investment
• Need proper planning, monitoring & coordination
to ensure success in implementation
• Necessary to undertaken rigorous evaluation on
project viability 26
ECONOMIC PLANNING UNIT

INDUSTRIAL
CLUSTERS –
PUBLIC-PRIVATE
PARTNERSHIP

27
 E&E Industrial Cluster
• Major driver in transforming Malaysia from an
agricultural to industrial exporter
PUBLIC-PRIVATE PARTNERSHIP

• Took off in the early 1970s with export-oriented

industrialization strategy
• Attractive investment climate: Incentives FDI
 Investment Incentives Act 1968 & Industrial
Coordination Act 1975 provided better incentives to
attract FDI in E&E sector
 Key support institutions, infrastructure & services
 Industrial Infrastructure
 Utilities & Telecommunications
 Air Cargo & Port Facilities
 HRD – PSDC, Industrial Training Institutes,
Universities and educated low-wage labour
• Leading industrial subsector
 28% of manufacturing value added (2005)
 65.8% of exports of manufactured goods
 26.8% of total manufacturing sector employment 28
 Enhancing E&E Industrial Cluster –
Development Strategies
PUBLIC-PRIVATE PARTNERSHIP

• Moving the value chain up by encouraging

MNCs to shift more sophisticated/high tech
operations to Malaysia
• Deepening supply chain by developing
capabilities in domestic firms
• Increasing value added through the
technology acquisition & development
• Generating synergy with the development
of ICT & multimedia industry
• Nurturing global Malaysian-owned
companies e.g. Globetronics, ENG
Technology
29
ECONOMIC PLANNING UNIT

CONCLUSION

30
 ROLE OF THE PUBLIC SECTOR
 Strategic integrator & facilitator of development efforts in
addition to its traditional role of administrator & provider
CONCLUDING REMARKS

of basic socio-economic infrastructure

 Develop long, medium and short term plans in pursuit of
national socio-economic development goals
 Responsible for macro and socio-economic management
towards socio-political, macroeconomic and financial
stability
 Enhance liberalization and deregulation towards creation
of a conducive environment for private investment
 Charting new directions and strategies for growth
 Custodian of public goods and spearheading social
programmes
 Governance by networks – collaborate with private firms,
industry associations and NGOs & engaging citizens
 ROLE OF THE PRIVATE SECTOR
CONCLUDING REMARKS

 Provide dynamism in spearheading the economy

and be the engine of growth
 Improve efficiency & productivity towards the
creation of a competitive private sector
 Engage foreign investors in mutually beneficial
partnership and joint ventures
 Embark on R&D and innovation activities for
wealth creation
 Develop long, medium and short term plans in
pursuit of national goals
 CRUCIAL ELEMENTS FOR SUCCESS
• Strong political and public sector
CONCLUDING REMARKS

support
• Sufficient level of empowerment
• Close collaboration among central
agencies Ministries and implementing
agencies
• Strong partnership between public and
private sectors
• Effective communication strategy 33
ECONOMIC PLANNING UNIT

THANK YOU
www.epu.jpm.my

34
ECONOMIC PLANNING UNIT

SLIDES
HYPERLINKED

35
 Thrust
To raise the country’s capacity for knowledge and
2 innovation and nurture ’first class mentality’

 Promoting Islam Hadhari as a comprehensive & universal

development framework for the nation
 Undertaking comprehensive improvement of the education
system, from pre-school to tertiary level, from the aspects of
curriculum and teaching to school facilities, with a special focus
NATIONAL MISSION,

on raising the standard of schools in rural areas

 Enhancing national schools to become the people’s “school of
choice”
 Producing universities of international standing and ensuring that
tertiary institutions meet the needs of employers
 creating more avenues for skills development, training and
lifelong learning for the labour force at all levels and for all ages,
2006-2020

including in ICT
 Providing an environment and innovation system which
encourages top-quality R&D and its commercialisation
 Refining and implementing programs which encourage the
development of a strong moral and ethical culture as
encapsulated in the National Integrity Plan
 Empowering youth & women to participate in national 37
growth and development
 Thrust
To address persistent socioeconomic inequalities
3 constructively & productively

 Eradicating hardcore poverty by 2010 as well as reducing

overall poverty
 Reducing disparities between rural and urban population &
among states & regions via sustainable income-generating
avenues & by improving access to basic needs such as
NATIONAL MISSION,

housing, education, healthcare, utilities & transportation

 Developing less developed regions through regional growth
centres
 Bridging the digital divide
 Addressing inter- and intra-ethnic disparities, particularly by
raising incomes through the enhancement of skills &
capabilities
2006-2020

 Promoting equal opportunities in employment towards

reducing disparities in occupation & income as well as
enhancing integration among the ethnic groups
 Creating a new generation of competitive Bumiputera
entrepreneurs & enterprises
 Reviewing past restructuring policies and programmes to
evaluate their effectiveness and impact, and to focus 38
future policies and programmes on merit and need
 Thrust
To improve the standards and sustainability of the
4 quality of life

 Ensuring better protection of the environment

and more efficient usage of natural resources
 Enhancing energy sufficiency and efficiency,
NATIONAL MISSION,

including diversifying sources of energy

 Increasing the efficiency of water services
delivery
 Providing better public transportation to relieve
congestion and reduce fuel usage
2006-2020

 Improving access to and quality of healthcare

and affordable housing
 Ensuring public safety and security
 Enhancing the development and promotion
of Malaysian culture, arts and heritage 39
 Investment Incentives . . .
 Pioneer status or Investment tax
allowance for manufacturing companies
SUPPORTING PRIVATE

 Incentives for small- & medium-scale

SECTOR INITIATIVES

enterprise
 Training and R&D Grant
 Incentives for high technology
companies
 Incentives for strategic projects
 Incentives for R&D
Back
40
Other Incentives
 Investment Incentives . . .
 Incentives for software development
 Pre-packaged incentives
SUPPORTING PRIVATE

 Incentives for exports

SECTOR INITIATIVES

 General incentives
 Industrial building allowance
 Infrastructure allowance
 Import duty exemptions for:
o raw materials / components and
o equipment & machinery
41
 Manufacturing Investment in Approved Projects, 2001- 2005
Capital Investment (RM million)
Industry Total

Number Domestic Foreign

Resource-Based 1,948 25,612 (46.2) 23,903 (31.0) 49,516 (37.3)
Food Manufacturing 369 3,469 ( 6.3) 2,303 ( 3.0) 5,772 ( 4.4)
Beverages and Tobacco 26 142 ( 0.3) 470 ( 0.6) 612 ( 0.5)
Wood & Wood Products 193 2,267( 4.1) 943 ( 1.2) 3,210 ( 2.4)
Furniture and Fixtures 233 1,363 ( 2.5) 297 ( 0.4) 1,659 ( 1.3)
Paper, Printing and Publishing 123 6,418 (11.6) 4,850 ( 6.3) 11,268 ( 8.5)
Chemical and Chemical Products 288 5,004 ( 9.0) 3,025 ( 3.9) 8,029( 6.1)
Petroleum Products 61 1,787 ( 3.2) 6,289 ( 8.2) 8,076( 6.1)
Natural Gas 2 50 ( 0.1) 0 ( 0.0) 50 ( 0.0)
Rubber Products 144 1,442( 2.6) 963 ( 1.2) 2,405( 1.8)
Plastic Products 358 2,050( 3.7) 1,760 ( 2.3) 3,810( 2.9)
Non-Metallic Mineral Products 151 1,620( 2.9) 3,005 ( 3.9) 4,625( 3.5)
Non-Resource-Based 2,771 29,303 (52.8) 53,068 (68.8) 82,371(62.1)
Textiles and Textile Products 178 1,171 ( 2.1) 947 ( 1.2) 2,117( 1.6)
Leather and Leather Products 12 57 ( 0.1) 17 ( 0.0) 74 ( 0.1)
Basic Metal Industry 163 9,308(16.8) 5,502( 7.1) 14,810 (11.2)
Fabricated Metal Products 487 2,059( 3.7) 2,177 ( 2.8) 4,236 ( 3.2)
Machinery Manufacturing 443 1,961 ( 3.5) 1,535 ( 2.0) 3,496 ( 2.6)
Electronics and Electrical Products 1,051 8,084(14.6) 35,290 (45.7) 43,374 (32.7)
Transport Equipment 353 6,157(11.1) 5,388( 7.0) 11,545 ( 8.7)
Scientific and Measuring Equipment 84 506( 0.9) 2,212( 2.9) 2,718 ( 2.0)
Others 93 559( 1.0) 181 ( 0.2) 740 ( 0.6)

Total 4,812 55,474 77,152 132,626

42
 Providing An Integrated
Industrial Infrastructure
SUPPORTING PRIVATE
SECTOR INITIATIVES

TYPES
 Industrial Zones
 Special Commercial Premises
 SME Industrial Estates
 Technology Parks
 Industrial Corridors
 Business Premises
43
PUBLIC-PRIVATE PARTNERSHIP e-ENABLE SUPPLY CHAIN MANAGEMENT

• RosettaNet Malaysia - launched in 2002

• Joint initiative by Fed agencies (MITI,
SMIDEC), State agencies (PDC),
Manufacturers Association (FMM), MIMOS
MNCs, SMEs & Solution Providers
• Enables Malaysian suppliers to link to global
E&E supply chain
• Reduce inventory costs, time to market &
lower transaction costs
• No. of companies successfully implemented
RosettaNet Standards increased from 33 in
2004 to 327 in Mac 2006 44
ECONOMIC PLANNING UNIT

ADDITIONAL SLIDES

45
RosettaNet Malaysia Partners include
…
Solution Providers :
Foreign MNCs :
Hewlett-Packard Sales
Microsoft Intel Malaysian Companies :
Oracle Dell LKT Industrial
Penang Network Services Inventec Globetronics
Cardos Automation System IBM Public Packages
KarenSoft Technology* Infineon BCM Electronics
JSP Consulting Fairchild TFS Electronics (Unico)
e-Business Ericsson 1st Silicon
LK Solutions Kemet Polytool Tech
Tradenex.com Seagate Leong Bee Soo Bee
B2B Commerce LSI Logic Ire-Tex
NDT Software Consulting
D’nonce
SCS Computer Systems
SAP Malaysia* San Yong Enterprise
Formfill Australasia Federal Packages
Dagang Net Genting Sanyen
Logistics Providers:
NEC
Priority Cargo
BGlobal
MnEBay
GridNode
Advanced Professional (India) Associations & Clubs:
Rank Alpha
FMM
Sterling Commerce
J.D. Edwards Government:
PeopleSoft MIMOS,MITI,SMIDEC,PDC, MECM, EPU
Novell
Global EXchange
 ICT & Multimedia Hub: MSC Milestones
Milestones

Attain leadership in the

1996 2003 2010 2020

Knowledge Based
Phase 1 The MSC: Next Leap Phase 3

Economy
Create the MSC Grow MSC into a global Transform Malaysia into a
ICT hub knowledge society

• 1 Corridor • Web of corridors

• Bill of Guarantees • 4,000 MSC Status & 250 MSC • All of Malaysia
Global companies.
• • 500 world-class companies
50 world-class • 100,000 new jobs & RM69 bil
companies revenue & RM2.5 bil exports • Global test-bed for new
• Launch 7 flagship • Enhance ICT industry cluster multimedia applications
applications • Enhance multimedia • International CyberCourt of
• World-leading applications Justice in MSC
framework of • Leadership towards
cyberlaws harmonized global • Become net ICT
framework of cyber laws exporter
• Cyberjaya as world-
leading intelligent city • Link to world leading • Cybercities/cybercentres
intelligent cities linked to global information
highway
47
MSC Phase 1

48
 MSC Next Leap (2004 – 2010)
Rollout MSC Cybercities/Cybercentres….

Kulim Hi-
Tech Park

Bayan Lepas,
Penang

49
Flagship Applications

50
 Companies in MSC

INSOURCE OUTSOURCE
Services delivered internally Partner with external provider

• Telekom Malaysia • User: BCB

• Petronas • Provider: EPIC-I (EDS) LOCAL

Target
Shared Services
Market
Pooling of
resources to
render common
Global services cost-
/Offshore effectively,
leveraging on
economies of
scale 51
• Malaysia is ranked 3rd globally for global
outsourcing location attractiveness
• Well developed, low-cost infrastructure and
strong government support
• Created 8,000 high-value job opportunities in MSC
• SSO MSC created 12,000 jobs by end of 2005

Source: A.T. Kearney’s2004 Offshore Location Attractiveness Index: Making Offshore Decisions
52
 Factor Conditions for Growth of MSC &
Public-Private Sector Collaboration
SUPPORTING PRIVATE

Firm Government commitment

SECTOR INITIATIVES

 Comprehensive package of incentives

 Bill of Guarantees
 Infrastructure
 Cyberlaws
 Incentives
 Competitive cost of doing business
 Emphasis on human capital development
Cont… 53
 Cont…

Factor Conditions for Growth of MSC &

Public-Private Sector Collaboration
SUPPORTING PRIVATE
SECTOR INITIATIVES

 Effective Institutional Mechanisms for Policy

Directions, Implementation, Monitoring &
Coordination
 International Advisory Panel

 Implementation Council

 Dedicated ‘one-stop’ agency – Multimedia

Development Corporation (MDeC) with

investor-friendly mindset to facilitate
private sector investment
54
 Bill of Guarantees
• Provide a world-class physical and information
infrastructure
SUPPORTING PRIVATE
SECTOR INITIATIVES

• Allow unrestricted employment of local and

foreign knowledge workers
• Ensure freedom of ownership by exempting
companies with MSC Status from local
ownership requirements
• Give the freedom to source capital globally for
MSC infrastructure, and the right to borrow
funds globally
• Provide competitive financial incentives,
including no income tax for up to 10 years or
an investment tax allowance, and no duties on
import of multimedia equipment
55
Cont…
 Bill of Guarantees
Cont…

• Become a regional leader in intellectual

property protection and cyberlaws
SUPPORTING PRIVATE
SECTOR INITIATIVES

• Ensure no Internet censorship

• Provide globally competitive
telecommunications tariffs
• Tender key MSC infrastructure contracts
to leading companies willing to use the
MSC as their regional hub
• Provide an effective one-stop agency –
Multimedia Development Corporation
56
 Biotechnology Industry Cluster
• Position biotechnology as a new engine of growth &
PUBLIC-PRIVATE PARTNERSHIP

wealth creation
• Transform and enhance value creation of the
agriculture sector through biotechnology
• Capitalise on strengths of biodiversity to commercialise
discoveries in health-related products
• Ensure growth opportunities in industrial bio-processing
and bio-manufacturing
• Establish R&D centres of excellence and accelerate
technology development via strategic acquisitions
• Build human resource capability
• Create an enabling financial, legislative and
institutional framework
• Foster greater public-private sector collaboration
through Bio-Nexus network 57
 BIOTECHNOLOGY ACTION PLAN
PHASE I PHASE II PHASE III Competitiv
(2005-2010) (2011-2015) (2016-2020) e&
Capacity Global Leading
Science to
Biotech
Building Business Business
Industry
 HR Development  Develop expertise  Consolidate
 Est. Advisory and in drug discovery Strengths and
Implementation Councils & devt. Capabilities in
 Est. Biotechnology Corp.  New Products Technology
 Capacity Building in R&D  Technology  Further Develop
 Develop Agricultural, Acquisition Expertise in Drug
Healthcare and Industrial  Intensify FDI Discovery and Devt.
Biotechnologies & participation  Leading Edge
Bioinformatics  Intensify Spin-off Technology Business
 Develop Legal and IP Companies  Create greater value
Framework  Strengthen Local through Global
 Regional Biotechnology and Global Brands Malaysian Companies
Hubs  Develop  Re-branding of
 Develop BioNexus Capability in BioMalaysia as Global
Malaysia as a brand Technology Hub
 Promote FDI participation Licensing
 Initial job and industry  Job Creation
creation
 Generating New Sources of Growth
Growth Areas Competitive Advantage

• Agro-biotechnology • Strong Government support

– Higher value added crops • Well established agro and
medical research base
and foods
• One of 12 mega diversity
– Natural products countries
• Health-Biotechnology • Create niche market
– Bio-Generics • Built upon local capability
– Diagnostics
– Vaccines
• Industrial Biotechnology • Demand for green
– “Green” Chemistry technology applications
– Biocatalysts • Potential/new markets e.g.
EU
– Biomaterials • Environmental concerns
– Bio-Manufacturing
59
 Bio-Nexus Network

IAB IPN
UPM/MARDI Dengkil

Agro-bio Healthcare-bio

Industry NINPVB
Bio-Nexus Enstek, Nilai

Industrial-bio Natural Products

Vaccines

Food Cluster Genome Centre

UKM
Interactions between
institutions & industry
Platform Technology 60
 Financial Services Cluster
Labuan IOFC
PUBLIC-PRIVATE PARTNERSHIP

• 5,152 offshore companies from 93

countries
• LOFSA – a one-stop agency
• Promoting Labuan as a unique IOFC
with specialization in Islamic financial
products & services
• Strengthening legislation & guidelines
• Enhancing competitiveness to sustain
attractiveness
• Incentives to attract strong foreign
entities with global market linkages
61
 Palm Oil Industrial Cluster (POIC)
• Lahad Datu POIC - to add value to the oil
PUBLIC-PRIVATE PARTNERSHIP

palm industry, create jobs & business

opportunities
• Designated palm oil industrial cluster &
logistic hub for east ASEAN
• Developed by POIC Sabah Sdn. Bhd. with
support from Federal Government
• Equipped with adequate physical
infrastructure to attract private investment
in upstream & downstream industries

62
 Halal Hub
• Development of halal product industry
PUBLIC-PRIVATE PARTNERSHIP

cluster to capture the growing share of the

world halal market potential
• Credibility and worldwide recognition of
JAKIM’s halal certification system and logo
• Availability of needed resources and strong
government support
• Establish Halal Industry Corporation
• Provision of various incentives as well as
programmes for improvement in product
quality and standards, training, promotion,
branding & market access
• International M’sia Halal Showcase (MIHAS)
63
 TIGeR’s Supply Chain Model

Global Buyers
Government

1st Tier Suppliers

2nd Tier
Suppliers

Service Providers Govt. Agencies

Horizontal Integration with other
Vertical Integration of local suppliers businesses, services and
government into the GSC