“The investment incentives and facilitations, export related programs and strategic trade networks that are already in place will create a win-win outcome for businesses from the Republic of Korea in Malaysia,” said Ruhizam Idris., director of MIDA Seoul.
In an interview with The Korea Post media, publisher of 3 English and 2 Korean-language news publications since 1985, Ruhizam Idris said, “Both Malaysia and the Republic of Korea will enjoy the mutual recognition of industrial standards and test results of the conformity assessment procedures.
“This will help to reduce the cost of doing business. There is also the need to continuously promote greater transparency in terms of each country’s policies, laws and regulations as well as information sharing.”
The following is the full text of the interview with Ruhizam Idris., director of MIDA Seoul.
Question: Please introduce brief history of MIDA Seoul and major achievement and contribution made to the economic development of Korea and Malaysia to date.
Answer: Malaysian Investment Development Authority (MIDA) was established in 1967 and was hailed by the World Bank as "the necessary impetus for purposeful, positive and coordinated promotional action" for Malaysia's industrial development. Today, MIDA is Malaysia's cutting-edge, dynamic and pioneering force in opening pathways to new frontiers around the globe to invest in Malaysia.
As an agency under Ministry of International Trade & Industry (MITI), MIDA is in charge of the promotion and coordination of industrial development in the country. MIDA is the first point of contact for investors who intend to set up projects in the manufacturing and services sectors in Malaysia.
MIDA, with it headquarter in Kuala Lumpur, Malaysia, has established a global network of 21 overseas offices covering America, Europe and Asia Pacific to assist investors interested in establishing manufacturing projects and services activities in Malaysia. Within Malaysia, MIDA has 12 branch offices in all states in Malaysia to facilitate investors in the implementation and operation of their projects.
The importance of Korean companies to Malaysia has led MIDA to establish its Seoul office in 1980. This office is responsible for the promotion of Korean investments into Malaysia, to provide potential investors with the latest information on policies and opportunities in the manufacturing and services sectors as well as providing the necessary assistance to potential Korean investors that are interested in seeking joint venture partners or technology collaborations in Malaysia.
date, a total of 379 manufacturing projects with Korean participation have been implemented in Malaysia, with investments valued at US$9.26 billion (RM 33 billion). These projects have provided more than 46,300 job opportunities for the country. Republic of Korea is, currently, ranked as the 7th largest foreign investors in terms of implemented project in Malaysia. The presence of Korean investors is exceptionally strong in industries such as electrical and electronics, basic metal, petroleum products including petrochemicals, and chemical and chemical products.
Q: Please let us know your business objectives for this year.
A: MIDA leads the investment agenda for the country and adopts an ecosystem approach whereby concerted efforts have been put in place to promote the entire value chain of industry clusters and enhance delivery enablers to support the value chain.
As the government principal agency for the promotion of investment in the manufacturing & services sectors, MIDA has adopted a more focused and targeted approach in attracting quality investments. The aim of this approach is to generate higher economic returns and growth for individuals and the country, creating a lasting impact on the economy which would lead to a more attractive business environment.
As an investment promotion agency, MIDA also provides end-to-end solutions for investors including approvals for a manufacturing license for manufacturing activities or production facilities., investment incentives, expatriate posts, import duty exemptions and handhold companies to ensure smooth implementation of the project.
MIDA stand with its vision and mission to be the best partner to investors, distinguished by the integrity and professionalism of its people and to ensure Malaysia achieves its goal in economic transformation and its aspiration to become a developed nation.
Q: What do you think is the most important industrial field for Korean companies to invest in Malaysia?
A: Malaysia’s investment policy has always remained liberal and business-friendly in attracting quality investments in the manufacturing and services sectors. To date, more than 5,000 companies from over 60 countries have made Malaysia as their home for investments.
The country continues to adopt the targeted and ecosystem approach to attract quality investments (Greenfield and Brownfield investment).
Malaysia is focusing on the production of high value-added, diverse and complex products through the acceleration of innovation and technology. This will increase the nation’s export capacity and improve market efficiency.
In line with Malaysia’s New Investment Policy (NIP), Malaysia remains resolute in attracting quality investments that incorporates high tech innovation. Thus, Malaysia welcome more investments from the Republic of Korea, particularly in new growth areas of high technology, innovation, knowledge-based, skills-intensive industries and integration with domestic supply chain, to create vast opportunities in providing high income jobs which include in the food production and smart agriculture sectors, with the food security agenda being a pressing issue worldwide.
Q: Please let us know your point of view on how to strengthen further the economic ties between Korea and Malaysia in the years to come.
A: Malaysia and the Republic of Korea celebrated its 60th anniversary of the establishment of diplomatic relations on 23 February 2020. Both countries have had a long-standing economic relationship and Kuala Lumpur and Seoul have enjoy close cooperations in trade and investment, science and technology, higher education as well as tourism. Over the past 60 years, the business relationship between both countries continues to grow as reflected by the increasing number of Korean companies investing in Malaysia.
The Look East Policy (LEP) has allowed us to establish deep and meaningful ties with East Asian economies in particular Japan, Korea and China, which are today, the economic powerhouses with its own strength and global clout. In short, we had faith in the potential of the East long before others did, and these have delivered significant benefits and generous dividends for both our economies. Now, in its 40th years, LEP has been the cornerstone for the close bilateral relations between our two countries, as well as the catalyst in forging closer partnership in, among others, economic, education, cultural and tourism sectors.
Strategically located at the heart of ASEAN, Malaysia remains an attractive investment destination, particularly with a favourable investment environment, including the availability of excellent world class infrastructures, telecommunication services, financial and banking services, supporting industries, skills and trainable workforce, as well as huge market opportunities offered through the 16 Free Trade Agreements that Malaysia has signed. Malaysia maintained its 14 strong position globally, ranking the second-highest in Southeast Asia and twelve (12th) out of 169 countries for trade connectivity in the DHL Global Connectedness Index (GCI) report in 2019”.
Through the ASEAN-Korea Free Trade Agreement (FTA), product, goods and services produced in Malaysia are distributed locally and regionally by taking advantage of the advanced free market system that is created through the elimination of tariffs and non-tariff barriers. Businesses will be able to expand inter-regional exports and enjoy economic of scale through this FTA. Notwithstanding, the creation of a transparent, liberal and facilitative investment region under this FTA could be a boost for Korean investors to consider Malaysia as their preferred investment destination.
Furthermore, Malaysia and the Republic of Korea are signatories of the Regional Comprehensive Economic Partnership (RCEP), which would cover a market of 2.2 billion people, almost 30% of the world’s population. Companies operating or investing in Malaysia, will have an expanded access up to a one-third of global population, sources of raw materials at a more competitive price; as well as an integrated supply chain within its region and participating countries.
Major benefits, among others, are market access and supply chain integration, as RCEP would offer wider market access and the opportunity to be integrated into the regional, and possibly global, supply chain. Companies will have access to a wider and more diverse base of suppliers and raw materials, providing vast opportunities for both, Malaysian and Korean companies and business enterprises, to work together as part of the supply chain, facilitated by respective investment promotion and trade facilitation agencies of both countries.
Apart from those benefits, both Malaysia and the Republic of Korea will enjoy the mutual recognition of industrial standards and test results of the conformity assessment procedures. This will help to reduce the cost of doing business. There is also the need to continuously promote greater transparency in terms of each country’s policies, laws and regulations as well as information sharing.
We are confident that the investment incentives and facilitations, export related programmes and strategic trade networks that are already in place will create a win-win outcome for businesses from the Republic of Korea in Malaysia.