Thursday, 7 September 2023
Wednesday, 6 September 2023
NIMP 2030 Sets Breakthrough Agenda, poised to attract more investments
IT is a pivotal moment for Malaysia’s industrial development.
Malaysia’s manufacturing sector has to accelerate the Fourth Industrial Revolution, taking advantage of smart technologies to move its production base up the value chain while conforming to environmental, social and governance and meeting net-zero target.
Amid increasing geo-economic complexity and the escalating impact of climate change, Malaysia needs a new generation of sustainable industrial transformation to lever up the economy to sustain resilient and competitive advantage internationally.
The manufacturing sector remains one of the primary engines of growth (2022: 24.1% of gross domestic product or GDP: 84.2% of total exports and 16.8% of total employment) and had expanded at steady rate of 4.8% per annum in 2015-2022 (4.9% per annum in 2011-2015).
The New Industrial Master Plan (NIMP) targets to increase the manufacturing sector’s value-added by 6.5% per annum to RM587.5bil by 2030 (RM364.1bil in 2022); employment growth of 2.3% per annum to 3.3 million in 2023 (2022: 2.7 million persons); while median salary will increase by 9.6% per annum to RM4,510 in 2030 (2021: RM1,976).
The country has prematurely deindustrialised since early 2000s, mainly due to increased global competition and slow progress in moving up the value chain.
Malaysia’s Economic Complexity Index ranking (24th in 2021), which indicates the productive capability of an economy, was lagging behind advanced economies (first for Japan, fourth for South Korea and sixth for Singapore); other developing regional peers are fast catching up (29th for Thailand); and labour productivity growth has moderated and stagnated (2.3% per annum in 2013-2022).
Our regional peers are receiving more foreign direct investment (FDI) inflows in recent years.
During the period 2017-2022, Malaysia registered FDI inflows of US$9.4bil per year compared to US$96.4bil per year for Singapore, US$20.9bil per year for Indonesia and US$15.8bil per year for Vietnam.
The Philippines is catching up fast (US$9.2bil per year) while Thailand’s FDI has dwindled to US$7.1bil per year.
The NIMP 2030 sets the breakthrough agenda for Malaysia’s manufacturing sector’s next take-off in the new green industrial age.
The NIMP maps out a comprehensive industrial direction, strategies and enablers with the aim of positioning Malaysia for new growth catalytic sectors and industries in the decades ahead.
The NIMP 2030 calls for a “Whole-of-Nation” approach and adopts a mission-based approach to drive the manufacturing transformation in four ways:
> Advancing economic complexity,
> Tech-up for a digitally vibrant nation,
> Pushing for the net-zero target, and
> Safeguarding economic security and inclusivity.
The master plan will chart a new generation of sustainable industrial policies, underpinned by four enablers, 20 strategies and 56 action plans.
Domestic manufacturing industries have to strengthen their resilience and competitiveness to counter operational challenges caused by geo-economic conflicts that disrupt supply chains, resource scarcity that threatens energy and utilities security, and adverse climate change disruptions.
The identified five pivotal sectors are:
> Electrical products and electronics,
> Chemical and chemical products,
> Advanced materials,
> Aerospace, and
> Healthcare (including medical devices and pharmaceuticals).
All industries will be driven strategically to embrace these four missions for reconstructing and developing a solid and sustainable manufacturing sector and also for exporting resilience.
The services sector must also move up the value chain to support the manufacturing sector.
While the lead agencies and parties involved were identified to implement the mission-based projects, accountability and responsibility are therefore critical to ensuring a successful implementation of the mission-based projects.
We need a strong accountability to ensure alignment and coordination among the stakeholders and parties to clearly define the project scope and deliverable.
Roles and responsibilities across ministries on investment issues tend to be unclear and sometimes lack co-ordination.
Hence, an effective implementation of a one-stop centre is a crucial investment facilitation mechanism whereby relevant ministries and government agencies are coordinated at a single point to provide prompt, efficient and transparent services to investors to shorten and simplify administrative procedures and guidelines ultimately, thereby removing bottlenecks faced by both local and foreign investors in establishing and running businesses in Malaysia.
Investment climate reforms are necessary. While the government has made efforts on transparency, the rule of law, weeding out corruption and strengthen the quality of institutions, they have not been sufficiently consistent to improve investor confidence and ensure responsible business practices by both foreign and domestic companies.
The government has to bolster collaborations between the federal government, state governments and local authorities to facilitate investment.
We support the Investment, Trade and Industry Ministry’s efforts to streamline the 31 Investment Promotion Agencies, with the Malaysian Investment Development Authority leading the way.
Domestic direct investment (DDI), especially by micro and SMEs (MSMEs), are crucial for supporting industrial ecosystem.
The inclusion of DDI as a key performance indicator is a positive step to facilitate and raise the quality of domestic investment.
MSMEs should be provided with opportunities to gradually scale up their industries through horizontal and vertical integration as well as to embrace green practices.
This necessitates capital investment in advancing technological and digitalisation capabilities, ensuring an ample supply of highly skilled and knowledge-based human capital, and more importantly, access to financing, grant and development fund.
It is estimated that a total of RM95bil will be invested throughout seven years to implement NIMP, predominantly coming from the private sector.
We support the action plans to mobilise the financing ecosystem (financial institutions and capital market), including the introduction of the NIMP Strategic Co-Investment Fund and NIMP Industrial Development Fund to support strategies, action plans and mission-based projects as well as for industries and businesses, especially MSMEs.
However, the NIMP did not provide an estimation of the amount of financing and funds needed to support the industrial transformation.
As SMEs often encounter challenges in accessing financial resources and credit facilities, it is therefore necessary to broaden the range of financing instruments available to SMEs and entrepreneurs, by improving understanding about a full range of financing instruments they can access in varying circumstances, and by encouraging discussions among stakeholders about new approaches and innovative policies for SMEs and entrepreneurship financing.
For SME green facilitation, we proposed:
> The creation of a web-based tool in partnership between the industry associations and environmental regulator to provide free environmental guidance to SMEs; and
> The provision of an ESG assessment toolkit to guide SMEs embark on their ESG journey by identifying gaps in their management system based on the 12 ESG indicators identified.
Manpower and integration with technology is integral for the industrial transformation. Swift action must be taken to review and address the manpower planning and development programmes.
These include the supply of skilled manpower; adaption; and reskilling and upskilling of workers that are future proof, including the hiring of foreign talent to supplement domestic pool of workforce.
The quality assurance of Technical and Vocational Education Training has to be revamped and enhanced.
We support the implementation of the multi-tier levy model to reduce over-dependency on low-skilled foreign workers, but the levy must not be too steep during the transition period as it would be significantly burdening the employment and operating costs of MSMEs.
The implementation of Progressive Wage System on a voluntary basis and incentive-based approach for MSMEs for the skill set categories along with the minimum wage must be productivity-linked.
We support the action plans to drive promotional activities of Free Trade Agreements (FTAs), including the Regional Comprehensive Economic Partnership (RECP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and export consortia, given the low utilisation rate and awareness among the business community.
We propose:
> The design of a tariff finder to support traders to maximise benefits from the RCEP and CPTPP to help businesses, to get up-to-date information on the preferential tariffs and the rules of origin criteria used to determine a product’s eligibility for preferential tariff treatment, and
> The setting up of a one-stop advisory centre for all FTA-related enquiries from businesses; gather feedback on tariffs and non-tariffs issues for better trade and investment facilitation.
Strategic planning is hard but the real challenge is execution. Without a careful and planned approach to execution, strategic goals cannot be attained.
Hence, we need a pragmatic approach to monitor and track the progress of the proposed action plans and mission-based projects; and make timely interventions and facilitation across collaborations between ministries and agencies as well as provide resolutions to achieve the deliverables.
- Lee Heng Guie is Socio-Economic Research Centre executive director. The views expressed here are the writer’s own.
NIMP 2030 Sets Breakthrough Agenda For Manufacturing ...
NIMP 2030 poised to attract more investments
PETALING JAYA: The current investing focus on environmental, social and governance (ESG) and sustainability will likely help the New Industrial Master Plan 2030 (NIMP 2030) attract further targeted investments into the country.
The plan also appears to aim to capitalise on the opportunities from the recent shift in investments away from China due to the global trade tensions.
According to CGS-CIMB Research, the NIMP 2030 is a comprehensive plan, noting that the government appears to understand the limitations and hurdles of the current industrial setting such as the reliance on cheap foreign labour and low research and development adoption.
“If this strategy works, ESG-conscious companies could be more interested in investing in Malaysia such as Tesla.
“We also see a new set of industries being emphasised, in particular electric vehicles (EVs) and carbon capture, utilisation and storage, which capitalise on Malaysia’s existing strength and advantages,” CGS-CIMB Research said.
However, it also noticed certain sectors were receiving less emphasis than in previous plans such as biotechnology, although pharmaceutical, a subset of biotechnology, was highlighted in the report.
“A few policy suggestions in the NIMP 2030 are not new, for instance, the multi-tier levy system for foreign workers, which has been delayed, given the pushback by industry players. Hence, successful execution is key,” it said.
“Thus far, the NIMP 2030 certainly improves the long-term prospects for gross domestic product (GDP) growth, but we maintain our 2023 GDP growth forecast at 4% year-on-year and 4.6% in 2024,” the research house added.
Meanwhile, UOB Kay Hian (UOBKH) Research said it believes the electrical and electronics (E&E) industry is poised to be the largest beneficiary of the plan.
“The NIMP 2030 is a catalyst for trade diversion for foreign direct investment, the creation/entrenchment of regional champions, and new emerging industry clusters such as EV and renewable energy (RE),” UOBKH Research said.
It noted the E&E industry, which accounts for some 40% of the country’s exports, is poised to grow further from the NIMP 2030 catalyst.
“The well-strategised plan targets to enhance the sector’s value-add, employment and wage dynamics by deepening the economic complexity of the supply chain, upskilling and support for small and medium enterprises,” UOBKH Research said.
“While we await the granularity of incentives and rollouts, our top manufacturing picks include Cape EMS Bhd, Inari Amertron Bhd and NationGate Holdings Bhd,” UOBKH Research said.
These companies are noted for their alpha growth on strong visibility of better order loadings from their new and key customers from the supply chain reconfiguration amid the trade diversion, it said.
For the outsourced semiconductor assembly and test players, it likes Inari for its strong growth trajectory premised on its new flagship programme, inventory replenishment and the fruition of its new business collaboration.
Other companies such as Greatech Technology Bhd are noted for their solid order-book backlogs with more than 50% exposure to the high-margin EV and RE sectors alongside their unique value proposition while other beneficiaries include packaging company L&P Global Bhd, it said.
Meanwhile, Hong Leong Investment Bank Research said the NIMP 2030 is a positive move, but noted the key to its success will depend on the strong cooperation across multiple key stakeholders that cuts across federal and state governments as well as agencies.
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Tuesday, 5 September 2023
Watch out for new mutant strain, Omicron Subvariant BA.2.86, nicknamed Pirola
PETALING JAYA: The BA.2.86 subvariant of the Covid-19 virus, known as Pirola, has not landed in Malaysia yet but this newly-detected, highly-mutated variant of Omicron has raised concerns in countries such as the United States and Britain.
Public health expert Datuk Dr Zainal Ariffin Omar said the BA.2.86 subvariant was highly infectious and could easily spread.
As such, he urged the public to get a booster shot and complete their recommended vaccination schedule.
Universiti Kebangsaan Malaysia professor of public health Prof Dr Sharifa Ezat Wan Puteh said the subvariant might be potentially more transmissible because its spike protein could undergo up to 30 mutations.
However, she said some experts were of the opinion that it might just pass us by without having a significant effect.
“Treatments such as antivirals like Paxlovid are still efficacious with current strains. Even if people get reinfected by BA.2.86, the immune memory will still allow their immune system to kick in and control the infection far more effectively as many have received their booster doses.
“The current advice is still the same – get your boosters, wear masks in public spaces, wash your hands and maintain good ventilation. It is expected that new vaccines against the new strains will be available soon,” added Prof Sharifa Ezat.
Universiti Putra Malaysia’s associate professor of virology Dr Chee Hui Yee said it was still too early to conclude how dangerous the subvariant was as only some 31 genomic sequences of the Pirola variant had been recorded with the Global Initiative on Sharing All Influenza Data.
“Close monitoring and observation are needed and I would like to suggest for Malaysia to do whole genome sequencing on more recent samples to track the variant,” she said.
“We can live our lives as usual, but take more precautions when travelling overseas.”The subvariant has also been found in wastewater samples in several countries, including Britain and Thailand.
First found in Denmark in July, the subvariant has also been detected in South Africa, Portugal, Thailand, Sweden, Switzerland and Canada.
The United States is also expecting updated versions of Covid-19 vaccines that have been tweaked to enable the body to ward off the current variants. In the meantime, Britain is fast-tracking its flu and Covid-19 vaccination drive for care home residents and those immunocompromised as a precautionary measure.While studies are ongoing to ascertain the traits and the effects of Pirola, sore throat, cough, headaches and a runny or blocked nose are said to be some of the symptoms.
On Aug 30, the US Centers for Disease Control and Prevention (CDC) said it was monitoring the Pirola variant, adding that it was still too soon to ascertain its impact and degree of transmissibility.Based on an examination of Pirola’s mutation profile, the CDC said treatments such as Paxlovid, remdesivir and molnupiravir would be effective.
In the Yale Medicine Bulletin published on Aug 31, infectious disease specialist Dr Scott Roberts said the strain had been detected in at least six countries and that the cases were unrelated.
This, he said, suggested that there was some degree of transmission in the international community that had not been detected.Dr Roberts said with a greater degree of herd immunity as a result of infection and vaccination, the world was not as vulnerable to severe illness or infection from the coronavirus as it was at the height of the pandemic in 2020.
“Since the original version of SARS-CoV-2, many people have got infected, and many have been boosted. However, for many of us, it might have been a year or more since we’ve had a booster, so I would encourage everyone to get the updated shot, which is expected to come out in mid-September,” he added.
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NIMP 2030 is the ‘key to the future’
KUALA LUMPUR: High-value job opportunities are among the focuses of the newly launched New Industrial Master Plan (NIMP) 2030 as Putrajaya seeks to expand the middle class, says Prime Minister Datuk Seri Anwar Ibrahim.
He said global trends such as the rising role of IR4.0 technology, climate change and sustainability practices, demographic shifts and the globalisation of value chains are changing the nature of jobs.
ALSO READ: Govt urged to do its share
“Skills transformation is key to developing future competencies and this has been set as a focus of our industrial strategy,” he said when launching the NIMP 2030 at Menara Miti here yesterday.
Anwar said the NIMP 2030 will see the implementation of a progressive wage system that promotes skill development and career advancement.
ALSO READ: Manufacturing sector set to get a boost
“Public-private collaborations will be enhanced in the TVET (Technical and Vocational Education Training) and STEM (Science, Technology, Engineering and Mathematics) programmes, ensuring the acquisition of skills required by the industry,” he added. Anwar said the government’s Economy Madani framework and NIMP 2030 are both aligned in their focus on improving the lives of the people through projected higher returns from the national economic targets.
“This includes employment with meaningful wages and wealth-sharing to build a more equitable and prosperous society,” he said.
Anwar also said employment will see a projected growth of 2.3% from 2023, which is set to provide employment for 3.3 million people by 2030.
ALSO READ: ‘Whole of nation’ approach to drive manufacturing
“The industry’s growing employment trajectory is due to the creation of high-skilled jobs as the country advances towards higher value-added activities and via improvements in automation and technological advancements,” he added.
Most importantly, said Anwar, through interventions under NIMP 2030, the median salary for the manufacturing sector is expected to grow to reach RM4,510 from RM1,976, which is below the national average.
“This 128% increase from 2021 will be driven by the shift of the industry towards higher value-added activities and the high-skilled job opportunities being created,” he said.
Anwar also said the NIMP 2030 will create more opportunities for local small and medium enterprises (SMEs) to grow through specific action plans. He said SMEs in manufacturing currently contribute only 8% to the GDP (gross domestic product) and 9% to exports.
For a more prosperous society: Anwar (centre) launching the NIMP 2030. He is flanked by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi (left) and Tengku Datuk Seri Zafrul. — Bernama
“There is a lot of potential to grow our SMEs in manufacturing, in line with our Economy Madani aspiration to strengthen firms of all sizes,” he said, adding that the plans to develop SMEs’ capacities will enable them to be positioned higher in the global value chain.
“This, in turn, will help them scale up into mid-tier companies that could help Malaysia make more foreign exchange earnings.”
Anwar also said he was made to understand that the International Trade and Industry Ministry will launch a new framework in a few weeks to build SMEs’ environmental sustainable goals (ESG) capacity.
“This is important to ensure SMEs’ continued participation in ESG-compliant multinational vendor ecosystems and continued access to ESG-sensitive export markets,” he added.
The NIMP 2030 outlines Putrajaya’s plans to transform Malaysia into a high-tech, industrialised nation.
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Friday, 1 September 2023
US seeks more stable China business landscape
Speaking with Shanghai Communist Party chief Chen Jining on day four of a bridge-building trip to China, Raimondo said a “stable economic relationship is good for America, good for China and good for the world”.
“The US-China economic relationship is among the most consequential in the world,” she told Chen.
Raimondo told Chen she was looking forward to talks to “bring about a more predictable business environment, predictable regulatory environment, and a level playing field for American businesses here in Shanghai”.
US firms in China have long complained about what they see as an unfair business environment, with limited protection for intellectual property and preferential treatment afforded to domestic competitors.
Those fears have been compounded this year by a broad crackdown on US consulting firms operating in China.
A new anti-espionage law, which came into force on July 1, has also spooked foreign and domestic firms as they try to decipher authorities’ intentions and, crucially, pinpoint what is off-limits.
In a Tuesday meeting with Vice Premier He Lifeng in Beijing, Raimondo raised what Washington sees as unfair trade practices by China, according to a US Department of Commerce statement.
She also emphasised the “importance of strengthening the protection of trade secrets for US businesses operating in China”.
The commerce secretary is one of a number of senior US officials to visit China in recent months – part of an effort by Washington to improve its working relationship with its largest strategic rival.
Raimondo has used the trip to seek more open discussions with the Chinese over restrictive trade curbs and the two sides have agreed to set up a working group to iron out the laundry list of trade disputes between them. — AFP
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