The MIDA Touch: Expertise and Efficiency When Investing in Malaysia
For the sake of expediency, almost everything in Malaysia is reduced to acronyms. MIDA, short for Malaysian Industrial Development Agency, is the government’s principal agency for promoting and coordinating industrial development in Malaysia. It acts as a promotion agency for Malaysia as an investment destination.
Fostering multinational corporations (MNC) as clients, MIDA takes care of the many practical aspects of entering the market, such as work permits, customs issues and building plan approval. Its goals are to make the investment process as seamless and as streamlined as possible, providing expertise at the highest levels.
MIDA, together with the Ministry of International Trade and Industry (MITI), is committed to improve legislation and regulation regarding investment activities while the Government’s Economic planning unit looks at the overall strategy.
In actual fact, the Malaysian economy continued to forge ahead in 2006 with a registered GDP growth of 6 percent during the first three quarters of 2006 compared to 5.2 percent for the whole of 2005.
Through Malaysia’s Third Industrial Master Plan (IMP3), implemented in 2006 and due to end in 2020, the country aims to achieve global competitiveness through innovation and transformation of the manufacturing and services sectors while contributing to other development aims of the Ninth Malaysian Plan (2006-2010).
Nevertheless Malaysia’s “value proposition” is facing increased competition from countries like China, India and Thailand where labor costs are lower, an area in which Malaysia can no longer compete. According to Rafidah Aziz, Minister of International Trade and Industry, “For Malaysia to continue as a center for industrial activity, we will need to further improve competitiveness by changing the way we do things.”
The plan is to “move up the value chain” and step up the international supply chain. This involves competing on quality and specialization. The move is a departure from churning out large quantities of simple, mass produced items and a move to promote specific sectors as outline in the Ninth Malaysia Plan (9MP).
This plan builds on existing strong performers, such as health care manufacturers and pharmaceuticals. The government has recognized the benefits of health tourism and has embarked on various programs to promote Malaysia as a health tourism destination.
The recently created biotechnology corporation is encouraging international players to use Malaysia as a research & development (R&D) base. Agriculture and agro-related industries have also received a big push as the government seeking to make Malaysia a leader in halal food products.
Multinational corporations from more than 60 countries have invested in over 3,000 companies in Malaysia’s manufacturing sector, attracted by the professional business environment which has made the country one of the world’s top locations for offshore manufacturing operations. Many of them have re-invested in multiple projects.
One of the many multinationals that have seen results is Aglient Technologies. Agilent Technologies started its operations 29 years ago in Penang as Hewlett-Packard Malaysia. Since then, its investments have continued to grow and are estimated to reach RM3.7 billion by 2001.
Given the quality of the Malaysian workforce, the high level of education; add to that its commitment to carry through on projects, and Malaysia becomes a very attractive proposition.
