ASEAN ECONOMIC COOPERATION MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY

HOTEL TRADERS PENANG| 28 JUNE 2012

CONTENTS OF THE PRESENTATION The presentation will cover 3 main areas: Malaysia in the Global Economic Environment ASEAN as a Global Hub

AEC and its Implications to Malaysia

MALAYSIA IN THE GLOBAL ECONOMIC ENVIRONMENT 25 LARGEST EXPORTER (2011)

TOP 30 EXPORTER AND IMPORTER OF COMMERCIAL SERVICES

27 LARGEST IMPORTER (2011)

LEADING TRADING NATION

FOREIGN TRADE POLICY Committed to progressive liberalisation of the Malaysian economy and strong supporter of multilateral trading system (WTO) China, Japan, Korea, India and New Zealand Chile, Pakistan, India, New Zealand, Australia EU, Transpacific Partnership Agreement (TPP), GCC and possibly with Korea and Bangladesh

External Dimension

NATIONAL TRANSFORMATION Government Transformation Programme (GTP)

Economic Transformation Programme (ETP)

Effective Delivery Of Government Services

New Economic Model – A High Income, Inclusive & Sustainable Nation

January 2010

March 2010

Political Transformation Repeal/Amendment  Internal Security Act (ISA) Printing Press Publication Act (PPPA)  Emergency Ordinance September 2011

ASEAN ECONOMIC COMMUNITY (AEC) 2015 & DYNAMIC ASIA FTAs AND TRADING ARRANGEMENTS

MALAYSIA’S ECONOMIC DEVELOPMENT JOURNEY

2011

Technology Intensive Export-Oriented & LabourIntensive

1990s 1980s 1970s

1960s Import Substitutio n

Innovation , ETP & High Income

Resource-Based & Heavy Industries

2000 Economic Corridors & Services

ASEAN AS A GLOBAL HUB

ASEAN ECONOMIC COMMUNITY (AEC) 2015

ASEAN CHARTER (ADOPTED DECEMBER 2008)

Shift from a consensus-basedapproach to rules-based organisation. Structured organisation to meet the emerging challenges to ensure ASEAN’s relevancy in the global environment.

Builds the concept of “ownership” by the people of ASEAN.

ASEAN AS A GLOBAL PLAYER ASEAN

CHINA

INDIA

Population (million)

592

1,341

1,190

Land Area (million km2)

4.5

9.6

3.3

GDP (US$ billion)

1,859

5,980

1,600

GDP Per Capita (US$)

3,124

3,163

1,369

Exports (US$ billion)

1,074

1,510

245

Imports (US$ billion)

968

1,440

350

Exports as % of GDP

57.8

25.2

15.4

Imports as % of GDP

52.1

24.1

21.9

GDP Growth (%)

7.5

10.3

8.5

Source: ASEAN Secretariat (2010 Figures)

ASEAN’S EXTERNAL TRADE COUNTR Y Brunei Cambodi a Indonesi a Lao PDR Malaysia

Myanmar Philippin es Singapor e

EXPORT 2008

2009

IMPORT 2010

2008

2009

TOTAL TRADE 2010

2008

2009

2010

CHANG E 20082010 (%)

7.8

5.9

8.3

1.3

1.1

1.2

9.1

7.0

9.5

4.4

4.0

4.3

4.8

2.8

2.4

3.2

6.9

6.7

8.0

15.9

109.8

91.9

124.4

88.2

69.1

88.5

198.0

161.0

212.9

7.5

0.1

0.24

1.3

0.3

0.2

0.6

0.41

0.5

1.9

144.1

116.5

148.7 109.6

91.6

120.3

253.7

208.1

269.0

6.0

2.8

3.1

3.9

2.1

1.8

2.2

4.8

4.9

6.1

27.1

42.0

32.5

39.9

42.3

34.0

42.0

84.3

66.5

81.9

(2.8)

363.4

229.7

188.2 259.9 245.0

186.7 249.4

474.7

374.9

509.3

7.3

Thailand

135.5

120.0

107.0

283.2

227.0

294.1

3.8

Viet Nam TOTAL

51.8 727.6

103.8 130.3 1,160.4 1,523.0

16.4 6.7

151.0

147.7

48.1 61.8 60.1 55.7 610.74 804.0 699.4 549.6

NOTE: ALL FIGURES ARE IN US$ BILLION

143.1

68.5 111.9 719.0 1,427.0

ASEAN’S INTERNAL TRADE EXPORT

IMPORT

TOTAL TRADE

COUNTRY

2008 Brunei Cambodi a Indonesi a Lao PDR

2009

2010

2008

2009

2010

2008

2009

2010

CHANG E 20082010 (%)

2.5

1.1

1.2

1.2

1.3

1.2

3.7

2.4

2.4

35.1

0.3

0.6

0.7

1.6

1.5

1.7

1.9

2.1

2.4

26.3

27.2

24.6

33.3

41.0

27.7

47.1

68.2

52.3

80.4

17.9

0.7

1.0

3.6

1.49

1.48

1.42

2.2

2.5

5.02

128.8

Malaysia

50.4

40.4

50.6

34.7

31.7

45.0

85.1

72.1

95.6

12.3

Myanmar Philippin es Singapor e

3.9

3.2

3.7

1.7

2.1

2.0

5.6

5.3

5.7

1.8

7.1

5.8

11.6

14.3

11.6

16.3

21.4

17.4

27.9

30.4

108.5

81.6

111.3

74.8

59.0

78.7

183.3

140.6

190.0

3.7

Thailand

39.5

32.5

44.3

29.9

26.8

39.3

69.4

59.3

83.6

20.5

Viet Nam TOTAL

10.0 250.1

8.6 10.3 19.5 13.6 16.3 199.4 270.3 220.2 176.8 249.0

29.5 470.3

22.2 26.6 376.2 519.62

(9.8) 10.5

NOTE: ALL FIGURES ARE IN US$ BILLION

FDI FLOWS TO ASEAN BY COUNTRY OF ORIGIN SOURCE Japan USA Canada EU China India Korea Australia New Zealand ASEAN Others TOTAL

2006 10,715.3 3,112.2 -646.4 8,744.5 1,071.8 -284.6 1,304.0 295.1 -254.3 7,946.9 17,511.7 50,343.7

2007 9,540.2 5,077.4 -166.9 14,055.1 1,097.0 681.6 2,757.8 989.5 44.6 9,502.2 17,967.6 62,299.7

NOTE: ALL FIGURES ARE IN US$ MILLION

2008 4,657.8 5132.6 799.4 9520.1 2109.5 698.6 1583.5 919.7 (165.1) 10,461.5 13,694.1 49,411.7

2009 5,308.4 3,357.7 310.9 7,297.2 1,509.5 983.6 1,421.8 700.9 239.9 4,428.9 13,898.8 39,457.6

CUMULATIVE (2006–2009) 30,217.7 16,679.9 297.0 39,616.9 5,787.8 2079.2 7,067.1 2,905.2 -134.9 28,354.3 63,072.2 215,742.4

FDI INFLOWS INTO ASEAN HOST COUNTRY Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam ASEAN Total

2007

2008

2009

2010

CUMMULATIVE (2007-2010)

260

239

370

629

1,498

815 539 9,318 4,877 228 319 7,248 1,381 976 579 1,544 1,963 8,589 15,279 8,539 4,976 9,579 7,600 47,076 37,881

783 13,304 333 9,156 N/A 1,713 35,520 6,320 8,000 75,758

867 6,928 324 8,538 715 2,916 37,033 11,330 6,739 75,650

NOTE: ALL FIGURES ARE IN US$ MILLION

3,004 34,427 1,214 26,323 2,270 8,136 96,421 31,165 31,918 236,365

ASEAN POPULATION & DIALOGUE PARTNERS

ASEAN IN THE GLOBAL ECONOMY 2010 (GDP) China $5,750b

ROK $986.2b

Japan $5,068b

India $1,430b

ASEAN $1,859b

Australia and New Zealand $1,354. b

ASEAN GLOBAL CONNECTIVITY

Source : ASEAN Secretariat

17

ASEAN COMMUNITY 2015

MAIN COMPONENTS OF AEC Single Equitable Market and Economic Production Developmen Base t 4 Main Pillars : Integration Competitive into the Economic Global Region Economy

MAIN ELEMENTS OF AEC ASEAN ECONOMIC COMMUNITY

Strategic Schedule SINGLE MARKET AND PRODUCTION BASE

COMPETITIVE ECONOMIC REGION

EQUITABLE ECONOMIC DEVELOPMENT

INTEGRATION INTO THE GLOBAL ECONOMY

SME development

Coherent Approach towards External Economic Relations

Free flow of goods Competition policy

Free flow of services

Free flow of investment

Consumer Protection

Initiative for ASEAN Integration (IAI)

Intellectual Property Rights

Freer flow of capital

Infrastructure development

Free flow of skilled labor Taxation

Priority Integration Sectors e-Commerce

Food, Agriculture and Forestry

Human Resource Development

Research and Development

Enhanced participation in global supply networks

AEC KEY PRIORITIES Enhancing physical & non-physical connectivity – Aviation, maritime & land transport Integration of the services sector Enhancing trade facilitation – operationalization of the ASEAN Single Window

Elimination of non-tariff barriers Promoting inclusive and sustainable growth – SME development Enhancing regional economic partnership with dialogue partners – ASEAN+FTAs

AEC initiatives are on track and member states are committed towards achieving AEC in 2015

FREE FLOW OF GOODS

ASEAN-6 : 0% Tariff (2010) CLMV

: 0-5% Tariff (2015)

FREE FLOW OF SERVICES

Signed in 1995

- to enhance and strengthen cooperation among service suppliers in ASEAN; and

- progressively liberalise trade in services among ASEAN countries through reduction / elimination of restrictions.

EQUITY TARGETS AND PARAMETERS PRIORITY SECTORS

Value US$ Million

End date for Liberalisation Foreign (ASEAN) equity participation

e-ASEAN (ICT), Tourism, Healthcare

Logistics

NON-PRIORITY SECTORS

2010

2013

2015

- 49% by 2006 - 49% by 2008 - 51% by 2008 - 51% by 2010 - 70% by 2010 - 70% by 2013 -

30% by 2006 49% by 2008 51% by 2010 70% by 2015

* construction: not less than 51% by 2006

MRAs MRA

DOWNLOAD

SIGNING DATE & VENUE

Engineering Services

http://www.asean.or g/18009.htm

9 December 2005, Kuala Lumpur, Malaysia

Nursing Services

http://www.asean.or g/19210.htm

8 December 2006, Cebu, Philippines

Architectural Services

http://www.asean.or g/21137.pdf

Framework Agreement for http://www.asean.or the Mutual Recognition of g/21137.pdf Surveying Qualifications

19 November 2007, Singapore

MRAs MRA

DOWNLOAD

MRA Framework on Accountancy Services

http://www.asean.o rg/22225.htm

Medical Practitioners

http://www.asean.o rg/22231.htm

Dental Practitioners

http://www.asean.o rg/22228.htm

SIGNING DATE & VENUE

26 February 2009 Cha-am, Thailand

ASEAN COMPREHENSIVE INVESTMENT AGREEMENT  Main objectives: (ACIA) to create a free and open investment regime to achieve economic integration  A more comprehensive Agreement: Covering 4 pillars i.e. liberalisation, protection, facilitation and promotion Inclusion of additional provisions Improvement of existing provisions  A total of 49 Articles, 2 Annexes, and 1 Schedule (reservation list of Member States)

HIGHLY COMPETITIVE ECONOMIC REGION ASEAN to enhance cooperation in new areas: competition policy; consumer protection; intellectual property rights; infrastructure development; and taxation and e-commerce.

ASEAN CONNECTIVITY APSC

ASEAN Community AEC

ASCC

Enhance rules and Enhance integration Enhance the wellgood governance for and competitiveness being and livelihood ASEAN of ASEAN of ASEAN peoples Narrowing the Development Gaps People-toPeople Connectivity Physical Connectivity

Resource Mobilisation ASEAN Connectivity

Institutional Connectivity

ASEAN CONNECTIVITY

KEY STRATEGIES FOR ENHANCED ASEAN CONNECTIVITY KEY STRATEGIES TO ENHANCE PHYSICAL CONNECTIVITY Strategy 1

Complete the ASEAN Highway Network

Strategy 2

Complete the implementation of the Singapore Kunming Rail Link (SKRL) project

Strategy 3

Establish an efficient and integrated inland waterways network

Strategy 4

Accomplish an integrated, efficient and competitive maritime transport system

Strategy 5

Establish integrated and seamless multimodal transport systems to make ASEAN the transport hub in the East Asia region

Strategy 6

Accelerate the development of ICT infrastructure and services in each of the ASEAN Member States

Strategy 7

Prioritise the processes to resolve institutional issues in ASEAN energy infrastructure projects

KEY STRATEGIES FOR ENHANCED ASEAN CONNECTIVITY KEY STRATEGIES TO ENHANCE PEOPLE-TO-PEOPLE CONNECTIVITY

Strategy 1

Promote deeper intra-ASEAN social and cultural understanding

Strategy 2

Encourage greater intra-ASEAN people mobility

KEY STRATEGIES FOR ENHANCED ASEAN CONNECTIVITY KEY STRATEGIES TO ENHANCE INSTITUTIONAL CONNECTIVITY STRATEGY 1

Fully operationalise the three Framework Agreements on transport facilitation

STRATEGY 2

Implement initiatives to facilitate inter-state passenger land transportation

STRATEGY 3

Develop the ASEAN Single Aviation Market (ASAM)

STRATEGY 4

Develop an ASEAN Single Shipping Market

STRATEGY 5

Accelerate the free flow of goods within ASEAN region by eliminating barriers to merchandise trade within the region

STRATEGY 6

Accelerate the development of an efficient and competitive logistics sector, in particular transport, telecommunications and other connectivity-related services in the region

STRATEGY 7

Substantially improve trade facilitation in the region

STRATEGY 8

Enhance border management capabilities

STRATEGY 9

Accelerate further opening up of ASEAN Member States to investments from within and beyond the region under fair investment rules

STRATEGY 10

Strengthen institutional capacity in lagging areas in the region and improve regional-sub-regional coordination of policies, programmes and projects

RESOURCE MOBILISATION  Traditional Funding Sources: 

Multilateral Development Banks

(MDBs) 

Bilateral development partners



Regional/global funds and facilities



Technical assistance from ASEAN Dialogue



Partners and other external parties



National Government Budgets

RESOURCE MOBILISATION 

New and Innovative Sources:  Private individuals and businesses  ASEAN Infrastructure Fund (AIF) financed by ASEAN Member States and ADB



Private-Public Partnerships (PPPs)



Regional & Domestic Capital Markets

CROSS FLOWS OF INVESTMENTS IN ASEAN Direct Investment by Malaysia in ASEAN

YEAR 2011 : 2010 : 2009 :

INVESTMENTS RM25,775 MILLION RM24,754 MILLION RM16,058 MILLION

Source: Bank Negara Malaysia

CROSS FLOWS OF INVESTMENTS IN ASEAN Direct Investment by ASEAN Countries in Malaysia

YEA R 2011 : 2010 : 2009 :

INVESTMENTS RM21,680 MILLION RM15,675 MILLION RM15,756 MILLION

Source: Bank Negara Malaysia

OPPORTUNITIES TO MALAYSIAN BUSINESS COMMUNITY 

A Single Integrated Market offering increase business opportunities for trade in goods, services and investment, through:  removal of import tariffs and non-tariff barriers for trade in goods;  liberalisation of the services sector covering all 4 modes of supply and removal of market access limitations  creating a liberal investment regime



Serve as a production base for regional and international market

OPPORTUNITIES TO MALAYSIAN BUSINESS COMMUNITY 

Enhance competitiveness and efficiency by expanding domestic production facilities for the larger markets:

OPPORTUNITIES TO MALAYSIAN BUSINESS COMMUNITY Undertake outsourcing activities and specialisation of production

Relocate and rationalisation of business operations Enhance Malaysian service providers competitiveness and capacity Employment and business opportunities for Malaysian service providers

OUTREACH PROGRAMMES Seminars/Briefings/Workshops. Establishment of FTA Service Units in MATRADE, MIDA and SMIDEC MITI Website provides Malaysia’s FTAs

latest

updates

on

Conduct Surveys to ascertain level of awareness amongst stakeholders of FTAs and their benefits derived.

CONCLUSION Economic Dynamism

AEC

Sustained Prosperity Inclusive Growth

Integrated Development of ASEAN

THANK YOU

ASEAN ECONOMIC COOPERATION MITI Fax

:

03 - 6201 9799

E-mail

:

[email protected]

l MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY, MALAYSIA l ALL RIGHTS RESERVED

l