Malaysia, being an open economy, is strategically located within Asia Pacific and ASEAN for businesses. The country has grown from a primary commodities exporter to be a strong industrial base for electrical and electronics multinational corporations. It has also emerged as an attractive regional hub for services, logistics and Islamic financial. Besides, the economy is expected to grow at a decent 4.6% in 2018 with a stable environment, improving living standard and affordable purchasing power.
Underpinned by a health macro environment, there are ample opportunities for businesses. The country has advanced nine places to 15th spot among 190 economies worldwide in the World Bank’s Doing Business 2019 Report. Acceleration in reforms in terms of starting a business, dealing with the construction permits, securing electricity, registering property, trading across borders and resolving insolvency has helped improve the country’s ranking.
Hence, there are strong opportunities for New Zealand businesses to further tap into Malaysia, especially with both countries having shared a long and strong trade and educational ties that more than 60 years of diplomatic union. And in 2009, both the countries signed a Free Trade Agreement which has help improved the trade ties due to a strong diplomatic relationship.
Given that Malaysian household income is growing, added with improving lifestyle seeking better quality, it is expected to benefit the food and beverage industry. Improving lifestyle is seen to be supporting health demand for protein, imported fruits and convenience foods alongside with a greater number of gourmet supermarket chains. The rise in e-commerce technology is also seen aiding consumer spending behaviour, besides providing information on the consumer behaviour.
Still on the food and beverages, there are strong opportunities to tap into the “halal” segment. Demand for halal products and services is growing globally. Global halal industry is set to grow between US$3 trillion to US$4 trillion in the next five years, from the current US$2 trillion. A notable driver for the growth is the fact that halal is now moving beyond merely being a mark of religious observance. So it is backed by increasing demand from both Muslims and non-Muslims. Many consumers — be they Muslims or non-Muslims — halal certification today represents a hallmark of reliability, food/product safety and hygiene. With Malaysia’s status as a world leader in the halal economy, it makes the country a clear choice for companies to tap for halal certification to partner with.
Furthermore, halal compliance is set to grow in sectors like supplements, nutraceuticals and even cosmetic products — all of which provide more opportunities for companies to tap into the halal consumer market in Malaysia and expand their businesses throughout the region. With improving lifestyle and spending power by the Malaysians, there are growing demand health care supplements and natural skincare products.
New Zealanders not only enjoy outdoors and golf, motor sports, cycling and water sports like fishing, diving and sailing, but also seem to relish what we have in the way of diverse cultures and the cuisine to match. Malaysia is truly diverse and offers a safe and easily accessible taste of Asia is really appealing to New Zealanders. At the same time, the country is also becoming a center for medical tourism. Thus, there are growing opportunities to focus on specialized private health and medical devices.
Business opportunities prevails in the field of public services delivery. It is through the use of advanced information communication technology (ICT) especially with the new government of Malaysia who is keen to keep on good governance and transparency. With the country moving towards new technology and adopting it in businesses, there are strong opportunities for collaboration. Also in the areas like green technology and climate change. Consultancy services related to tropical farming, dairy livestock and agri-technology equipment is needed given the growing focus by the Malaysian government to develop its dairy industry to become more self-sufficiency in its fresh milk supply.
Demand for better education is growing with parents wanting their children to study at home. More so with the growing middle class, there is a greater appetite for better quality in-country education and less likely to travel for quality education offerings that may cost more. So, transnational education can help host countries upgrade their education systems through international partnerships and offshore campuses or can add options to a regional education hub. The focus is not on revenue but to help broaden and deepen faculty and research links and two-way student mobility. With the increasing focus on ICT in Malaysia, it will help transform higher education to a more enabled online delivery of education anywhere at any time.
As an upper-middle-income nation and with good trade relationship with New Zealand, it creates Malaysia as a favourable destination for business opportunities. With both Malaysia and New Zealand having a close and friendly relationship, it is important for strategic, political, business and economic reasons. This is reflected with Malaysia being New Zealand’s 10th largest bilateral trading partner.
Dr Anthony Dass, Chief Economist/Head, AmBank Research and Adjunct Professor, University of New England, Sydney, Australia