Budget 2018 Backs Trade Development in Malaysia

FRIDAY, OCTOBER 27, 2017, KUALA LUMPUR: Malaysia External Trade Development Corporation (MATRADE) is optimistic that the Budget 2018 announced today will provide the right impetus to increase the participation of Malaysian companies in international trade. The Budget’s policy intent of strengthening MATRADE’s export promotion and export development initiatives will further strengthen Malaysia’s external trade performance.

The budget of RM150 million allocated for MATRADE, Malaysian Investment Development Authority (MIDA) and SME Corp. will be channeled to enhance companies’ market expansion through export promotion activities including for the Market Development Grant (MDG). These export promotion activities will be focused in key markets where Malaysia has Free Trade Agreements with and markets with high demand for Malaysian exports especially in sectors such as Furniture, Electrical & Electronics, Information, Communication and Technology (ICT), Oil and Gas, Food & Beverage (F&B), Construction and others.

In providing financial support for Malaysian companies, RM200 million of credit facility for export will be provided by EXIM Bank to local Small and Medium Enterprises (SMEs) and RM1 billion is allocated for credit insurance for companies. The loan facility amounting RM100 million with 70 percent Government surety to encourage automation among the local furniture companies will definitely boost production for export.

In addition, the budget will also be utilised to enhance the development of Malaysian companies through programmes such as Go-Ex, Bumiputera, Women and Youth Exporters Development Programme (BWYEDP), Mid-Tier Companies Development Programme (MTCDP) and eTRADE Programme.

“It is imperative that the Malaysian exporters community continue to receive strong support from the Malaysian Government through both export promotion and exporters development activities. The Budget announced today will support MATRADE’s continuous efforts in strengthening Malaysia’s trade balance,” said MATRADE’s Chief Executive Officer Ir. Dr. Mohd Shahreen Zainooreen Madros.

“The share of exports in Malaysia’s Gross Domestic Products (GDP) currently stands at 67.7 percent, indicating external trade’s importance to Malaysia’s economy. As such the support to ramp up export-based programmes will ensure we get to sustain Malaysia’s competitiveness globally,” he added.

MATRADE’s initiatives will also be complemented by zero-cost programmes organised in collaboration between MATRADE and other agencies, private sector, business chambers, business councils and trade associations. MATRADE, as Malaysia’s only trade promotion agency under Ministry of International Trade and Industry, will continue adopting smart partnerships so it can facilitate more Malaysian businesses to venture abroad without depending on budget allocation.

In an effort to encourage export among beginner-level and mid-level SMEs, strong emphasis will be put into promoting market access through digital platform by maximizing the potential of the eTRADE Programme. The programme is designed to accelerate Malaysian exporters’ market access by getting them onboard leading global eMarketplaces such as Alibaba.com, eBay.com, Amazon.com, TradeIndia.com, Aladdin.com. and Matahari.com.

As for encouraging more export sales, MATRADE aims to build up industry’s export strength in high-value sectors such as aerospace, petrochemical, automotive parts & components, E&E, ICT, medical tourism and construction services through policy intervention developed by the National Export Council chaired by the Prime Minister YAB Dato’ Sri Mohd Najib Tun Razak. The budget will also lead to more export promotion programmes overseas that will be coordinated by MATRADE’s 47 trade offices in major cities around the world.

In first eight months of 2017 (Jan – Aug 2017), there was unprecedented growth in Malaysia’s trade. Growth has exceeded 20 percent every single month of the year, except for January and June. Malaysia’s total trade breached the RM1 trillion mark in July this year as opposed to September last year. The trade surplus has also been healthy, increasing to RM60.84 billion for the first eight months of 2017. In the same period last year, it stood at RM52.47 billion. This year we are likely to see a slight increase in the trade surplus compared to RM88.15 billion in the whole of last year.

Moving forward, MATRADE will continue to develop strategies that take into consideration the change of global economic landscape in maintaining Malaysia’s healthy trade growth. The strategies will be based on opportunities gained through digitalisation, Industry 4.0, Big Data and technological advancement. “In embracing 2018, MATRADE encourages more players from service oriented and high-technology industries such as aerospace, creative sector and engineering services to internationalise its business. This will be the determinant that diversifies Malaysia‘s capability, beyond traditional industries such as Food & Beverages,” Dr. Shahreen said.

Updated by Corporate Communication Unit

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