Services Sector to Drive Malaysian Economy
- Category: Press Releases 2016
FRIDAY, DECEMBER 9, 2016, KUALA LUMPUR: The National Export Council (NEC) laid out several strategies to ramp up the performance of priority services sectors namely construction, Information, Communication and Technology (ICT), education services and tourism. This followed discussions at the fourth and last NEC meeting for 2016 held today.
The strategies include increasing the utilisation of Malaysian construction services in international projects through strategic partnerships between local Small and Medium Enterprises (SMEs) and Multinational Companies (MNCs); driving the exports of ICT Services, ICT Content and Media; enhancing brand visibility of Malaysian education services overseas as well as increasing tourist arrivals.
The strategies are aimed at addressing the deficit registered by Malaysian services sectors since 2010 and are in line with the Services Sector Blueprint launched last year. The recommendations agreed by the NEC are also consistent with the 11th Malaysia Plan (RMK 11), which targeted an increase in export revenue of services sector by more than 40 percent from RM135 billion recorded in 2015 to RM195 billion.
The services sector, which accounts for about 53.9 percent of Malaysia's Gross Domestic Product (GDP), remains a key driver of growth for the Malaysian economy. The contribution of services to GDP is on an increasing trend and by 2020 the contribution of services is targeted to reach 58 percent.
For the construction sector, the meeting discussed strategies to accelerate exports and reduce imports by nurturing local contractors to be more competitive globally, pushing for more Malaysian professional services abroad and forming consortia in winning overseas projects. The Council also emphasised the need for contractors and developers to utilise Malaysian content (products and services) in their local and international projects. In enhancing the profile of Malaysian players in the construction sector, initiatives such as Malaysia Inc. and Large Corporation-SME Partnership Programme will assume a key role to support the industry through close and consistent engagement with relevant stakeholders.
Focus is placed on the exports of ICT Services, ICT Content and Media as both sectors are forecasted to grow by 30 percent by 2019 in ASEAN. The sectors are set to grow at 10.6 percent annually, to reach an export value of RM47.5 billion in 2020. In improving market access, ongoing programmes such as engagement with strategic partners, market immersion and funding facilities will be strengthened.
The Council took note of the Government's plans to increase the number of foreign students in Malaysia through more Government-to-Government engagements and by easing business processes to facilitate the entry of foreign students. Additionally, various promotion and marketing programmes worldwide will be carried out, particularly in high-value markets such as the Middle East and China. By 2025, foreign students in the country are expected to reach 250,000 from 153,328 recorded in June 2016 (latest info).
The meeting also emphasised on attracting more tourists from China, India and the Middle East in particular the middle class and professionals with high spending power. The access to e-visa application among tourists overseas will also be improved. Complementing this, the Council agreed for digital marketing to be a key medium in promoting Malaysia as a preferred tourist destination.
In supporting and facilitating the development of the services sector, the Government has provided a number of initiatives and facilities such as the Services Export Fund, Mid-Tier Companies Development Programme and Go-Ex as well as export promotion activities. These will address specific needs of export-ready services firms not only through funding opportunities but other support measures such as consultation, market research and intelligence, as well as export promotion.
The NEC, introduced in December 2014, is chaired by YAB Prime Minister of Malaysia Dato' Sri Mohd Najib Tun Abdul Razak. The Council, with MATRADE as its secretariat, is tasked with formulating strategies to drive Malaysia's exports and to build an ecosystem conducive to the development of Malaysian industries. The NEC meets four times a year and its first meeting next year will take place sometime in the first quarter of 2017.
