Malaysia is urging investors in the UAE and other Gulf countries to tap into opportunities in the Southeast Asian country’s Islamic finance sector, as well as other industries such as agriculture, petrochemicals, manufacturing, tourism and real estate, among others.
Speaking to Alrroya.com during an investments conference in Dubai this week, a senior official of the Malaysian Industrial Development Authority (
Mida) said their country’s decades-old experience in Islamic finance make them an attractive location for companies and individuals seeking to expand their wealth overseas.
“Over the years, we have developed the infrastructure and [professional] expertise to encourage growth in Islamic banking and finance. Almost all banks in Malaysia have a branch dedicated to Islamic finance,” says Azman Mahmud, senior director at Mida’s Non-Resource Based Industries.
Malaysia currently has the
world’s largest sukuk or Islamic bond market, according to media reports, with sales of local currency- (ringgit) denominated bonds totaling to about 9.5 billion ringgit ($3.15bn; Dh11.6bn) from January until mid-April.
This figure recorded a dramatic leap of about 94 per cent from the 4.9bn ringgit sukuk sales in the same period last year. It was also reported that the country’s shariah-compliant bond market has an estimated $79bn in excess liquidity.
Aside from Islamic finance, Mahmud said Malaysia offers vast investment potentials in various fields because it has clear legal framework that protects investors and encourages direct foreign investments.
“We allow 100-per-cent foreign ownership of businesses in several areas. Also, our investor-partners can take advantage of our strategic location in Southeast Asia,” Mahmud said.
The Association of Southeast Asian Nations (Asean), an economic and political bloc comprising of 10 countries, has a combined multi-ethnic population of over 600 million. It is also home to some of the world’s fast emerging markets such as Indonesia, Malaysia, Philippines and Thailand.
Mahmud added that investors can leverage on Malaysia’s strong multi-lateral trade relations and access markets in the Asean, as well as in Asia-Pacific and European countries.
UAE-Malaysia trade ties see strong annual growth
Over the years, Malaysia has enjoyed steadily growing trade ties with the UAE, says Mahmud. Last year, total exports to the UAE from Malaysia have been valued at almost $4bn, rising by a significant 14.89 per cent from $2.93bn in 2009, according to Mida’s records.
Among the main produce exported to the Emirates last year included electrical and electronic products (valued at $1.3bn), jewellery ($1.2bn), palm oil ($422.58 million) and wood products ($153.32m).
Meanwhile, Malaysia’s total imports from the UAE reached $2.5bn in 2010, and this consisted of crude petroleum ($729.4m) and metals ($216m).
From 1980 to 2010, around 21 projects initiated by UAE investors have been carried out in Malaysia, providing 2,930 local jobs. These projects, valued at over $1.2bn, primarily focused on sectors such as metal and petrochemical productions, machinery and equipment supplies and food manufacturing.
Mida, the federal agency that promotes investments in Malaysian industries, is targeting around 83bn ringgit ($27.6bn; Dh101bn) in foreign direct investments (FDI) to the country in 2011, says Mahmud.
Opportunities abound in agriculture
Ravindran Raman Kutty, general manager, Corporate Communications Division of Malaysia’s East Coast Economic Region Development Council (ECERDC), said the Malaysian states of Kelantan, Pahang and Terangganu offer vast opportunities in agriculture, tourism, manufacturing, oil and gas and education.
Agriculture has proven to be a significant venture for countries in the Gulf including the UAE, which has been heavily dependent on food exports. Because of the region’s arid land, dry climate and water shortage, food production continues to be a challenging endeavour.
“The Malaysian peninsula has vast and fertile land. We give a lot of fiscal and non-fiscal incentives to promote agriculture in this part of the country [East Coast]. That’s why we encourage investors to visit Malaysia and see for themselves how they can make it as their agricultural hub,” he said.
Kutty added their agency has been in talks with at least two investors from the UAE and another in Saudi Arabia for possible investments in the Malaysian East Coast.
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