What new initiatives is the Ministry of International Trade & Industry (MITI) focusing on right now?
MUSTAPA: Under the Economic Transformation Programme (ETP), we have twelve National Key Economic Areas (NKEAs) and MITI is responsible for one of them, the Electrical and Electronics sector. The E&E, as we call it, is a very critical component of the Malaysian manufacturing sector. It's the biggest component; biggest in terms of contribution to manufacturing, and biggest in terms of contribution to exports. Exports, for example, about a third of our exports come from this sector.
So Iâ€™m responsible for this big slice of the Malaysian manufacturing sector. Besides that, I have a small chunk of business services under me, for example MRO under the Aerospace sector but that is secondary. The main component that I am responsible for is the Electrical and Electronic sector.
What are your international trade and FDI goals?
MUSTAPA: Firstly, we want to raise Malaysia's profile in the world. We've done that through various efforts undertaken by the Prime Minister, Deputy Prime Minister, and myself as Minister responsible for Trade and Investments. We have gone throughout the world; this year, Asia and Europe, and this is very important. So that's in terms of promotion, raising Malaysia's profile. In many parts of the world, Malaysia is known, but of course, we need to further enhance that visibility. Visibility is important. Secondly, we want to highlight the business-friendly environment we have in Malaysia. We have a government which is very facilitative of business, very pro-business.
We work closely with the private sector, both local and foreign investors. Beyond that of course, numbers are important. Last year for example, we achieved the highest ever FDI for Malaysia, more than $12bn. In the first half of this year, we have done about 45% of that and we believe with all the promotion efforts we have undertaken, we will be able to achieve the same level of FDI as last year, despite the very challenging international economic environment. So, raising Malaysia's profile, weâ€™ve got to work hard, weâ€™ve got to be more creative in terms of promotion, and weâ€™ve got to cover as much ground as possible, not only in the traditional markets but also in some parts of the world which are quite new to us.
How are you selling investors on the idea of investing in Malaysia? What are Malaysiaâ€™s competitive advantages?
MUSTAPA: We have a government which is stable, which is very important. Political stability and certainty in terms of macroeconomic policies, that is crucial for investors to make long-term decisions because these are long-term investments. Number two, infrastructure; we are second to none in our part of the world in terms of highways, ports, and airports. Number three, very good connectivity; if you look at a map, we are in the center of ASEAN. And number four, of course ASEAN is a grouping of ten countries which is growing as a group more than 5% per annum. We are one of the fastest growing regions in the world. ASEAN has a growing population. Now, it's 620 million people, with a growing middle class. So these are some advantages we have. Plus of course, we have incentives which are important, not as important as before, but I would say the biggest asset we have is political stability, certainty in terms of macroeconomic policies, excellent infrastructure and above all perhaps, a government which is very pro-business.
What is MITIâ€™s role in supporting the Islamic economy?
MUSTAPA: We work closely with the World Islamic Economic Forum. Indirectly, we have a very important role to play, but directly we have a role because we are promoting trade and investments. Besides that, I've got the Halal Development Corporation under me. So, we have both a direct and indirect role. The role of HDC, the Halal Development Corporation, is to promote the business aspects of the Halal economy and we have been working on food, we've been working on cosmetics, and pharmaceuticals. Of course, halal is a bigger issue. Islamic banking and finance is being handled by the Central Bank so my responsibility is mainly in the area of food, pharmaceuticals, and also cosmetics.
Beyond that, my role is to promote investments in the halal sector and we have been successful in promoting quite a few. In trade as well, we have developed this methodology to find out how much of our exports are in the halal category. So those are my direct responsibilities. But beyond that, I am involved in a very major, indirect way though, working together with the World Islamic Economic Forum to promote the halal economy. So we see ourselves as playing a pivotal role in promoting the halal economy in Malaysia and in the world. I mean we are trying to spread the message throughout the world through the World Islamic Economic Forum here in Dubai and next year, Inshâ€™allah, in Kuala Lumpur and last year in London of course.
We want to raise Malaysia's profile in the world...In many parts of the world, Malaysia is known, but of course, we need to further enhance that visibility. Visibility is important.
What do you hope to accomplish at the 10th WIEF in Dubai?
MUSTAPA: Dubai is a very exciting and dynamic hub, not only in this part of the world but also throughout the world. It has become a major hub for travel, it has become a major hub for trading, and so Dubai is the place to be. By having the WIEF in Dubai, I think it is very significant for us. It is a gathering of about 3000 people coming from 140 countries; big success. This provides us a very important platform to network with entrepreneurs and companies coming from throughout the world, not only from the Muslim countries but also from non-Muslim countries as well. WIEF is not just for Muslims, it's meant for the world.
So, WIEF has been a very good opportunity for me, as MITI Minister. Not just this particular Dubai WIEF, the one in London last year was also outstanding in terms of contributing to my Ministry's success. So, we've been working closely with WIEF and we have achieved lots of successes here in Dubai and we owe that to the leadership provided by the Prime Minister as well as the WIEF Foundation.
What is your future macroeconomic outlook for Malaysia?
MUSTAPA: Firstly, we want to ensure that Malaysia will become even stronger in terms of macroeconomic stability. We are dealing with a deficit issue, although it's not large by global standards, but nonetheless it is an issue of importance to us, macroeconomic stability. Number two, to ensure that we remain politically stable. And number three, we are looking for high-end activities. We'll be looking for quality investments, knowledge-intensive industries. We cannot possibly compete with countries where cost of labor is very low. We are not in that category any more, we used to forty years ago.
We are developing our talent, our pool of skilled people, and we would like to encourage quality investments, investments which will generate quality employment opportunities. We want to be a high-income economy by 2020 and we want to be a developed nation. Therefore, we have to move up the value chain, weâ€™ve got to encourage knowledge-intensive industries, weâ€™ve got to increase and enhance the skills of our people so that we can encourage investors who come to Malaysia.
So itâ€™s the chicken and egg issue, when we had the supply, the talent pool, of people with the skills required in the industry of course, we'll be in a position to encourage more investments in those sectors which are of high priority to us. Those will be in IT, in high-end manufacturing, financial services, tourism, education, and health care. So these are some activities that we are promoting in the next four or five years and if we are able to do that, which we are confident we will, we'll get there by 2020.