How would you describe the current economic relationship between Britain and Malaysia?
FEATHERSTONE: I think that the political relationship is as good as it’s ever been, and we hope that the economic relationship will develop along with that. We had our Prime Minister here last month, the first visit of that level for 18 and a half years. The message from him was that Britain is back and they are really keen to demonstrate that in all aspects of the relationship, economic as well as political. With regard to trade, the total trade volume between both countries is actually about 4bn Pounds or RM20bn, but that is actually quite small. We only have about 1.1% of the trade in goods, and we would like the UK share of that to grow. When the two prime ministers met, they agreed to double that volume by 2016. So we have set up a working group that is really trying to think of ways of tackling that challenge, sector by sector, and looking at some of the other issues to make sure we really do grow to the extent that this vibrant economy justifies.
What was accomplished during the Prime Minister’s visit to Malaysia?
FEATHERSTONE: During the visit we agreed on a number of new contracts and projects. For example, Life Saver, which is a 60m Pound contract that provides clean drinking water for Malaysia was one of the new deals signed during the visit. There were about 220m Pounds worth of deals, ranging from a number of different sectors, for example the infrastructure and construction sector, projects that were discussed during the visit that we hope will come to fruition very soon. It was a very successful visit on the economic side, and we think there is more still to come.
Which sectors are British companies most active in here in Malaysia?
FEATHERSTONE: We are very strong in a number of key areas. Education is probably our biggest single sector where we have a large number of Malaysian students in the UK, around 13,500. About 45,000 people are studying for British qualifications here, and a whole range of different institutions setting up here. Nottingham University was here about ten years ago, but we now have Southampton, Newcastle, Reading, Marlborough College, and Epsom College, all setting up here in the next year or so. We are also very strong in the oil sector. Malaysia is one of Shell’s largest markets. Petrofac also finds Malaysia their biggest single market. We also have very strong retail players here. Tesco and Jardines are probably two of the three biggest foreign players in the retail sector. Then we have individual companies who are really strong. Dyson, for example, who make vacuum cleaners, fans, and hand dryers, do all of their production here in Malaysia. Not many people know that, but it is an important industrial area for manufacturing for Dyson, as well as these other sectors that I mentioned.
Which sectors still present the greatest investment opportunity?
FEATHERSTONE: We explain to British companies that Malaysia is actually a wide-ranging market. I think it would be wrong to pick out individual sectors to say that only these work well. In general, Britain is stronger in the service sectors, so banking, finance, and insurance are areas where we are very strong. We hope very much to see some more liberalization in the legal sector, which is another area of Britain’s strength. In general, our contribution in terms of service exports is much higher than on export of goods. That is an area, as Malaysia continues to develop, that we expect to see a very strong offering by British companies.
What challenges should British companies anticipate when doing business in Malaysia?
FEATHERSTONE: There are actually a lot of reasons why Malaysia makes a lot of sense for British companies. There is a similar legal system, a similar political system, and English is very widely spoken. There are some challenges, and I think the two most frequently mentioned are skilled workforce and speed of decision making. There are very good, trained workers here in Malaysia, but sometimes companies like Dyson need to grow faster than the local market can provide. The other challenge is just the speed of decision making. Malaysia is definitely getting better at this, but sometimes it takes a long time to get a permit. That’s one of the challenges that British companies often mention to me. Malaysia, right now, is looking to improve its record, and the Malaysian government is working very hard to address those challenges. They have set up an organization called TalentCorp, which is trying specifically to reverse the brain drain and bring graduates back from the UK, US, and Australia, once they finish their studies. They are offering them some very special incentives to come back. So I know that’s an area they’re working on, but there is still some way to go.
With regard to trade, the total trade volume between both countries is actually about 4bn Pounds or RM20bn, but that is actually quite small. We only have about 1.1% of the trade in goods, and we would like the UK share of that to grow.
How are Malaysia and the UK working together to strengthen the Commonwealth?
FEATHERSTONE: The Commonwealth is obviously a very important organization to the United Kingdom, and also to Malaysia. We were absolutely delighted that the former Prime Minister, Tun Abdullah Badawi, was asked to chair an Eminent Persons Group to look at the future of the Commonwealth. They came up with some very good recommendations, some of which were accepted at the last Commonwealth Heads of Government Meeting. Others were remitted to officials to take forward. Last month in London, there were Malaysian representatives, along with UK representatives and others, looking at these 44 recommendations that hadn’t already been accepted. The majority of them were agreed upon. A few were shelved, and others are still to be discussed by ministers. So we are working very closely, at an official level, with our Malaysian counterparts to take forward the Commonwealth and make it into an organization that is really relevant to young people and create a dynamism which goes beyond just having the Commonwealth Games, but reaches out into other areas. We were also delighted last month to have a visit by the DG of the Commonwealth Business Council, who is a British former diplomat. He came and had some very useful meetings with the trade minister here. The trade element of Commonwealth development is something that we are very keen to push forward, and I know Malaysia is too.
What is your future economic outlook for Malaysia?
FEATHERSTONE: This part of the world is growing rapidly; I think about five percent per year. Malaysia, too, is certainly growing at that kind of speed, so our ministers are very keen to develop much closer economic relationships with South East Asia, and Malaysia in particular. This is why we are now having a number of visits. The Prime Minister came last month. We have another cabinet minister coming later this month, and we are really excited that in autumn, the Duke and Duchess of Cambridge, William and Kate, will be making a visit specially to represent the Queen in relation to the Diamond Jubilee. So we feel very busy, but in a good way because we are getting a lot of attention, the attention that this part of the world rightly deserves.