Turning Point for the Electrical and Electronics (E&E) Industry in Malaysia? Part 2

Media Statement by Dr. Ong Kian Ming, Deputy Minister of International Trade and Industry (MITI) on the 30th of July, 2019

In part 1 of my media statement, I explained the importance of the E&E industry to the larger Malaysian economy and how this sector has evolved over time.[1] In Part 2 of my statement, I will highlight some of the key challenges and opportunities for this sector in Malaysia in the context of global trade and economic uncertainties.

  • Capturing new and higher value-added investments from existing players

An investment by a new company worth RM100m, especially if it is a well-known global brand, can generate more publicity in Malaysia compared to a re-investment by an existing player worth RM1 billion. In some ways, this is understandable given our larger fascination with new, bright shiny objects compared to older and duller toys, so to speak. But as the saying goes, “a bird in hand is (sometimes) worth two in the bush” meaning to say that we should not forget the importance of existing players while we aggressively pursue new investments.

Many of the existing players in the E&E industry in Malaysia are well-known multinational companies (MNCs) with operations in many countries. And these companies can choose between various locations, including Malaysia, for their future expansion plans. The attractiveness of tax and other related incentives would be one the factors influencing global HQ investment location decisions. The challenge here is for the respective management teams in Malaysia to make a pitch to their global HQs for these new investments in competition with their colleagues from other countries. The pushback from the Malaysian authorities which the local teams are facing is to show that their investments involve higher value-added products and processes deserving of new incentives.

Continue reading “Turning Point for the Electrical and Electronics (E&E) Industry in Malaysia? Part 2”

Turning Point for the Electrical and Electronics (E&E) Industry in Malaysia? Part 1

Media Statement by Dr. Ong Kian Ming, Deputy Minister of International Trade and Industry (MITI) on the 30th of July, 2019

The report in June 2019 that Apple was mulling a 15-30% supply chain shift out of China and that Southeast Asia was a potential relocation destination created a lot of media interest in Malaysia.[1] What could the Malaysian government do in order to pull some of these investments onto our shores? How ready is our local E&E industry to capture part of Apple’s value chain? Which companies could be potential beneficiaries? These questions are part and parcel of a larger debate regarding the E&E sector in Malaysia. The industry is facing a turning point in its development, and the US-China trade war has created a unique window of opportunity which can catalyse the development of the entire industry in Malaysia for decades to come.

Contribution to the Economy

Before we delve into the future prospects of the E&E industry, it is important to contextualise the current role which this sector plays in the Malaysian economy. The E&E sector’s contribution to the overall health of the country’s economy goes far beyond its 5.4% share of GDP in 2018 (RM78b out of a RM1.4 trillion economy). It is BY FAR, the largest driver of exports in Malaysia. 38.1% of the almost RM1 trillion in exports in 2018 came from the E&E sector. Manufactured petroleum products comes in at a distant 2nd with 7.7% of total exports in 2018.

It is also a DISPROPORTIONATE contributor to the nation’s trade surplus. Out of the RM120.5b trade surplus enjoyed by Malaysia in 2018, 99% or RM119.2b was generated by the E&E sector. Without the contribution of the E&E sector, Malaysia would have experienced the ‘twin deficit’ phenomenon – a budget as well as a trade deficit and this would likely have had an effect on foreign investor confidence. Many would be surprised to learn that Malaysia’s largest export to China is not palm oil or agriculture or petroleum products but products from the E&E sector. This is also one of the few sectors where Malaysia enjoys with trade surplus vis-à-vis China.

Continue reading “Turning Point for the Electrical and Electronics (E&E) Industry in Malaysia? Part 1”

Thank you Dr. Ramasamy for your reminder to deliver on Pakatan Harapan’s GE14 Manifesto Promises

Media Statement by Dr. Ong Kian Ming, Member of Parliament for Bangi and Assistant National Director for Political Education for the Democratic Action Party (DAP) on the 1st of July, 2019

In my speech on the 28th of June, 2019 at the launch of the IDEAS 2nd Project Pantau Report card, I asked the public to continue reminding Pakatan Harapan of our GE14 Manifesto promises so that we will continue to feel the pressure of delivering on our promises before the next general election. I also mentioned that one of the most vocal groups of people in reminding the government of our GE14 Manifesto promises is our PH backbenchers through various internal channels. I failed to mention that some of our own state assembly representatives (ADUNS) are equally vocal in their reminders, albeit through more public channels.

I would like to thank Deputy Chief Minister of Penang, Dr. Ramasamy of his latest reminder that it is “not too late to deliver on PH’s election promises!” published on his Facebook page.[1] As much as I appreciate Dr. Ramasamy’s reminder, it would have been a more constructive note if he could have systematically gone through the very detailed report card produced by IDEAS which evaluated the progress which Pakatan Harapan had made on 224 sub-promises found in the manifesto[2] instead of merely responding to a headline in a Malaysiakini article.[3] His Facebook note does not do justice to the extensive work done by IDEAS and the fact that IDEAS statement on the ‘unrealistic’ promises found in the manifesto was directed at a SMALL number of promises namely the target of 1 million affordable houses in 10 years and setting the income contingent level of PTPTN loan repayment to start at RM4000 per month.

Continue reading “Thank you Dr. Ramasamy for your reminder to deliver on Pakatan Harapan’s GE14 Manifesto Promises”