BY FATIHAH MANAF

This economic scenario was not unique to Malaysia . Other regional markets , including prominent players such as China , Indonesia , Singapore , the Republic of Korea ( ROK ), and Taiwan , encountered similar challenges .

Nevertheless , illustrating its proactive stance and resolute determination , Malaysia achieved a significant milestone in 2022 by successfully implementing two major Free Trade Agreements ( FTAs ): the Regional Comprehensive Economic Partnership ( RCEP ) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ).

This accomplishment underscores Malaysia ’ s strategic skill in navigating the complex economic landscape and strengthening global trade ties .

Malaysia is known to be a leading supplier of a wide range of halalcertified products and services , namely food , cosmetics , pharmaceuticals , finance and tourism .”

– Datuk Seri Isham Ishak

RCEP AND CPTPP

“ Malaysia ’ s ratification of the CPTPP last year will encourage demand for Malaysian products as it broadens the country ’ s access to new markets such as Canada , Mexico and Peru , which are not covered by any existing FTAs . Eliminating tariffs improves Malaysian products ’ competitiveness in the CPTPP member countries ,” said Ministry of Investment , Trade and Industry ( MITI ) Secretary-General Datuk Seri Isham Ishak .

He shared that the RCEP agreement was implemented for Malaysia on Mar 18 , 2022 . It helps pave the way for the country to integrate into the world ’ s largest FTA , which involves 15 countries with a population of more than 2.2 billion population .

Isham also pointed out that from January to June 2023 , Malaysia ’ s exports to RCEP member countries experienced a slight decline of 1.7 per cent , totalling RM403.83 billion . In contrast , exports to CPTPP member countries exhibited 2.9 per cent growth , reaching RM225.49 billion .

“ Exports into Mexico increased by 30.4 per cent to RM10.02 billion in January to June 2023 , owing to higher export of electrical and electronic ( E & E ) products , particularly for electronic integrated circuits .

“ Mexico attracted the attention of foreign companies for investment purposes , notably in the E & E sector , as it is located next to the US . Mexico has also signed the United States-Mexico-Canada Agreement ( USMCA ), facilitating exports to the US and Canada . Malaysia , which is highly integrated into the global supply

chain , especially for E & E products , indirectly benefitting from the investments into Mexico .”

FOREIGN AND DOMESTIC DIRECT INVESTMENTS

Malaysia has experienced significant growth and attraction in various industries and sectors regarding foreign direct investment ( FDI ) in recent years . Isham highlighted that the services sector has emerged as a pivotal driver of economic growth and the primary contributor to approved investments in 2022 , with FDI constituting a significant 61.7 per cent , while domestic direct investment ( DDI ) comprised the remaining 38.3 per cent .

During the first quarter of 2023 , foreign investments have predominantly centred around the services sector , accounting for RM24.4 billion ( 65.2 per cent ), followed by the manufacturing sector at RM12.6 billion ( 33.6 per cent ) and the primary sector at RM0.5 billion ( 1.2 per cent ).

“ To capitalise on this growth momentum , Malaysia ’ s economic outlook for 2023 remains favourable . The government maintains high fiscal support to stimulate economic activity and sustain gross domestic product ( GDP ) growth at four per cent this year .

“ Driven by the National Investment Aspirations ( NIA ) and New Investment Policy ( NIP ), the Malaysian Investment Development Authority ( MIDA ) is intensifying its focus on capturing investments in high technology , innovation and research-driven industries .

“ Key sectors with significant economic potential and sustainable long-term growth