Asean Economic Community AEC – 2015 FORUM “ Selangor the Gateway to AEC” An Overview of Opportunities and Challenges 3 rd December 2013 KKSB ASI -1 FMM SELANGOR

KKSB ASI-2 GDP GROWTH RATE (%) FMM SELANGOR *

Malaysia’s Standing 24 th Trading Nation in the World 18 th Most Competitive Country (WEF) 6 th In Ease of Doing Business Strong Banking Institution Ease of Credit Facility (WB) GDP Growth 4% +. KKSB ASI-3 FMM SELANGOR

Malaysia’s Restrictions Limitation of Labour Cost of Labour Cost of Infrastructure Cost of Production Limitation of Specific Raw Materials. KKSB ASI-4 FMM SELANGOR

Business Communities Dilemma Between , Businesses need to deal with: Minimum wage New retirement age GSP removal GST Implementation TPPA MEUFTA AEC Removal of Subsidies. KKSB ASI-5 FMM SELANGOR

Opportunities Under AEC Market Statistics Malaysia Asean Population 30M 600M GDP US$490B US$2300B Per Capita Income US$10,300 US$3,700 Growth 4% >6%. KKSB ASI-6 FMM SELANGOR

Opportunities under AEC Huge market of over 600M Business opportunities: –Growing Market –Rising Middle Class –Higher Per Capita Income –Affluent Lifestyle –Education –Increasing Tourism/Medical Tourism. KKSB ASI-7 FMM SELANGOR

Opportunities under AEC Outsource/shift production to low cost Areas Shifting operations to Raw Materials Source Specialization of production for MNC’s JV for economies of scale. KKSB ASI-8 FMM SELANGOR

SME’s Concerns under AEC Influx of cheap items-through Asean countries Dumping directly or indirectly through Asean Competition from low cost manufactures and service providers. KKSB ASI-9 FMM SELANGOR

KKSB ASI-10 FMM SELANGOR Selangor Towards a Developed State High End Industry/ Services Sector Education/ Tourism/ Medical Tourism Halal Sector Marginal Industry/ Services Sector Opportunities to supporting industry Competition to existing industry Supporting industry Improve efficiency, productivity or move on Complement high end sector J.V –similar, downstream, upstream Huge opportunity Branding. Selangor Gateway to Asean

Asean as a Community Nationalistic sentiments Political stability and policy Legal procedures Language/culture/customs NTB to prevent entry-e.g. quality standard, buy local… KKSB ASI-11 FMM SELANGOR

Asean as a Single Market Command better bargaining power Efficient use of capacity/resources Higher per capita Income Eradicate poverty within Asean Equal opportunity within Asean Balanced growth Ready for open market. KKSB ASI-12 FMM SELANGOR

Business Enhancement Capacity Building for Local SME’s R&D assistance center Quality enhancement to assist SME 3 rd Country Financial Assistance Specific Agency to guide SME’s going abroad. KKSB ASI-13 FMM SELANGOR

Business Enhancement Asean Bureucratic Requirement’s to be simplified Harmonization of Legal, Taxation, Immigration, Customs, Standards… KKSB ASI-14 FMM SELANGOR

How Selangor State can Prepare for AEC  Set up more Industrial Parks, for example, a Halal hub  Ensure all infrastructure & utilities such as water, electricity, high speed broadband are readily available  Are the Ports able to handle the expected higher volume of trade after the implementation of AEC?  Can the State provide investment incentives to both FDI & DDI? KKSB ASI-15 FMM SELANGOR

Final Preparation for a Broader Perspective Implementation should be phased out and implemented at a comfortable phase for all. AEC is broad based and not just a G to G initiative it involves the whole asean community If AEC is successful then we should be ready for the broader perspective. KKSB ASI-16 FMM SELANGOR

Thank You Abdul Samad Ibrahim Vice Chairman and Chairman of the Strategic Policies and Economic Affairs Working Sub-Committee FMM - Selangor KKSB ASI-17 FMM SELANGOR