1. 1 Regional Resolution Global Solution 24 AUGUST 2010 DIALOGUE BETWEEN MIDA AND BAR COUNCIL MALAYSIA AND KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION WELCOME TO MIDA Regional Resolution Global Solution Kuala Lumpur Regional Centre For Arbitration

2. DIALOGUE SESSION BETWEEN MIDA AND BAR COUNCIL MALAYSIA AND KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION AGENDA :  Welcome Remarks by Y. Bhg. Datuk Jalilah Baba Director General of MIDA  Remarks by Mr. Ragunath Kesavan President of Bar Council Malaysia  Remarks by Mr. Sundra Rajoo Director of Kuala Lumpur Regional Centre For Arbitration  Presentation by MIDA  Presentation by Bar Council Malaysia  Presentation by Kuala Lumpur Regional Centre For Arbitration Dialogue / Discussion on the possible forms of collaborations between MIDA and Bar Council Malaysia & KLRCA in promoting Malaysia for Investment in the Manufacturing and Services Sectors End of Dialogue Tuesday, 24 Aug. 2010

3. Click to edit Master subtitle style 33 INVESTMENT TRENDS AND OPPORTUNITIES IN MALAYSIA 24 August 2010

4.  Investment Trends  Investment Opportunities in the Manufacturing & Services Sectors Malaysia  10th Malaysia Plan CONTENT OUTLINE :  Empowerment & Corporatisation of MIDA  Introduction  Malaysian Economic & Recent Economic Developments  Regional Economic Corridors in Malaysia 3

5. Malaysian Investment Development Authority  Established in 1967 under Act of Parliament, 1965.  The principal Malaysian Government agency responsible for the promotion and coordination of industrial development in the country.  Formerly known as the Malaysian Industrial Development Authority. Name changed to Malaysian Investment Development Authority effective May 2010.  On 27 March 2004, the Government mandated MIDA to promote investments in the services sector.  First point of contact for investors who intend to set up projects in the manufacturing and services sectors in Malaysia. 4

6. Malaysia: Your Premier Investment Destination 6 2007200820092010 Real GDP (%)6.24.6-1.7 8.9 (2nd Quarter) Inflation (%)2.0 5.40.61.9 Per Capita Income (US$)6,7007,7376,634n.a Unemployment (%)3.33.7 (2nd Quarter) Trade Balance (US$ bil)29.742.633.6 19.1 (Jan - June 2010) International Reserves (US$ bil)101.391.496.795.1* Retained Imports Equivalent (months) 8.47.49.77.8* Malaysia: Your Premier Investment Destination * As at 13 August 2010 Source: Central Bank of Malaysia Department of Statistics MALAYSIA’S KEY ECONOMIC INDICATORS

7. www.mida.gov.my GDP By Industrial Origin Sector GDP Contribution (%) 19701990200020082009 Agriculture 33.619.38.87.57.7 Mining 7.29.86.78.47.9 Construction 3.83.4 3.03.2 Manufacturing 12.826.532.629.626.6 Services 42.642.153.055.057.4 77 Source : Economic Reports / Bank Negara Malaysia (BNM) Annual Report 2009/2010

8. www.mida.gov.my TOTAL APPROVED MANUFACTURING PROJECTS (JAN. – JUNE 2010) Year No. of Projects Proposed Investment (US$ billion) DomesticForeignTotal Jan – June 20104551.762.314.07 20097663.076.489.55 20089194.8213.2318.05 20079498.0110.1018.11 20061,0777.305.7313.03 7

9. www.mida.gov.my APPROVED MANUFACTURING PROJECTS BY INDUSTRY (JAN. – JUNE 2010) Industry No. of Projects Investment (US Million) Electronics & Electrical Products 641,129.3 Basic Metal Products19421.3 Fabricated Metal Products45417.1 Chemicals & Chemical Products 55407.2 Food Manufacturing38347.3 Transport Equipment48302.9 Scientific & Measuring Equipment 10207.9 Rubber Products22213.7 8

10. www.mida.gov.my INVESTMENT IN APPROVED MANUFACTURING PROJECTS BY COUNTRY (2009 – JUNE 2010) CountryJan. – June 20102009 No.Investment (US Million) No.Investment (US Million) Singapore52881.492582.6 Japan20221.7542,058.9 Switzerland3165.0825.1 Taiwan17162.132209.4 China11148.31747.4 Hong Kong4140.671,554.3 USA1194.319685.7 Finland191.2136.2 Thailand483.310.2 British Virgin Islands 280.211109.8 9

11. TOTAL IMPLEMENTED MANUFACTURING PROJECTS AS AT 31 DECEMBER 2009 11 NO. OF PROJECTS IMPLEMENTED INVESTMENTS DOMESTIC INVESTMENT FOREIGN INVESTMENT TOTAL RM MILLION US$ MILLION RM MILLION US$ MILLION RM MILLION US$ MILLION 15,943174,62056,333216,94067,347391,560123,680

12. IMPLEMENTED MANUFACTURING PROJECTS WITH FOREIGN PARTICIPATION BY COUNTRY AS AT 31 DECEMBER 2009 12 COUNTRYNO OF PROJECTS EMPLOYMENTINVESTMENT (RM Million) INVESTMENT (US$ Million) USA27562,31231,0968,518 Japan76475,61427,0677,611 Singapore1,046112,86514,7814,061 Germany14715,66114,6694,005 Netherlands11733,51611,0603,076 Spain51,4444,2071,216 Taiwan5073,86714,1401,116 Korea13310,8543,7481,052

13. IMPLEMENTED MANUFACTURING PROJECTS BY INDUSTRY AS AT 31 DECEMBER 2009 13 INDUSTRYNO OF PROJECTS EMPLOYMENTINVESTMENT (RM Million) INVESTMENT (US$ Million) Electronics & Electrical Products 3,356667,303124,14637,155 Petroleum Products (Inc. Petrochemicals) 19010,41143,06813,969 Basic Metal Products 63250,85936,82911,874 Chemical & Chemical Products 97242,55528,1359,124 Non-Metallic Mineral Products 73552,22221,4607,585 Transport Equipment 94294,81319,7656,138 Food Manufacturing 1,09172,48115,4894,791 Fabricated Metal Products 1,32292,28213,6874,304 Wood & Wood Products 867148,64812,2404,131

14. INVESTMENT OPPORTUNITIES IN MALAYSIA

15. 15 INVESTMENT OPPORTUNITIES IN THE MANUFACTURING SECTOR High technology, capital intensive & knowledge driven industries: Resourced-based industries :  Machinery & equipment  Components & parts  Moulds and dies  Food ( Halal Hub )  Value-added products from oil palm biomass (Particle board, MDF board & Plywood)  Alternative Energy Sources  Biotechnology  Advanced materials  Advanced electronics  Optics and photonics  Petrochemicals  Pharmaceuticals  Medical devices  ICT  Aerospace Industries manufacturing intermediate goods:

16. 16  Regional Establishments  Operational Headquarters (OHQ)  International Procurement Centre (IPC)  Regional Distribution Centre (RDC)  Logistics  Integrated Logistics Services  Cold Chain Facilities  Tourism  Hotel  Tourist project  Recreational camp  Convention centre INVESTMENT OPPORTUNITIES IN THE SERVICES SECTOR

17. 17  Environmental Management  Energy conservation/efficiency  Energy generation, using renewable energy sources  Storage, treatment and disposal of hazardous waste  Recycling of agricultural waste and agricultural by- products  Business Services  Shared services outsourcing  Research & Development (R&D)  ICT Services  Market Support Services  Film & Video Production & Post Production INVESTMENT OPPORTUNITIES IN THE SERVICES SECTOR

18. 18  Education  Technical, Vocational & Science Training  Healthcare Travel (Medical Tourism)  Private hospitals  Wellness Zone INVESTMENT OPPORTUNITIES IN THE SERVICES SECTOR

19. 19 US$ bil 17.1 20.5 15.5 11.2 Total Investments : US$64.3bil Foreign Investment : US$7.9 bil (12 %) Domestic Investment : US$56.4 bil (88 %) Source : MIDA APPROVED INVESTMENT IN SERVICES SECTOR, 2006-2009

20. 20 Source : MIDA APPROVED INVESTMENT IN SERVICES BY SUB-SECTOR, 2006 – 2009

21. 21  Equity Guidelines  100% foreign equity ownership is allowed for manufacturing projects  Guidelines on Repatriation of Profits  No restriction imposed on foreign companies investing in Malaysia on: - Repatriation of capital - Interest - Profits - Dividends INVESTMENT POLICIES

22. 22  Pioneer Status (PS)  Income tax exemption, ranging from 70% to 100% of statutory income for a period of 5 to 10 years  Investment Tax Allowance (ITA)  ITA of 60% to 100% on qualifying capital expenditure for a period of 5 to 10 years  Reinvestment Allowance (RA)  60% on qualifying capital expenditure for 15 consecutive years commencing from the year the first reinvestment is made MAJOR INCENTIVES PROVIDED Source: Malaysian Industrial Development Authority

23. 23 Click to edit Master subtitle style COUNTRY200720082009 % Change (2008/2009) 1SINGAPORE35,77810,91216,80954.0 ↑ 2THAILAND11,3558,5445,94930.4 ↓ 3INDONESIA6,9289,3184,87747.7 ↓ 4VIETNAM6,7398,0504,50044.1 ↓ 5PHILIPPINES2,9161,5441,94826.1 ↑ 6MALAYSIA8,5387,3181,38181.1 ↓ 7CAMBODIA86781553334.6 ↓ 8MYANMAR25828332314.1 ↑ 9BRUNEI26023931130.1 ↑ 10LAOS32422815731.1 ↓ GLOBAL FDI INFLOWS (US$MILLION) WORLD INVESTMENT REPORT 2010

24. 24 9/3/10 APROVED AND ACTUAL FDI FLOWS ON RISING TREND IN RECENT YEARS, EXCEPT FOR 2009 Source: MIDA MIDA’s approvals of FDI shows an increasing trend from 2004 - 2008 Similarly, gross FDI inflows are also on rising trend

25. 25 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 NET FDI FLOWS RELATIVELY STABLE IN RECENT YEARS EXCEPT 2001 AND 2009 Net FDI flows in Malaysia Source: Department of Statistics Malay

26. 26 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 REINVESTED EARNINGS ARE THE MAIN COMPONENT OF NET FDI FLOWS Reinvested earnings as share of profits and dividends of MNCs on declining trend Cumulative gross FDI in the recent decade was mainly in retained earnings Source: Department of Statistics Malaysia

27. 27 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 BROAD-BASED NET FDI FLOWS, MAINLY INTO MANUFACTURING SECTOR BUT INCREASINGLY INTO SERVICES SECTOR, ESPECIALLY INTO FINANCIAL SERVICES Source: Department of Statistics Malaysia 2000-2009 (RM152 bn) Cumulative Net FDI Flows by Sector Manufacturing 41%

28. 28 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 SINGAPORE FDI INFLOW 2000-2008 (US$167.5 bn) Cumulative Net FDI Flows by Sector, Trade/Commer ce 19% More than 70% of FDI in Services Sector

29. 29 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 VIETNAM FDI INFLOW Source: ASEAN FDI Statistics Database 2000-2008 (US$26.1 bn) Cumulative Net FDI Flows by Sector, 2000 – 2008 (USD 26.1 bn) Significant FDIs in Construction, Real Estate and Agriculture/Mining Sectors

30. 30 Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles – Second level Third level – Fourth level » Fifth level 9/3/10 INDONESIA FDI INFLOW Source: ASEAN FDI Statistics Database 2000-2008 (US$167.5 bn) Cumulative Net FDI Flows by Sector, 2000 – 2008 (USD 167.5 bn) Trade/Commer ce 5% FDI mainly in Primary & Financial Sectors

31. 31 10th MALAYSIA PLAN  The 10MP contains a major paradigm shift in government policies to boost private sector participation.  Some of the key economic highlights in the 10 MP are as follows:-  GDP to growth at least 6% a year over the next 5 years.  Private investment to grow at 12.8%.  Private investment to reach US$ 36 billion a year.  Total budget development allocation is US$ 72 billion for the 10MP. Source: Economic Planning Unit, Malaysia

32. 32 NKEAs selected which can materially impact economic growth Greater KL Agriculture Palm oil ICTICT Educatio n Electrical & electronics Oil and gas Touris m Wholesal e and retail Financia l services Business services Healt h ESTABLISHMENT OF 12 NATIONAL KEY ECONOMIC ACTIVITIES (NKEAs) Source: Economic Planning Unit, Malaysia

33. 33 IRDA : ISKANDAR MALAYSIA NCER : NORTHERN CORRIDOR ECONOMIC REGION SCORE: SARAWAK CORRIDOR OF RENEWABLE ENERGY ECER : EAST COAST ECONOMIC REGION SDC : SABAH DEVELOPMENT CORRIDOR REGIONAL ECONOMIC CORRIDORS IN MALAYSIA

34. 34 Logistics, Manufacturing (esp High Tech and aerospace related), Tourism (Luxury Destination Shopping), Cybercity SENAI-SKUDAI Education & Medical Tourism, Entertainment & Recreation, State Administration & Finance Biotechnology NUSAJAYA Cultural and Urban Tourism JB CITY CENTRE Logistics, Regional Distribution, International Procurement TANJUNG PELEPAS Focused Development at Five Flagships 2,217 km2 or 550,000 acres 3 times the size of Singapore 1.4 million population Manufacturing – Electronics,Petroche micals and oleochemical) PASIR GUDANG / TANJUNG LANGSAT ISKANDAR MALAYSIA

35. 35 Area of Coverage : 17,816 sq km  The key Investment Opportunities sectors are :-  Agriculture,  Manufacturing  Tourism & Healthcare  Education & Human capital  Social Development NORTHERN CORRIDOR ECONOMIC REGION (NCER)

36. 36  The key Investment Opportunities sectors are :-  Tourism  Oil, Gas & Petrochemical  Manufacturing  Agriculture  Education EAST COAST ECONOMIC REGION (ECER) Area of Coverage : 66,736 sq km

37. 37  The key Investment Opportunities are :-  Tourism  Logistics  Agriculture  Manufacturing Area of Coverage : 73,997 sq km SABAH DEVELOPMENT CORRIDOR (SDC)

38. 38 SARAWAK CORRIDOR OF RENEWABLE ENERGY (SCORE)  The core of the corridor is the energy resources, particularly hydropower (28,000 MW), coal (1.46 billion tonnes), and natural gas (40.9 trillion square cubic feet) found abundantly within the Central Region. Area of Coverage : 70,709 sq km  The key Investment Opportunities are :-  Oil-based  Aluminum  Metal-based  Glass  Tourism  Palm Oil Timber-based  Livestock  Fishing & Aquaculture  Marine Engineering

39. 39 Steering Committee Chair: Chairman/DG MIDA Committee on Corporatisation of MIDA Committee on Empowerment of MIDA National Committee on Investments (NCI) Delegation of powers Amendments of related Acts Task Force on Investments Adoption of new corporate model Staff benefits and retirement scheme New name and logo Setting of KPI for staff Block budget Working Groups EMPOWERMENT & CORPORATISATION OF MIDA

40. 40 No.Date Tabled Number of Cases Pre- packaged ACI Fast- Track/ Automatic Corrid or ECER Total 371381524331 NUMBER OF CASES Tabled AT NCI

41. 41  8th Greatest Level Of Opportunity To Global Investors - International Business Report 2010 (IBR 2010)  10th For Overall Performance - World Competitiveness Report 2010  10th Most Competitive Economy In 2010 - Institute Management of Development  20th 2010 FDI Confidence Index - 2010 A.T. Kearney FDI Confidence Index  1st For Investor Protection - Forbes Report 2009  23rd For Ease Of Doing Business In 2009 - The World Bank  25th Best Country For Business - Forbes Report 2009  3rd Attractive Location For Outsourcing Destinations - A.T. Kearney Global Services Location Index 2009 MALAYSIA’S INTERNATIONAL RANKINGS

42. 42 9/3/10 Malaysia Competitiveness Ranking- World Competitiveness Report 2010-IMD PARAMETERS 20102009 Economic Efficiency 8th9th Business Efficiency 4th13th Government Efficiency 9th19th Infrastructure Efficiency 25th26th

43. 43 9/3/10  Political & Economic Stability  Pro-business Government  Liberal Investment Policies  Transparent Policies  Strong Banking System  Well Developed Infrastructure  Harmonious Industrial Relations  Trainable & Educated Labour Force  Quality of Life  Good Track Recordood Track Record WHY MALAYSIA ?

44. THANK YOU