Familiarisation Programme for Officials of Investment Promotion Agencies of the South-South Countries, 6 – 15 August 2009, Kuala Lumpur

The Malaysian Industrial Development Authority (MIDA) organised a “Familiarisation Programme for Officials of Investment Promotion Agencies (IPAs) of the South-South Countries” at Renaissance Hotel, Kuala Lumpur from 6 to 15 August 2009.

This annual event, which is co-sponsored by the Economic Planning Unit (EPU) under the Malaysian Technical Cooperation Programme (MTCP), is aimed at sharing Malaysia’s experience in promoting foreign, domestic and cross border investments and fostering closer ties through networking and sharing of experience among participating countries.

YBhg Tan Sri Dato’ Soong Siew Hoong, Executive Adviser of ACCCIM and Executive Committee Member of MASSA presented a paper on “Malaysia’s Private Sector’s Experience in Investing Abroad” to the government officials of IPAs on 12 August 2009.

Doing Business with Mexico at ACCCIM’s Office, 13 August 2009

YBhg Tan Sri Dato’ Soong Siew Hoong, as Executive Advisor to ACCCIM and EXCO member of MASSA, received a delegation from Mexico at his office at ACCCIM on 13 August 2009.

The Mexican delegation was led by H.E. Ambassador Mrs Lourdes Aranda, Deputy Foreign Minister of Mexico. Also at the meeting was H.E. Ambassador of Mexico to Malaysia, Mr Jorge Alberto Lozoya and Mr Solomon Sacal, Director for New Markets of PROMEXICO.

PROMEXICO is a Government Institution tasked with expanding Mexican exports as well as coordinating and promoting Foreign Direct Investment into Mexico.

JICA Training Course for African Nations on “Facilitating Trade and Investment in the Indian Ocean-rim Economic Region” from
30 August – 6 September 2009

The Japan International Cooperation Agency (JICA) conducted a week long training course in Malaysia for officials engaged in trade and investment related work from Kenya, Uganda, Mauritius, Mozambique and Tanzania.

The training course was to expose the officials to the economic development of Malaysia, its efforts to facilitate Trade and Investment in Malaysia, to share successes as well as enlighten them on the problems encountered. The officials visited MASSA on 2 September 2009 and were briefed on the objectives and activities of MASSA by its Executive Secretary, Ms Ng Su Fun.

Seminar on Business Opportunities in Venezuela and Malaysian-Venezuelan Business Roundtable, 1 July 2009

The Embassy of the Bolivarian Republic of Venezuela and the Bank of Foreign Trade BANCOEX organised a seminar on business opportunities in Venezuela and a Malaysian- Venezuelan Business Roundtable on 1 July 2009 at Westin Hotel, Kuala Lumpur.

This successful event was also held in conjunction with the Fourth Venezuelan Week in Malaysia.

MASSA Networking Luncheon with Latin American Embassies in Malaysia,

16 September 2009

MASSA organised a networking luncheon with 10 Latin American Embassies in Malaysia, namely Argentina, Brazil, Colombia, Cuba, Chile, Ecuador, Mexico, Peru, Uruguay and Venezuela on 16 September 2009 at Delicious Restaurant @ Dua Residency, Kuala Lumpur.

This ‘informal’ luncheon was held to enable MASSA to get acquainted with the respective representatives, especially the Trade and Commercial officers of the respective Embassies to develop and to facilitate stronger business ties between MASSA members and the business community from these Latin American countries.

Introduction

Applying for licences, permits or approvals is part and parcel of running a business, especially when you’re about to start up a new one. Not sure where to begin? Fear not, there’s BLESS to the rescue!

BLESS (short for Business Licensing Electronic Support System) is an online one-stop service centre for companies or individuals who wish to apply for a licence/approval/permit to start a business in Malaysia.

Besides providing information on business licensing in Malaysia, BLESS offers a variety of processing services for the submission, approval and tracking of the issuance of business licences. Centralised information for analysis, future planning and service improvements can easily be obtained through the BLESS portal.

The advantages of BLESS at a glance:
• Lets you apply for more than 100 licences from participating government agencies.
• Features simultaneous processing and updating by respective agencies.
• Provides composite and standardised forms for quicker and easier processing.
• Facilitates online submission, approval, enquiries, tracking and  monitoring.
• Allows you to identify relevant licences required for any business.
• Offers a feedback tool should you require further assistance or encounter a problem.

Business made simple

BLESS is based on the Malaysian government’s service delivery concept of ‘one service, one delivery, no wrong door’ that ensures ease and convenience to all. With its implementation, the following initiatives will be in place to simplify various licence application and submission processes.

1. One-stop centre and online application
   With BLESS, you don’t need to submit your application at various counters of licensing agencies. You can now submit your application from the office or anywhere else just by using your computer. Multiple applications for licence/approval/permit may be submitted simultaneously.
2. Sharing of information between CCM and BLESS
   A company’s profile is entered only once in BLESS when applying for various types of licence/approval/ permit. That simply means you don’t need to fill in this information again and again as these details can easily be accessed from the Companies’ Commission of Malaysia (CCM) automatically. To ensure the accuracy and authenticity of a company’s profile, BLESS has integrated its system with CCM to allow general information on the company’s profile to be transferred automatically to BLESS.
3. Online communication
   BLESS has an online communication platform, so that licensing agencies can communicate directly to applicants for licence application status. This helps save a lot of time and resources for everyone.
4. Online payment
   BLESS also allows you to make payment online via credit card and FPX (direct debit). So you don’t need to go to the counters at the respective licensing agencies to make payment.
5. Improvements in procedures
   With the implementation of BLESS, various procedures have been simplified. For example, you no longer need to obtain a No Objection Letter (NOL) from the local government as the Malaysian Industrial Development Authority (MIDA) will help you obtain the NOL on behalf of your company. The procedures involved in obtaining views from technical government agencies have been simplified and are carried out simultaneously to allow feedback to be obtained within a stipulated time.
6. Online tracking on status of application
   BLESS also lets you track your application’s status and progress online. You will get to know instantly if your application has been processed and whether it has been approved.

The realisation of BLESS

BLESS was launched on 5 September 2008 by then Prime Minister of Malaysia Y.A.B. Tun Abdullah Haji Ahmad Badawi. Its implementation is spread over three phases. Phase I was completed in June 2009.
The scope for each phase is as follows :

Phase I:Development of the manufacturing, construction and hotel sectors with implementation within the Klang Valley
Phase II:Development of other sectors and integration with agencies’ internal systems
Phase III:Nationwide roll out (except for Sabah and Sarawak)

The implementation of BLESS is expected to be completed by end 2013. Other sectors to be covered under the two phases include the tourism, health, education & training and logistics & distributive trade sectors.

In the future, BLESS will include companies registered under the Registrar of Business (ROB), the renewal of licences/ approvals/permits and the integration of BLESS with the respective agency’s existing systems.

A Step-by-step Guide to BLESS:

To register as a BLESS user:
Step 1: Visit www.bless.gov.my
Step 2: Click on ‘Apply Business Licence Here’.
Step 3: Click on ‘To register with BLESS’.
Step 4: Fill up the registration form.
Step 5: Get the BLESS activation notification email.

To apply for licences:
Step 1: Log in at www.bless.gov.my with your BLESS account ID.
Step 2: Select the licence required using the Submission Module and complete the form.
(The company’s profile will be retrieved automatically in real time from SSM and presented in a pop-up menu)
Step 3: Once the form has been completed, click on the submit button.
Step 4: Applicant will receive notification of approval and information on method of payment via email.
Step 5: After the approval is obtained, the licence will be issued upon payment (if required).

Qualitas is a large well-integrated network of general practice clinics that is dedicated to providing cost effective, high quality outpatient medical care with supporting diagnostics services to our community, families and individuals. Its founder Dato’ Dr. Noorul Ameen along with his colleagues saw the need for an integrated, well organised primary healthcare network in the private sector in Malaysia and established the protocol for Qualitas.

With a well-distributed and equipped network of primary healthcare clinics, manned by well trained doctors and personnel, a patient’s requirement for routine ailments and preventive care will be met. Referrals to secondary and tertiary care centres are only made for further management when necessary. With this Qualitas believes that healthcare cost can be contained for patients and payors.

Qualitas’ doctors have a wide range of interests and comprehensive medical skills ranging from common acute illness management, chronic illness management, executive screening programs, specialised services and radiological services. Excellence in patient care is achieved through various processes including regular patient satisfaction surveys, the results of which are incorporated into our routine care systems.

Doctors follow benchmark protocols, conduct regular audits and are required to attend seminars to keep themselves abreast with the latest in medical advances. There are peer group committees such as Pharmacy Committee, CME Committee consisting of key doctors within the group, who review protocols of treatment and patient management as well as pharmacotherapy and prescribing regimes with the group on a periodic basis.

Established in 1997, Qualitas Medical Group has one of the largest network of clinics in Malaysia, with more than 160 clinics across the country. The Group also has a growing regional network of 12 clinics in the Asia-Pacific region, comprising one clinic with diagnostic facilities and six dental centres in India; three affiliate clinics in Cambodia and three clinics in New Zealand. Meanwhile, Qualitas is also looking at further extending its overseas wings into other developing countries in the Middle East and Africa, which present windows of opportunities in the area of primary healthcare.

Attributable to the company’s centralised marketing with consolidated billings, Qualitas has been able to attract quite a number of multinational corporations. Qualitas’ impressive list of over 5,000 corporate clients include Bank Negara, EPF, Tesco, Carlsberg Breweries, Bank of Nova Scotia and Bank of America as well as managed care organisations such as ING.

Qualitas Medical Group Limited was listed on the Catalist Board of the Singapore Stock Exchange on 1 September 2008.

We Care For Your Good Health

QUALITAS MEDICAL GROUP
Suite 301, Menara PJ
Amcorp Trade Centre
18 Persiaran Barat
46050 Petaling Jaya
Selangor Darul Ehsan, Malaysia

Tel : +603 7956 6339
Fax : +603 7958 6704
Email : http://www.qualitas.com.my

OVERVIEW
Tunisia is a small, politically stable country on the North African Coast with a population of more than 10 million. Due to its limited natural resources, the government is focused on strengthening human capital and developing the manufacturing, tourism and agriculture sectors.

A large part of the national budget goes to education, healthcare, housing and social services. The private sector plays an important role in economic growth and as a result, Tunisians have created a modern, diversified and market- oriented economy. In 2008, the average annual income per capita was USD4,000 and the country literacy rate was at 75%, one of the highest in North Africa.

ECONOMY
Tunisia’s economy grew at an average of 5% from 2004 to 2007 and is expected to grow at an average of 6% over the next five years although this may decrease due to the global economic crisis. The average inflation rate in 2008 was 5%. The export-driven manufacturing industry is the country’s backbone of economic growth. Sectors such as textile industries and automobile components create employment for the Tunisians.

Tourism is the next source of foreign currency for Tunisia – over 7 million tourists visited Tunisia in 2008 and brought in nearly USD3 billion in convertible currencies. Agriculture is another key sector and employs about 20% of the population. Last year, Tunisia exported USD1.7 billion worth of agricultural products, mainly olive oil, seafood and dates. Tunisia’s thriving economy creates an attractive environment for investors. More than 2700 foreign firms have an investment or joint venture in Tunisia. Many were attracted by Tunisia’s close proximity with European countries and also by its preferential trade agreement with the EU. Foreign investors are allowed 100% capital ownership and repatriation of capital and profits.

EXTERNAL TRADE
A founding member of the World Trade Organization (WTO), Tunisia is committed to a free trade regime and export-led growth. In 2008, over 70% of Tunisian foreign trade was with Europe, but the government would like to expand trade and investment beyond Europe. Principal Tunisian exports are crude oil, minerals, manufactured goods and agricultural goods including its internationally renowned olive oil. Major trading partners are France, Italy, German, Belgium and also Maghreb countries.

Tunisia was the first North African country to sign an Association and Free Trade Agreement with the EU. The country also signed regional cooperation agreements to provide greater access of their products. In 2008, total exports stood at USD20 billion and imports were worth USD25 billion. Tunisia’s import pattern is dominated by the needs of its manufacturing sectors.

BI-LATERAL TRADE WITH MALAYSIA
In 2008, Malaysian exports to Tunisia were worth RM47.5 million. Major export products were palm oil, chemicals & chemical products and electrical & electronic products. During the same period, Tunisia’s exports to Malaysia was only RM20 million. One of the challenges for our products to enter Tunisia is that imports from EU enjoy a price advantage over other products as many EU products are totally exempted from import duties.

MARKET OPPORTUNITIES
The awareness on Malaysia and Malaysian products is low as we do not have a direct representative here. However, lots of opportunities are available, especially in sectors involving processed food, medical equipments and supplies, pharmaceuticals products and building materials. It is strongly advised for Malaysian companies to visit Tunisia prior to entering into a business relationship with local partners.

TIPS ON DOING BUSINESS IN TUNISIA
Business etiquette in Tunisia is reminiscent of Arab customs. It is, however, one of the more liberal and tolerant Muslim countries. Dress smart and conservatively always. A suit and tie is appropriate for men; a suit for women. Be respectful of the culture and religious customs. Avoid making business appointments during the month of Ramadan. Tunisians are courteous people. Regular visits and personal contact are essential to maintain and strengthen business relationships. Reconfirm appointments in advance and allow ample time between meetings. Be punctual. Businessmen generally speak Arabic or French, so have an experienced interpreter on hand. Shake hands when entering and leaving meetings. If you are invited to someone’s home, bring a gift as a token of appreciation.

Contact Details:
Malaysia External Trade Development Corporation
Embassy of Malaysia
Commercial Section (MATRADE)
17th Floor, North Tower
Nile City Building
Cornish E1-Nil Street
Cairo, Egypt

Telephone : +2-02 (2) 461 9063 / 461 9064
Fax : +2-02 (2) 461 9065
Email : cairo@matrade.gov.my

The road to global recovery appears to be sluggish and uneven, with many daunting challenges along the way. Both the World Bank and the IMF are projecting the world economy to slide into a deeper recession in 2009. In July 2009, the IMF revised its global economic forecast to -1.4% in 2009 (2008: 3.1%), while the global contraction in 2009 is estimated at -2.9% by the World Bank. According to the latest IMF revision, the US (2009: -2.6%) will experience a less severe recession in 2009 compared to Europe which may face a deeper one (2009: -4.8%). The IMF projects the world economy to recover to around 2.5% growth in 2010, with the US recording a meagre 0.8% growth in 2010, slightly higher than the previous 0% growth forecast.

As the external sector tumbles, Malaysia’s GDP contracted by a steep -6.2% in 1Q09, following a stagnant 0.1% growth in 4Q08. As external demand nose-dived, Malaysia’s exports dipped sharply in 1Q09, and investment was severely affected as well. Given the deteriorating global economic prospects, a second stimulus package amounting to RM60 billion (about 9% of GDP) was unveiled in March 2009. Although the second package appears larger, the actual direct spending is only RM15 billion (or 25% of the total amount) to be spent over a two-year period. The recurring concerns have been the speed and efficiency of implementation and the potential leakages. A notable point is the greater attention given to retrenched workers and unemployed graduates. With the second stimulus package, the fiscal deficit is estimated to rise to 7.6% of GDP in 2009, up markedly from 4.8% in 2008.

In a move to make Malaysia more attractive to investors, liberalisation measures have been announced. Starting 22 April 2009, 27 services sub-sectors were fully liberalised to foreign investors, on the premise that Malaysia lacks expertise and local investments in many of these sub-sectors. Among the sectors opened up are computers and related services, health and social services, tourism services, transport, recreational, business services and shipping. On 30 June 2009, the long standing 30% bumiputra equity requirement for newly listed companies was removed, making investment conditions less restrictive. This will bring Malaysia’s equity market closer to regional benchmarks, but the impact remains to be seen since there are many factors influencing investment decisions.

In the wake of the deteriorating global economy and its adverse effects on domestic conditions, Bank Negara reduced the Overnight Policy Rate (OPR) by 50 basis points to 2.0% on 24 February 2009, the third time in five months. Bank Negara has slashed 1.50 percentage points from 3.5% since November 2008 and cut the statutory reserve requirement (SRR) to 1.0%, effective March 2009. Bank Negara has noted that lower rates could hurt savers and those who rely on incomes from deposits. At the latest policy meeting on 26 May 2009, it was decided that the policy rate shall remain unchanged in view of the persistent effects of the crisis amid early signs of stabilisation in some indicators.

Consumer and business confidence has improved in 2Q09, possibly influenced by the measures taken to support the economy. These include the fiscal stimulus packages, the historically low interest rates, and the recent liberalisation measures. Both the Business Conditions Index (BCI) and the Consumer Sentiments Index (CSI) have passed the 100-point threshold that separates expansion and contraction. The BCI, which is based largely on firm-level information, has gained 44.1 points to stand at 105.2 points in 2Q09, up from 61.1 in 1Q09, indicating that business confidence has regained some strength. Likewise, the CSI has notched up 26.9 points to 105.8 points in 2Q09, up from 78.9 points in 1Q09. Despite the still sharp declines in monthly indicators, the rise in sentiments could have been propped up by the perception that recent measures would stabilise the economy.

There are signs and a glimmer of optimism that indicate the global downturn has stabilised somewhat, but the recovery is expected to be sluggish and uneven. The healing from the current crisis will be difficult compared to previous ones because of the synchronised nature of the downturn. It will take time and huge resources to revive the deeply entangled US financial sector while policy options are running out. The weak external sector will impede a faster recovery, and the lower commodity prices are not helping either. Banks are becoming more cautious as bad loans could rise soon, limiting the flow of funds to firms. The services sector will be the pillar of strength amidst a glum manufacturing sector. It is certain that Malaysia’s growth will slide into a technical recession in the first half of 2009, as it takes the hit from the knock-on effects of a flagging global economy. Malaysia may not regain more strength until the global economy is back on track, which is going to be at a disappointingly slow pace.

In view of the deep declines in macro indicators, the fragile business and consumer confidence, and the still dismal sectoral indices, we have revised Malaysia’s growth forecast for 2009 downwards to -4.2%, from -2.2% earlier. If exports and FDI shrink severely, the downturn could be more damaging. We have also downgraded the 2010 growth forecast to 2.8%, from 3.3% previously, in anticipation of a gradual or ‘u-shaped’ global recovery.

Please allow me to first of all express my appreciation to the President and the Executive Committee Members for entrusting me to take over the good editorial work from founding Editor, Cik Hamidah Tun Ghafar who retired at the last Annual General Meeting of MASSA.

The MASSA newsletter has indeed become a communication tool for the Association filled with information relating to trade and investment in the developing countries. Our newsletter can be found in all the Malaysian Missions in the developing countries. Likewise, it is also sent to all the Ambassadors and High Commissioners of developing counties who are based in Kuala Lumpur, Malaysia. We encourage members to strike a mutually beneficial deal with MASSA to promote your respective business propositions for the developing countries.

In this edition, we have featured two countries, namely Tunisia and Libya. Located on the northern end of the African continent, these two countries present emerging opportunities for business.

Also featured is Bancoex – Venezuela’s Foreign Trade Bank tasked with resource-rich Venezuela the responsibility to finance, support and promote Venezuelan exports.

We welcome MASSA’s latest member, Qualitas Medical Group Sdn Bhd, and look forward to their presence at our network events. The Prime Minister’s Department has also obliged us with an article on “BLESS” – we do hope members will not only acquaint with this new business facilitation but also inform their overseas business partners on the ease of doing business in Malaysia.

I take this occasion to wish all our Muslim members and readers, “Selamat Hari Raya Aidilfitri, Maaf Zahir Batin”.

Fatimah Sulaiman 
Editor

Malaysia’s Gross Domestic Product (GDP) forecast for 2009 was revised to between -5% to -4% from its earlier projection of -1% to 1%. This revision was made after the first quarter 2009 GDP shrank 6.2% and the second quarter, 3.9%. There are positive signs of the decline abating, and given time to enable the stabilisation measures to take its effect, we can be cautiously optimistic of a recovery in 2010.

This year will be a challenging one for the business sector. The ongoing global financial crisis will change the business landscape and will require our businesses to improve its competitiveness innovate, train and retrain its workforce to meet the external and domestic challenges. We must look for market niches in new potential growth areas and to build a long-term market strategy for sustainability.

Our Malaysian Government has put in place various measures to sustain strong business and consumer confidence in the country. These include the guarantee of all ringgit and foreign currency deposits in the banking system. Bank Negara has lowered the Overnight Policy Rate (OPR) to 2% in February this year, and the Statutory Reserve Requirement (SRR) to 1% from March 2009, in a move to lower the borrowing costs needed by the business sector. A RM67 billion stimulus package by our Government rolled out in November 2008 and March 2009 is also aimed at assisting the business sector to weather the current economic downturn. These aforesaid initiatives will, given time, play a critical role in Malaysia’s economic recovery.

I have pleasure to welcome on board, Puan Fatimah Sulaiman, the new Editor of MASSA newsletter, who took over from Cik Hamidah Tun Ghafar who retired at the last Annual General Meeting.

I would like to thank all the contributors for the many illuminating articles that have made our newsletter interesting. I sincerely hope that members will continue to tap on MASSA’s business network and linkages in the developing countries to expand their market outreach and make Malaysian products and services known to the world.

I take this occasion to wish all our Muslim members and readers, “Selamat Hari Raya Aidilfitri, Maaf Zahir Batin” and “Happy Deepavali” to our Hindu friends.

TAN SRI DATO’ AZMAN HASHIM
President

Courtesy Call on MASSA President by Ambassador of Chile to Malaysia, 20 October 2009

H.E. Jose Manuel Ovalle Bravo, Ambassador of Chile to Malaysia made a courtesy call on Tan Sri Dato’ Azman Hashim, MASSA President at his office on 20 October 2009. Tan Sri Dato’ Michael Chen Wing Sum, MASSA Vice President was also in attendance. His Excellency was accompanied by Ms Patricia Araya, Deputy Head of Mission, Embassy of Chile in Malaysia on this visit.

Seminar on Business Opportunities in Construction and Education in Zambia, 22 October 2009;
and Specialised Marketing Mission to Zambia organised by MATRADE, CIDB and MASSA, 2 – 7 December 2009

The Malaysia External Trade Development Corporation (MATRADE) in collaboration with the Construction Industry Development Board (CIDB) and Malaysia South-South Association (MASSA) organised a Seminar on “Business Opportunities in Construction and Education in Zambia” on 22 October 2009 at Menara MATRADE, Kuala Lumpur.

This seminar was organised to inform, update and encourage Malaysian companies to consider the investment and business opportunities in the Construction and Education sectors in Zambia. High level representatives form the Zambia Development Authority (ZDA), Zambian National Building Society (ZNBS) and the Zambian National Construction Council gave an overview of the business opportunities in Zambia and presented numerous proposals in these two sectors for investment consideration.

This joint event resulted in an 18-member delegation led by Puan Roseliah Taha, Deputy Director of Services and Support of MATRADE to Lusaka from 2 – 7 December 2009. A business seminar and subsequent one-to-one meetings resulted in eleven (11) Memorandum of Understandings (MOUs) inked between the delegates and their Zambian counterparts. These MOUs have a potential investment value of RM4.88 million. The Malaysian delegates were privileged to have had an audience with H.E. President of Zambia, in the presence of senior Cabinet Ministers, State House officials and the Press.

MASSA wishes to express its appreciation to its EXCO member YBhg Dato’ J. Jegathesan for the “internal coordination” efforts that were integral to the success
of this mission.

Visit of Multisectorial Mexican Commercial Mission to Malaysia, 9 November 2009
MASSA facilitated one-to-one business meetings at the Best Western Premier Seri Pan Pacific Hotel, Kuala Lumpur for the visit of a Multisectorial Mexican Commercial Mission to Malaysia on 9 November 2009.

Argentina-Malaysia Business Meet Seminar and Networking Lunch, 11 November 2009
A high-level business mission from the Central Region of the Argentine Republic comprising the Provinces of Cordoba, Entre Rios and Santa Fe, together with the Federal Council of Investments (CFI), visited Malaysia from 10 to 12 November 2009.

INTRADE Malaysia 2009 at MECC, Kuala Lumpur, 10 – 12 November 2009
MASSA participated in the 3rd International Trade Malaysia Exhibition (INTRADE Malaysia 2009) organised by MATRADE, with its theme “Optimising Global Opportunities” at the MATRADE Exhibition and Convention Centre (MECC), Kuala Lumpur from 10 to 12 November 2009. A potential record sales of RM4.22 billion was recorded for Malaysian manufacturers and exporters by MATRADE at this exhibition, the best results achieved since INTRADE’s inception in 2007 with actual sales amounted to RM417 million, almost double the value of the previous year. Major sectors that recorded strong sales prospects were automotive parts and components, food and beverages, palm oil products, toiletries, cosmetics and household products, building materials and rubber products (rubber gloves) with Thailand, Korea, Vietnam, Hong Kong, China, Saudi Arabia and Australia being the top purchasing nations.

A two-day Incoming Buying Mission (IBM) programme was also held concurrently at this exhibition. A total of 867 Malaysian companies and exporters participated in the IBM programme with MATRADE organising more than 8,000 one-to-one business matching meetings with 609 foreign buyers from around the world. In conjunction with this international trade exhibition, MATRADE also organised the Kuala Lumpur International Trade Forum 2009 (KLITF) on “Leadership in the Marketplace through Creativity and Innovation” on 12 November 2009. INTRADE Malaysia 2009 attracted more than 340 exhibitors from 25 countries and recorded more than 7,000 local and international trade visitors.

Courtesy Call by Ambassador of Colombia to Malaysia at MASSA Secretariat, 30 November 2009

H.E. Silvia Castano De Gonzalez, Ambassador of Colombia to Malaysia, made a courtesy call at MASSA Secretariat on 30 November 2009. H.E. was accompanied by Mr Alejandro Gomez, First Secretary of the Embassy of Colombia in Malaysia.

(From left) H.E. Silvia Castano De Gonzalez, Ambassador of Colombia to Malaysia, Ms Ng Su Fun, Executive Secretary, MASSA and Mr Alejandro Gomez, First Secretary of the Embassy of Colombia in Malaysia

Briefing on Showcase Bangladesh 2010 by BMCCI, 10 December 2009

The Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) gave a briefing at MATRADE’s office on 10 December 2009 to update Malaysian businessmen on their upcoming Showcase Bangladesh 2010 event which will be held at Putra World Trade Centre (PWTC), Kuala Lumpur from 8 to 10 January 2010.

The objectives of this showcase are to introduce and to promote Bangladeshi products and services to potential buyers and importers from Malaysia. This event is organised in collaboration with the Bangladesh High Commission in Kuala Lumpur and supported by Malaysia South-South Association (MASSA) and Federation of Malaysian Manufacturers (FMM).

Summary of the presentation made by Dr. Thierry Apoteker, Managing Director of TAC, at the MASSA Tea Talk on 13 October 2009.
Recent economic indicators confirmed TAC’s scenario of a trough in 2009Q2, and some equity as well as commodity markets are now pricing a V-shaped recovery. TAC believes however that the specific nature of the crisis will leave ‘original scars’ that will prevent a sharp rebound in mature economies. Some of the most positive views today are related to the idea that a major “decoupling” is taking place between emerging and developed economies. Actual developments and the most plausible outlook, suggest that the ability of emerging economies to go back to the pre-crisis levels of economic growth will be very difficult, and that the “decoupling” is taking place only to a limited extent.

In such uncertain economic times, it is useful to remember that risk materialisation has a stronger probability during the immediate exit of crises, and that therefore country risk monitoring is a must for the coming quarters and years.

The worldwide economic recovery is under way, and the probability of a major “double-dip” is low.
Indeed, the wholesale liquidity markets have moved back to normal, enabling the progressive reduction in the indiscriminate credit crunch that prevailed during 2008Q4 and 2009Q1. The impact of the massive policy stimulus (major fiscal swings with large deficits, very low interest rates and ample liquidity injections by central banks) have allowed industrialised countries to avoid the worst of the recessionary forces unleashed after the Lehman collapse in September 2008.

All major industrialised areas have indeed moved back to zero or positive economic growth in the last quarters (e.g. US GDP growing at 3.5% in annualised quarter-on-quarter growth in 2009Q3), and the trough of the crisis was reached in 2009Q2. Added to the traditional inventory cycle, this should allow sufficient strength in final demand to avoid a large double-dip after the current cyclical phase.

However, the speed of recovery will be limited and any sign of a V-shape cycle should be treated with great caution. Indeed, consumer confidence is not improving significantly any more, in part because of the lagged effect of the economic recession on employment; credit distribution will be structurally constrained by the stronger regulation that is expected after the crisis and because households will try to strengthen their balance sheet after the large losses on the value of their assets; and governments will have to initiate the required corrective measures on budget deficit, with a negative implication on the medium-term trend in final demand. Overall, industrialised countries are not expected to move back to their potential levels of economic growth before 2011 – 2012 at the earliest, implying average annual GDP growth below 2.5% in the US, below 2.0% in the Eurozone, and below 1.5% in Japan for the next two years.

During this medium-term period, the risk that is today underestimated is related to inflation: the pick-up in commodity prices after the slump of 2008Q4 – 2009Q1 is creating a push-factor in inflation, while the fiscal and monetary policies are clearly favouring a reversal in long-term inflation expectations. In the very short-term, risks are mitigated by the large output gap, even though the “statistical base effect” is likely to push headline figures above what is currently expected, around the turn of the year or in the first part of 2009.

Emerging markets will remain more dynamic, but their ability to fully decouple is limited.
The impact of the global crisis has been very uneven for emerging and developing nations. China has engineered a major policy-led reversal in economic activity after the first quarter of 2009, and has pulled a number of other emerging markets with her. Similarly, some countries in Latin America (e.g. Brazil or even Argentina) have managed to smooth the impact through efficient policy measures. Commodity and oil exporters have regained some momentum with the pick-up in prices since 2009Q2. Overall, however, the global group of developing countries is registering a large economic slowdown, and the parallelism between their average growth and that of industrialised countries remains constant. This still means that this group of countries will register a positive average GDP growth in 2009, while industrialised countries are clearly in a recession. Accounting today for less than 35% of world GDP and having industrialised countries absorbing two-thirds of their exports, developing countries are not yet in a position to develop a fully autonomous growth cycle and the decoupling remains limited in magnitude and localised (stronger in Asia, impossible in Eastern Europe, for instance).

Country risk analysis is critical during these uncertain times, and allows companies to benefit from the recovery while avoiding major “risk traps”.
TAC has developed a very comprehensive system of quantitative tools providing early warning signals and risk ratings for 70 developing countries worldwide. The models designed incorporate the most sophisticated non-linear statistical tools, and have consistently delivered better and earlier signals that other information available on the market today.

These non-linear models allow computing Economic & Financial Risk Ratings, fundamentally measuring the risks of currency depreciation, cross-border payment problems and cyclical reversal or negative economic growth prospects, with three different time horizons (less than 1 year, 1 to 3 years and 3 to 5 years). In parallel, TAC uses World Bank information on political and governance variables to compute a Political Risk Rating, measuring both the risks of political instability and the issues related to governance, rule of law or regulatory quality.

A simple and easy-to-read way of looking at country risk today is therefore to look at both TAC average Economic & Financial Risk Rating and TAC Political Risk Rating. All TAC measures range from 0 (lowest risk, best situation) to 100 (highest risk, very perilous situation), with the level of 60 being a threshold for substantial risk, while conversely the level of 40 is the threshold with a limited/low risk.

MASSA Tea Talk By Dr. Thierry Apoteker Of Tac on 13 October 2009

The chart below shows the performances of a sample of large developing countries regarding these two fundamental elements of risks. It can be used to separate four different groups of countries:

• On the bottom-left area of the chart are countries that have a moderate degree of risk for both economic and political ratings; the ability to exit the recovery swiftly, to avoid currency depreciation pressures and to pursue reasonable economic policies is stronger than elsewhere. Chile, South Korea and to a certain extent the Czech Republic, Poland, South Africa and Malaysia are in this group.
• Countries that are at the bottom-right side of the chart combine a positive Economic & Financial Risk with larger uncertainties about political and regulatory environment: these countries are likely to recover from the crisis and offer attractive opportunities, but the contractual details and the risks of having government interference or legal difficulties when problems arise should be considered with caution: this is particularly true for Russia, but also to a certain extent for Indonesia, the Philippines, Thailand and China. India, Mexico and Argentina also exhibit similar characteristics.
• Finally, there are emerging countries that have an intermediate level of political risk, but suffer from much larger uncertainties regarding their economic and financial situations. Such countries, including Turkey, Romania, Hungary, and, to a lesser extent, Brazil, may experience more volatility (exchange rates, available liquidity and credit, domestic demand momentum) over the next few quarters.