Malaysia

The essence of this upbeat outlook is embodied in the Malay word boleh, which simply means "can." That captures the entire country's "can-do" attitude.

Part of this bullishness may stem from pride but the nation's history allows citizens cause to be boastful.

Over the past 30 years, 23 years of which have been under the leadership of Prime Minister Datuk Seri Dr. Mahathir Mohammed, Malaysia has rapidly industrialized.

It held onto its agricultural and mining roots as an economic base while opening itself up to foreign investment and a massive expansion into the manufacturing sector. This very sector, made up largely of multinational companies, now accounts for over 30 percent of the country's GDP.

"Malaysia is the preferred location for many foreign investors looking for an offshore manufacturing base," says Dato' Seri Rafidah Aziz, the country's minister of International Trade and Industry Malaysia. "We have a proven track record with investors from more than 40 countries that have invested in over 3,000 projects."

And Malaysia itself has profited too. Through the 1990s, despite the Asian economic crisis, Malaysia averaged annual growth rates of about 7 percent. According to the Malaysian Industrial Development Agency, GDP doubled in this period to reach $57.7 billion.

Rafidah Aziz, minister of International Trade and industry Malaysia

Today, Malaysia is a leading exporter of high-tech and electronic equipment, including semiconductors, computer peripherals, audio and video products, air conditioners and home appliances. But Malaysians want more and they are working actively towards that goal.

Envisioning added value

Malaysia's economic success has depended greatly on Dr. Mahathir's ambitious Vision 2020 plan and it will continue to do so even after he has stepped down. Under the multi-phase initiative, Malaysia will continue to improve its infrastructure, educational system and overall abilities not only to attract more high-end, high-tech investment but also to allow local industry to better meet the needs of the Malaysian and newly opening ASEAN markets.

"Malaysia's industrial development is being shifted to knowledge-driven growth. We are undertaking measures for skill upgrading through reorientation to allow greater flexibility and autonomy among training institutes - making them more market driven," explains Rafidah. "We are actively targeting new areas of investment such as engineering, multimedia, biotechnology, life sciences, healthcare, aerospace and advanced electronics."

Within this framework, the country is home to about two dozen universities, and it encourages its students to advance their educations abroad. Malaysia also offers extra incentives to foreign companies who initiate training programs for local employees.

To support the new investments the country has targeted, continuous improvements are being made to the nation's infrastructure. A well-maintained north-south expressway links the entire west coast of the country and can efficiently carry road traffic and supplies between Thailand and Singapore.

In terms of air traffic, the Kuala Lumpur International Airport is a world-class transportation hub featuring a light rail system that allows visitors access to downtown KL in under 30 minutes.

Between 2002 and 2003, Malaysia has seen a drop in the number of new foreign investments. Most of the money coming in from abroad this year will be in the form of expansions and improvements to existing investments. Many of these improvements will be geared toward training and improving the quality of local staff and overall customer service.

And many of these investments - especially among small and mid-sized enterprises - will come from Japan.

Malaysia looks East, Japan invests West

Until recently, Japanese investment in Malaysia progressed in size and scope right along with the industrialization of the country. Relations between the two nations grew much stronger with Dr. Mahathir's "Look East" policy, which encouraged Malaysians to learn from the economic successes of Japan and Korea.

Today, Japan is the second largest investor in Malaysia behind the US. Between 1997 and 2002, foreign direct investment from Japan amounted to more than $3.1 billion.

The number of investments has dropped off in the past few years due to the troubled Japanese financial climate, coupled with the range of challenges facing economies around the globe.

Ryoichi Jinkawa, general manager of Mitsui & Co., Ltd.'s branch in Kuala Lumpur

But while the flow of Japanese FDI has lessened, it certainly hasn't stopped. The list of companies with manufacturing, R&D, marketing and sales and service operations in Malaysia is a Who's Who of Japan's most well-known brands.

Matsushita, Canon, Sony, Epson, Fuji Film, Hitachi, Clarion and Toshiba, to name a few, all maintain operations here. As of November 2002, six Japanese companies had established operational headquarters in Malaysia, 34 had their regional offices here and 49 chose Malaysia as their international procurement center.

"Japan is an important source of FDI for Malayisa," agrees Rafidah. "The strong presence of Japanese companies in the manufacturing and non-manufacturing sectors and their continuing inflow of investment reflect their confidence in the investment environment in Malaysia and the country's future economic growth."

Japanese trading house Mitsui & Co. Ltd. is one such investment. It has maintained operations in Malaysia for over 30 years and has aided countless companies to develop and expand their local and global business frameworks.

"Fostering the development of technology in manufacturing and service industries and enterprises that have potential creates value," says General Manager Ryoichi Jinkawa.

Like Malaysia itself, the country's leading Japanese trading company has expanded its business by diversifying services into the hottest sectors in the market. "Focus has been shifted to the electronics and semiconductor and IT sectors to meet clients' demands," explains Jinkawa.

Mitsui's reputation for meeting or exceeding customers' expectations by providing quality service has also built it a client portfolio of top Malaysian investments.

To continue adding value for its clients, Mitsui & Co established Mitsui Management Services in 1988 to assist Japanese firms in tackling the logistics required for setting up business in Malaysia. In this way, it has assisted more than 180 firms to get their start here.

"I am very proud of Mitsui Malaysia and there is no doubt in my mind that our company will continue to remain successful," adds Jinkawa.

In fact, Jinkawa not only believes in Mitsui -- he also believes in Malaysia. He feels the country can and will remain a leader among ASEAN nations. And he feels a large part of the success is due to the many reforms and policies instituted by Dr. Mahathir.

"The prime minister's contributions cannot be quantified," Jinkawa concludes. "His role in providing a competitive yet profitable work environment for Japanese companies has been tremendous. Many factors such as political stability, increasing trade volume, top-notch infrastructure, the high standard of living, and safety and security, all contribute to Malaysia being an ideal foreign investment destination."

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