EU-ASEAN Business Council (EU-ABC) AGM Gala Dinner in Collaboration with Eurocham Malaysia

KEYNOTE ADDRESS

EU-ASEAN BUSINESS COUNCIL (EU-ABC) AGM GALA DINNER IN COLLABORATION WITH EUROCHAM MALAYSIA

ON BEHALF OF

THE MOST HONOURABLE PRIME MINISTER OF MALAYSIA

9 JUNE 2022 (THURSDAY)
6.30 PM – 10.30 PM
EQ HOTEL Kuala Lumpur

Bismillahirrahmanirrahim,

His Excellency Michalis Rokas, EU Ambassador to Malaysia

His Excellency Igor Driesmans, EU Ambassador to ASEAN

Mr. Donald Kanak, Outgoing Chairman of the EU-ABC

Mr. Martin Hayes, Chairman Elect of the EU-ABC

Mr. Oliver Roche, Chairman of EUROCHAM Malaysia

Assalamualaikum and good evening.

1. First and foremost, I’d like to thank the EU-ASEAN Business Council (EU-ABC) and EUROCHAM Malaysia for this evening’s invitation, as well as the honour of delivering this speech on behalf of our Most Honourable Prime Minister, Dato’ Sri Ismail Sabri.
   
   
2. On that note, he expresses his apologies for being unable to join us, and extends his best wishes to all.

Excellencies, distinguished guests, ladies and gentlemen.

3. Ever since COVID-19 hit our shores, we have come a long way. Today, all economic activities in the country have resumed. The Government made a bold decision to reopen our international borders beginning 1 April 2022, which will go a long way towards reviving the travel and tourism, aviation and other relevant sectors, further boosting our efforts at rejuvenating the economy.
   
   
4. Alhamdullilah, Malaysia continues to demonstrate economic resilience despite the challenging global uncertainties brought about by the pandemic and recent geopolitical developments. I am delighted that Malaysia’s GDP growth for the first quarter of this year rebounded to 5 per cent compared to 3.6 per cent in the fourth quarter of 2021. This was mainly contributed by the surge in domestic demand, sustained expansion in external demand, as well as further improvement in the labour market.
   
   
5. I am thrilled to share that Malaysia’s total trade last year reached an all-time high of 2.23 trillion ringgit (USD537.18 billion), while approved investment (in the manufacturing, services and primary sectors) was also at a record-breaking figure of 306.5 billion ringgit (USD70.24 billion). I am confident that these have put us on a steady path towards economic recovery and growth. Moving forward, Bank Negara Malaysia projects 2022 GDP growth to be between 5.3 to 6.3 per cent.
   
   
6. However, despite the significant progress made, we cannot afford to rest on our laurels. We must be persistent in our efforts to ensure the rapid recovery of our economy, while strengthening its resilience to new challenges posed by the changing landscape of the global economy.

Plans for the country moving forward

Excellencies, distinguished guests, ladies and gentlemen.

7. I wish to underscore that Malaysia is committed towards implementing all possible means for a rapid economic recovery, through carefully charted national plans and policies including Budget 2022, the Twelfth Malaysia Plan, National Investment Aspirations and MyDIGITAL.
   
   
8. The Government’s budget for this year, amounting to 332.1 billion ringgit (USD75.4 billion), the largest in our history, aims to bolster an economic recovery following the pandemic, through three key pillars namely Strengthening Recovery, Building Resilience and Driving Reforms. In a nutshell, Budget 2022 focuses on recovery, rebuilding national resilience and catalysing reform, to drive socio- economic recovery and national development agendas.
   
   
9. In restoring business capabilities, maintaining Malaysia’s competitiveness and investing in future technologies, the Government introduced a 2 billion ringgit (USD455 million) special strategic investment fund to attract FDI among MNCs as well as up to 100 million ringgit (USD23 million) in grants for selected technology investments, such as smart automation and aerospace.

Towards sustainable growth

Excellencies, distinguished guests, ladies and gentlemen.

10. I wish to reaffirm that sustainable growth and addressing climate change remains high on our national agenda. On this note, the Malaysian Government is diligently working towards achieving our commitments under the Paris Agreement, supported by the Budget 2022 as well as the Twelfth Malaysia Plan. The former outlines several key measures such as a voluntary carbon market to trade carbon credit, tax incentives for EVs as well as the issuance of a Ringgit-denominated sustainability Sukuk of up to 10 billion ringgit (USD2.3 billion). Meanwhile at the macro level, the Twelfth Malaysia Plan reinforces the Government’s commitment towards advancing Malaysia’s overall sustainability, outlining three priority areas namely:
    
    One, implementing low-carbon, clean and resilient development;
    Two, managing natural resources to safeguard natural capital; and
    Three, driving effective governance.

National Investment Aspirations

11. To further support the nation’s economic recovery, it is critical to strengthen the resiliency and competitiveness of Malaysia’s industries. To this end, the National Investment Aspirations (NIA), anchored by five key pillars, will ensure that investments deliver accelerated and holistic national growth, by way of increasing economic complexity; creating high-value job opportunities; extending domestic linkages; developing new and existing clusters; as well as improving inclusivity. In addition, the NIA will position Malaysia as a potential carbon trading hub in the region with the roll- out of carbon pricing mechanisms and sector-specific environmental, social and governance (ESG) and climate-risk policy measures, focusing on five key strategic sectors, namely E&E, the Digital Economy, Pharmaceuticals, Aerospace and Chemicals.
    
    
12. I am optimistic that Malaysia’s reformed investment policies and initiatives will encourage greater synergy in deepening Malaysia-EU relations, particularly in expanding green and sustainable investments in our country. On this note, I call upon all of you, the industry champions and leaders present tonight, to continue being an integral part of the country’s sustainability journey and support us in achieving the nation’s commitment of net-zero carbon emissions by 2050 at the earliest.

Digital Economy

Excellencies, distinguished guests, ladies and gentlemen,

13. Albert Einstein once said, “In the midst of every crisis, lies great opportunity”. COVID-19 not only has magnified the digital adoption in our lives, but also unlocked the enormous potential of the digital economy across many business activities.
    
    
14. In supporting Malaysia’s digital transformation, the MyDIGITAL policy is poised to position Malaysia as the “Digital Heart of ASEAN”, by developing a quality digital ecosystem, talent and regulatory environment for businesses to prosper. On that note, I invite investors and businesses alike to take advantage of our digitalisation initiatives, including in developing the ecosystem of talent, start-ups, e-commerce, e-payment solutions, fintech and other digital solutions for consumers.

Free Trade Agreements

Excellencies, distinguished guests, ladies and gentlemen,

15. Being an open economy, we rely on trade to boost growth and accelerate development. In the last decade, key crucial initiatives by the Government to enhance and deepen external trade linkages include pursuing mutually-beneficial regional and bilateral trade agreements.
    
    
16. In this regard, to date, Malaysia has signed 16 Free Trade Agreements (FTA) and implemented 15 of them, the latest one being the Regional Comprehensive Economic Partnership (RCEP) agreement, which entered into force in Malaysia on 18 March 2022. This officially made us a party to the world’s largest trading bloc covering one third of global GDP, or almost 30 per cent of the global population.
    
    
17. RCEP certainly has the potential to unlock new markets, increase trade intensity and economic integration among RCEP member countries as well as ease the supply chain in the region.
    
    
18. Given this enormous potential, I invite our partners from EUROCHAM and EU-ABC to leverage on Malaysia’s participation in RCEP by solidifying your investment and footprint in the country.
    
    Rest assured that Malaysia will continue to foster a robust economic ecosystem that is driven by progressive trade and investment policies.
    
    
19. With regard to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Government is steadfast in our commitment to ratify the CPTPP by the end of this year with steady progress made thus far on this front.

Malaysia-EU Economic Relations

Excellencies, distinguished guests, ladies and gentlemen,

20. Despite the effects of the pandemic, bilateral trade between Malaysia and the EU rebounded last year. I am pleased to note that Malaysia’s total trade with the EU grew by 26 per cent to 180.2 billion ringgit (USD43.5 billion) in 2021. Needless to say, the EU remains an important trading partner to Malaysia.
    
    
21. As for EU investors, Malaysia offers unparalleled advantages for businesses, and acts not just as a gateway to the region, but to markets globally. This is proven by the recent 2022 Milken Institute Global Opportunity Index which ranked Malaysia first in emerging Southeast Asia as the country with the most potential to attract foreign investors. Similarly, Deloitte’s “Technology-empowered Digital Trade in Asia Pacific” report ranked Malaysia first among RCEP member countries in terms of growth rate for the e-commerce market.
    
    
22. Indeed, these are testimony to our commitment towards building a resilient Malaysia.

EU Strategy for Cooperation in the Indo-Pacific

23. Having said that, Malaysia welcomes initiatives by the European Commission to engage the Indo-Pacific region in establishing a more inclusive, multi-pronged and robust partnership between the EU and the region, through the EU Strategy for Cooperation in the Indo-Pacific. The strategic framework will act as a catalyst to revive the economies in the region. Furthermore, this will strengthen the ASEAN market which lie at the crossroads of global economic interactions, while serving as a major gateway for businesses to enter the Indo-Pacific markets.
    
    
24. On the bilateral front, Malaysia welcomes the European Commission’s potential resumption of long-suspended negotiations of the Malaysia-EU Free Trade Agreement, and we look forward to further discussions on its possible resumption. No doubt, the FTA will unlock more opportunities for Malaysian and EU businesses.
    
    
25. The unprecedented disruption to supply chains has laid bare the vulnerabilities of our current trading practices. Therein, Malaysia is committed to continuously improve and ensure our supply chains remain intact and resilient. Hence, Malaysia looks forward to engaging the EU more closely in the priority areas outlined in the EU Indo-Pacific Strategy, particularly on sustainable and inclusive prosperity.

ASEAN-EU relations

26. In the regional context, ASEAN and the EU are natural partners as we share the same goals and values of maintaining peace, stability, and prosperity for our people, and are committed to addressing issues in a multilateral manner. These common values have served as a unifying force between ASEAN and the EU, bringing the two regional blocs closer together over the course of more than four decades.
27. As a Strategic Partner to ASEAN, we are optimistic that the EU will continue to assume a vital role in the region's development including continuing to advocate for the ASEAN Community Vision 2025. It is noteworthy that despite the adverse impacts of the pandemic, the EU continues to be one of ASEAN’s most important trade and investment partners. With a total trade recording 220.9 billion dollars in 2020, the EU was ASEAN's third-largest trade partner. On the investment front, the EU has been ASEAN’s second-largest source of FDI.
    
    
28. Furthermore, the EU Strategy for Cooperation in the Indo-Pacific is in line with the ASEAN Outlook on the Indo-Pacific (AOIP) adopted in 2019. In fact, the signing of the EU–ASEAN Strategic Partnership in December 2020 was instrumental in the construction of the EU’s Indo-Pacific strategy.

Closing Remarks

Excellencies, distinguished guests, ladies and gentlemen,

29. In closing, I call on your support and camaraderie to work more closely with Malaysia to further explore the full potential of the country and the wider region. Please join hands with us in the journey to foster greater partnership between Malaysia and the EU. Once again, I wish to reaffirm that Malaysia remains resolute in our commitment to ensure that the country continues to be a business- friendly nation with greater certainty, accountability, efficiency and transparency in our initiatives and policies.
    
    
30. On that note, I would like to express my appreciation to EUROCHAM Malaysia, EU-ABC and your members for the strong support extended throughout these difficult times. I would like to thank each and every one of you for the significant role that you assume, standing together with the Government, and harnessing feedback and ideas in addressing the ever-dynamic situations we face today. I am confident that the close partnership between the Government of Malaysia and EU businesses will further aid our country towards a strong economic recovery.
    
    
31. With that, I wish you an enjoyable evening ahead.

Wabillahi taufiq wal hidayah Wassalamualaikum warahmatullahi wabarakatuh.

Thank you.