For decades, Japan and Malaysia have enjoyed a good relationship in various spheres such as trade, investment, education, technology and culture. After Prime Minister Mahathir Mohamad assumed his premiership this year, the bilateral relationship between both countries gained renewed momentum with new aspirations by the government of Malaysia. Japan was the first country visited by our honorable prime minister and it signified the close relationship between Mahathir and Japan.
Upon achieving its independence in 1957, Malaysia’s trade relations with Japan soared; the first Japanese investment in Malaysia was the joint venture of a textile manufacturing project undertaken in the same year. In subsequent years, the number of joint projects with Japan increased significantly, particularly in the 1970s.
After World War II, Japan managed to sustain high economic growth and emerged as the world’s second-largest economy in 1981. The whole world was amazed by Japan’s economic success. In 1982, Mahathir announced the Look East Policy during the Fifth Annual Joint Conference of MAJECA-JAMECA (Malaysia-Japan Economic Association and Japan-Malaysia Economic Association) at the Hilton Kuala Lumpur. This policy has played an important role in shaping the Malaysia-Japan relationship. The success of the policy has led to the establishment of the second iteration of the Look East Policy. During Mahathir’s recent visit to Japan in June, both prime ministers vowed to revitalize and strengthen the Look East Policy, which underscored Mahathir’s desire to have more collaboration between Malaysia and Japan, especially in the areas of technology and innovation.
Japan has always been one of Malaysia’s top sources of foreign direct investment. From 2006 until March this year, a total of 183 Japanese regional establishments in Malaysia have been approved with investment value amounting to $672.8 million. Some of the notable companies are Scientex Berhad, Metrod Holdings Japan, Tokyo Gas, Komatsu and Panasonic Financial Centre. As of March 2018, four Japanese conglomerates were approved with “Principal Hub” status.
Japanese companies, including small and medium-sized enterprises are welcome to invest, particularly in the new growth areas characterized by emerging technologies, being capital intensive, high-value added, knowledge-based, skill-intensive, export-oriented and increasing automation, as well as the extensive research and development areas. Japanese companies are also welcome to use Malaysia as their gateway into the Association of Southeast Asian Nations that offers a market of 640 million people.
Malaysia has a strong domestic ecosystem that allows companies to grow and expand in this region. With the capabilities and technological competitiveness from Japan and Malaysia’s highly skilled workforce and impressive investment environment, sectors with high potential can be further explored by both countries. These would include, in particular, aerospace, medical devices, artificial intelligence, renewable energy, chemical and petrochemical, e-commerce, blockchain technology and the halal industry. For the halal industry, since Japan was our third-largest halal export destination in 2017, with an export value of 2.82 billion ringgits, it is anticipated that Malaysia will play a significant role in providing her expertise in halal-related areas in preparation for the upcoming 2020 Summer Olympic and Paralympic Games in Tokyo.
The trade and investment mission to Japan scheduled for Oct. 15 to 17 this year will be the first trade mission by myself as minister of international trade and industry. It reflects the acknowledgement of Japan’s contribution to Malaysia’s economy as the fourth-leading trading nation in 2017. It aims, among other things, to enhance bilateral economic and trade relations between both countries and showcase that Malaysia is committed to providing an improved business-friendly environment with heightened transparency and good governance, as well as being trade facilitative. This mission, which includes a bilateral meeting with my Japanese counterpart, a seminar on business and investment opportunities in Malaysia and one-to-one business meetings with selected companies, will provide a great opportunity for both sides to explore further collaboration.
The fundamentals of the diplomatic relations between Malaysia and Japan since our independence has indeed been further enhanced over the years. Through economic partnership, the trade between both countries has grown by leaps and bounds with various industries benefitting from the burgeoning synergy. As for the Ministry of International Trade and Industry, we will continue to serve as the main focal point for trade and investment.
I trust that with the slogan “New Malaysia,” the bilateral relationship between Malaysia and Japan will be reinvigorated and elevated to greater heights leading to unparalleled development for both nations.
IN FIVE EASY PIECES WITH TAKE 5