MITI on Liberalisation of the Services Sector in Malaysia

Liberalisation of the Services
Sector in Malaysia
Arizal Thani Saadun
Services Sector Development Division
Ministry of International Trade and Industry Malaysia
14 February 2014
CONTENT
 Overview
 Liberalisation of the Services Sector
 Malaysia’s Commitments
 Malaysia Services Development Council
 After Liberalisation
 Way Forward
Services Sector in
Malaysian Economy
Macro economic targets for services sector under
national development plans:
GDP Contribution:
 IMP3 (2020) - 59.7%
 NEM (2020) - 67.3%
 RMK10 (2015) - 61.0%
Services Sector in Malaysian Economy
GDP
Contribution
**Investment
(RM Billion)
Import
(RM Billion)
Export
(RM Billion)
2010 – 53.2 %
2010 – RM36.7
2010 – RM36.7
2010 – RM36.7
2011 – 54.2 %
2011 – RM70.4
2011 – RM70.4
2011 – RM70.4
2012 – 54.6 %
2012 – RM 117.55
2012 – RM 117.55
2012 – RM 117.55
EMPLOYMENT (‘000) (including construction services):
2011
2012
8,242.2
7,649.3
Source : DOSM
LIBERALISATION OF THE
SERVICES SECTOR
Why liberalise?
 Opportunities for joint ventures
 Transfer of expertise and technology
 Create
higher
opportunities
value
 Increase productivity
employment
Services Modes of Supply
Modes
Notes
Supplier presence
Mode 1:
Cross-border
supply
User in Malaysia receives services from abroad
through telecommunications or postal
infrastructure
Do not have to move
Mode 2:
Consumption
abroad
Malaysian goes abroad to consume the services
Do not have to move
Mode 3:
Commercial
presence
Service provided within Malaysia by a locallyestablished affiliate, subsidiary or representative
office of a foreign-owned and controlled company
Move to another
country
Mode 4:
Presence of a
natural person
A foreign national provides a service in Malaysia
as an independent supplier or employee of a
service supplier
Move to another
country
Liberalisation of Services Sector – 1st package of
Autonomous Liberalisation (22 April 2009)
The 27 services subsectors liberalised in 2009 (up to 100% foreign equity):
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Consultancy services related to installation
of hardware
Software implementation services
Data processing services
Database services
Maintenance and repair services of
computers
Other computer related services
All veterinary services
Welfare services delivered through
residential institutions to old person and the
handicapped
Welfare services delivered through
residential institutions to children
Child daycare services
Vocational rehabilitation services for the
handicapped
Theme park
Convention and exhibition centre
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Travel agencies and tour operator services
Hotel and restaurant services (4&5 star hotels)
Food serving services (4&5 star hotels)
Beverage serving services (4&5 star hotels)
Class C freight transportation services
Sports event promotion and organisation
services
Regional distribution centres
International procurement centres
Technical testing and analysis services
Management consulting services
Rental/ leasing services of ships (excludes
cabotage and offshore trades)
Rental of cargo vessels without crew
Maritime agency services
Vessel salvage and refloating services
8
Liberalisation of Services Sector – 2nd package of
Autonomous Liberalisation (7 Oct 2011)
Telecommunications – ASP
Legal Services
International Schools
Private Universities
Tech & Vocational Schools
Medical Specialist Services
Tech & Vocational Schools – Special
Needs
Dental Specialist Services
Private Hospitals
Telecommunications (NSP & NFP)
Departmental & Specialty Stores
Architectural Services
Incineration Services
Engineering Services
Accounting /Taxation
Quantity Surveying Services*
Skills Training Centers
Courier Services
*Note: Quantity Surveying Services
after Budget 2012 announcement
WHAT ARE WE COMMITTING IN FTAs?
EQUITY
MOVEMENT OF NATURAL
PERSON (MNP)
MUTUAL RECOGNITION
AGREEMENTS (MRAs)
ECONOMIC AND TECHNICAL
COOPERATION (ECOTECH)
ASEAN Framework Agreement
in Services (AFAS)
Improve the efficiency and competitiveness, diversify
production capacity, and supply and distribution of services
Eliminate restrictions to trade in services
Expand the depth and scope of liberalisation with the aim to
realise a free trade area in services
Liberalisation in Services covering…
12 Broad Sectors
Business Services
128 Sub-Sectors
Educational Services
Tourism and Travel
Related Services
Communication
Services
Environmental
Services
Recreational, Cultural
and Sporting
Services
Construction and
Related Engineering
Services
Financial Services
Transport Services
Distribution Services
Health Related and
Social Services
Other Services
Liberalisation of Services Sector Across ASEAN
LIBERALISED SUBSECTOR (AFAS 8)
SUB-SECTORS TO
BE LIBERALISED
(BY 2015)
TOTAL
Thailand
104
24
128
Malaysia
96
32
128
Philippines
96
32
128
Lao PDR
89
39
128
Vietnam
88
40
128
Cambodia
87
41
128
Indonesia
86
42
128
Singapore
84
44
128
Brunei
79
49
128
Myanmar
79
49
128
COUNTRY
MALAYSIA SERVICES
DEVELOPMENT COUNCIL (MSDC)
Background
• Formed in 2007
• Chaired by YB Minister of MITI and co-chaired by
Dato’ Sri Idris Jala
• Monitor, review, discuss and resolve issues that
involve the development of the services industry
• Coordinates the implementing of liberalisation
programmes
Issues Discussed
• Human Capital
• Access to technology
• Regulatory Environment
• Re-alignment
incentives
and
consolidation
of
• Internationalisation of Service Providers
current
Working Groups
Each WGs will deliberate on issues under their respective purview
which affect the services sector and recommend measures for
MSDC’s consideration and endorsement.
AFTER LIBERALISATION
Services sector performance is on the upward trend…..
Year
GDP
(in RM million)
2005
2006
2007
2008
2009
2010
2011
2012
254.3
272.5
299.9
325.7
335.0
359.8
385.1
410.0
Services
contribution to
GDP (%)
46.8
47.5
49.2
50.9
53.2
53.2
54.1
54.6
• Benefitted service sector SMEs in the economy
by reducing the productivity gap between SMEs
& non-SMEs, and increasing share of SMEs
• Financial services, shared services and
outsourcing, communication and wholesale and
retail are the main services categories
witnessing higher capital spending
• Investments in the services sectors are driven
by domestic firms
WAY FORWARD
Studies related to the services sector….
• Malaysia: A Blueprint for Services Sector, by the
World Bank (commissioned by the EPU)
• Study to Assess the Impact of Liberalisation on the
Services Sector, by Frost and Sullivan (commissioned
by the EPU)
• Study to on Domestic Regulations to Enhance the
Competitiveness of Malaysia’s Services Sector by
PricewaterHouse Coopers – PwC (commissioned by
MITI)
All information are available at
http://myservices.miti.gov.my
OR
Forward your enquiry(s) via email to:
[email protected]
Thank You
Arizal Thani Saadun
[email protected]
http://myservices.miti.gov.my

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