Friday, February 20, 2004
Malaysia urged to focus on services, not techs
Reuters Kuala Lumpur, February 17
It's time for Malaysia to shine the light on its services sector as large foreign firms shift jobs abroad, rather than to keep relying on a decades-old tech-powered manufacturing base, an industry body said Tuesday.
Investments from US chip giants such as Intel and Dell into Malaysia could rebound 25 per cent to $432 million in 2004 due to a recovering global chip market, said Tim Garland, president of the American Malaysian Chamber of Commerce.
The way forward lies not in trying to match low-cost manufacturing machines China and India in the high-tech game, but in how successful Malaysia gets in persuading multinationals to set up offshore labour centres in its cities.
US-based Citigroup and British lender HSBC Holdings are among firms that have set up call-centres and back-room operations in Malaysia in the past two years.
Both companies have been quiet on the number of Malaysian jobs they would create but on Monday HSBC said it had agreed terms with a trade union for moving 4,000 jobs from Britain to India, Malaysia and China.
Malaysia's services sector had accounted for about 57 per cent of gross domestic product in 2002, nearly twice the size of manufacturing, but did not enjoy as much recognition from the government or investors, Garland said.
He urged Kuala Lumpur o give services the same "pro-business stance awarded to manufacturing" and to accelerate liberalisation in the financial, entertainment and education sectors.
Garland said US companies had so far invested 26.8 billion ringgit in Malaysia's services sector, mainly in financial services, trading and consultancy, compared with 27.3 billion ringgit in electronics.
© Hindustan Times Ltd. 2004.