Country Economic Work for Malaysia - Islamic Development Bank

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priorities of other IDB member countries in areas that Malaysia has depth of expertise and can effectively contribute. The need to identify a win-win-win scenario (i.e. Malaysian institutions as knowledge/service providers; IDB member countries as beneficiaries; and IDB as facilitator) for all parties involved to ensure effectiveness and sustainability of S&T operations. To move away from financing short-term activities like Conferences and Symposiums with relatively little impact/sustainability of resulting outcomes and refocus the limited financial resource of the S&T in the areas of maximum positive impact to Malaysia and benefiting IDB member countries. The identification and selection of the right focal points in Malaysia in the respective areas of potential collaboration is a critical factor in determining the direction and success in the development of any bilateral and trilateral initiative. Understanding the cultural and professional ecosystem of these focal points will assist in maximizing the potential collaborations between MCs. The need to enhance the familiarity of Malaysian entities to the rules and regulations (processing, disbursement and settlement of operations) with respect to the S&T operations and programs. The need to ensure that the Malaysian institutions have a realistic expectation of the outcome of the potential collaboration with other IDB member countries. (iii) Sharing SMEs Development Experiences of Malaysia 27 SME Sector in Malaysia 144. According to Ministry of Finance Economic Report 2011-2012, the SME sector accounts for 99.2% of establishments, employ 56% of the workforce and contribute about 31% of GDP. Small and Medium Enterprises (SMEs) play an important role in developed and developing countries in terms of increasing economic growth and providing employment. The SMEs sector has become the prime mover and also the backbone of industrial development in Malaysia. The setting up of Small and Medium Industries Development Corporation (SMIDEC) in 1996 was an early initiative by the Malaysian Government to promote SMEs (Figure 6.1). SME Policies in Malaysia 145. The establishment of the National SME Development Council (NSDC) in 2004 presented another chapter in SME development in Malaysia. As the highest policy-making body, its role was to formulate strategies for SME development across all economic sectors, coordinate the tasks of related Ministries and Agencies, encourage partnership with the private sector, as well as ensure effective implementation of the overall SME development 27 Sources: SME Corporation Malaysia; Ministry of Finance; Tenth Malaysia Plan; Malaysia 2012 Budget; SME Bank Malaysia; Bank Negara Malaysia; and National Trust Council (MARA). 65
programmes in the country. Initiatives under NSDC included enhanced access to financing, financial restructuring and advisory services, information, training and marketing coordination and a comprehensive SME database to monitor the progress of SMEs across all economic sectors. In recent challenging economic environment, it has also become evident Figure 6.1 SMEs as Backbone of the Malaysia Economy Source: SME Corporation Malaysia (2011) that the contribution of SMEs has become even more important in the country. It is recognized that they can be leaders in exploring new opportunities, and in becoming creative and innovative in new products development, packaging and branding, new services in ICT and outsourcing sector. The 10 th Malaysia Plan and the New Economic Model are committed to ensure that SMEs’ full potential growth is unlocked. The framework advocated by SME Corporation is given in Figure 6.2. 146. Realising that SMEs play a significant role in Malaysian economy, the Government has introduced various strategies and incentives to encourage SME sector to undertake high-value added activities such as innovations, design, and R&D. A key strategy implemented in 2011 was the introduction of the Green Lane Policy (GLP) for SMEs. Under the GLP, eligible innovative SMEs will be entitled to four main incentives namely, soft loans, tax benefits, priority in Government procurement and Ministry of Finance (Incorporated) (MOF Incl.) companies’ procurement programmes (Economic Report, 2011- 2012, Ministry of Finance, Government of Malaysia). SME Development Programmes and Potential Areas for Cooperation with IDB Member Countries 147. The following are the main SME development programs In Malaysia that can be offered to IDB member countries under the Reverse Linkages. 66
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Acknowledgements Appreciation for s
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ISRA : International Shari’ah Res
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(v) Foreign Direct Investment……
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(2005)), key insights emerged in tw
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drain. Further, the Government need
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macroeconomic indicators are given
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SMEs are concentrated in the servic
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easy technology adoption, pro-busin
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Kelantan with the lowest per capita
Page 23 and 24: Figure 1.12. General Growth Diagnos
Page 25 and 26: that the Government’s Economic Tr
Page 27 and 28: (ii) Low Returns to Investments app
Page 29 and 30: Figure 1.22. Malaysia's Exports by
Page 31 and 32: 43. Malaysia’s private firms are
Page 33 and 34: over the medium-term. Several initi
Page 35 and 36: growth software compared to its maj
Page 37 and 38: esearchers and technicians in R&D p
Page 39 and 40: 59. Malaysia can further enhance it
Page 41 and 42: Annex Table 1.2. Malaysia: MDGs Ach
Page 43 and 44: 64. The Malaysian experience has al
Page 45 and 46: economic growth. The ETP is expecte
Page 47 and 48: 77. According to the Global Competi
Page 49 and 50: development of infrastructure throu
Page 51 and 52: a. Northern Corridor Economic Regio
Page 53 and 54: The challenge is for financial inst
Page 55 and 56: Original Equipment Manufacturing (O
Page 57 and 58: Intensify formalisation to promote
Page 59 and 60: Sukuk market has experienced unprec
Page 61 and 62: For innovation to become an importa
Page 63 and 64: y the United States (MYR2.3 billion
Page 65 and 66: (vi) (vii) Sharing Eexperience and
Page 67 and 68: institutions as well as Islamic pro
Page 69 and 70: Liberal Foreign Exchange Administra
Page 71 and 72: Issues/Challenges Facing the Islami
Page 73: Funding from Government of Malaysia
Page 77 and 78: labeling and branding of Halal prod
Page 79 and 80: to over 200 industrial estates or p
Page 81 and 82: member countries can be provided te
Page 83 and 84: Figure 6.5: MATRADE Business Strate
Page 85 and 86: offered by the 35 MTCP training ins
Page 87 and 88: case of the economies in transition
Page 89 and 90: Key Challenges Facing the MTCP
Page 91: iii. Conclusion 185. Above diagnost
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Country Economic Work for Malaysia - Islamic Development Bank

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