Barely had Malaysian economists and business writers completed reading the 532-paged Twelfth Malaysia Plan (‘12MP
’) and settled down to a brief respite before proceeding to slice and dice the 2022 Malaysian Budget to be announced on 29 October 2021, the Government on 25 October 2021 launched yet another plan – the National Trade Blueprint (‘NTBp
What is the NTBp?
The NTBp is a blueprint commissioned by the Ministry of Trade and Industry (‘MITI
’) and developed by the Malaysia External Trade Development Corporation (‘MATRADE
The NTBp outlines a 5-year (2021-2025) development strategy and initiatives to enhance Malaysia’s competitiveness in the export of merchandise. The NTBp framework is guided by four strategic priorities, three strategic themes and eight strategic thrusts with 40 recommendations to improve and enhance Malaysia’s trade competitiveness.
The Executive Summary of the NTBp (‘Executive Summary’) can be accessed here
Why do we need the NTBp?
Based on statistics by the World Trade Organisation, Malaysia has slipped from 23rd
place in 2015 to 26th
place in 2019 in the global export rankings; having been overtaken by our ASEAN neighbours, Thailand and Vietnam.
According to the Executive Summary, the contribution by Small and Medium Enterprises (‘SMEs
’) to total exports has stagnated in the past five years, with the average growth being slower as compared to the country’s overall export growth and exports by non-SMEs.
Hence the NTBp was developed to provide clear directions and initiatives to enable the country to regain its competitiveness in trade, even as global trade becomes increasingly complex and competitive.
The key guiding principles
The key guiding principles that have been embedded in the strategies outlined in the NTBp are as follows:
The eight strategic thrusts are as follows:
- Strengthening Export Ecosystem
Remove business constraints and export bottlenecks to ensure smooth exporting processes and creation of a robust ecosystem
- Uplifting Export Capacity and Capabilities
Strengthen SMEs’ production capacity and capabilities to enter the global value chain (GVC)
- Elevating Malaysia’s Strengths in Export
Extend the support to existing sectors with high potential to groom new champions across the supply chain, thereby stimulating the economy and promote export growth further
- Harnessing Growth Through Technology and E-Commerce
Strengthen bases of competitive advantage, work in partnership with industries and support them to scale up, increase productivity and internationalisation
- Facilitating and Widening Market Access
Continuously increase engagement with key markets to improve market access
- Promoting Malaysia’s Brands and Product
Increase the visibility of Malaysian brands on regional and international export markets
- Driving Growth Through Investment and Export Diversification
Attracting investments and diversifying exports would be critical for Malaysia to manage the uncertainties in the global trade environment
The fine print
- Pursuing Sustainability and Innovation
Encourage the adoption of sustainable good practices and standards
The NTBp sets out various action plans and strategies that are to be implemented to achieve the objectives under each of the strategic thrusts. For example, one of the initiatives to achieve the second strategic thrust (Uplifting Export Capacity and Capabilities) is to encourage multinational corporations in Malaysia to source locally through vendor development programmes.
The Executive Summary also identifies the key stakeholders who will be responsible to implement the various initiatives and the time frame (i.e. short-, medium- or long-term or continuous basis) within which such initiatives are to be implemented.1
These strategies have been developed based on studies of the existing export ecosystem in Malaysia and in some instances, seek to overcome the pain points that have been identified, e.g. low level of awareness of the range of trade financing assistance provided by government agencies and statutory bodies and barriers to access to financing.
Calling the shots
The Jawatankuasa Koordinasi Eksport (Export Coordination Committee) (‘JK-X
’) consisting of various Malaysian ministries and agencies involved in export promotion will be charged with the responsibility to govern the implementation of the NTBp initiatives . Where required, strategic decisions for the implementation of recommendations that require national level direction will be made by the Economic Action Council (EAC), chaired by the Prime Minister.
Seven Working Groups (‘WGs
’), each comprising representatives of the government and private sector, will be formed. Each of the WGs will be responsible to make recommendations and prepare an implementation plan for a specific area, e.g. investment, digitalisation and technology, standards and conformance, regulatory and logistics, innovation, and branding.
Eleven existing Sectorial Task Force (‘STF
’) will, among other responsibilities, align export promotion programmes, budget and policies relating to the sector under their purview. The STF will also discuss latest trends, developments and issues related to exports and propose potential solutions to meet these new challenges.
A Project Management Office staffed by MITI and MATRADE will monitor and report on export promotion programmes and NTBp recommendations.
According to the Executive Summary, the NTBp is intended to support the realisation of the 12MP and its priority goals. It is meant to complement other current policies and masterplans to create a more conducive business ecosystem. The Executive Summary cites at least 11 national level blueprints, masterplans and policies and six sectoral level blueprints.2
It is hoped that the collaborative approach adopted under the NTBp will achieve more effective overall results.
Much time and effort have been spent in preparing the NTBp. It is now time to put words into action to turn around Malaysia’s declining competitiveness as a global exporter.
Alert by Kok Chee Kheong (Partner) and Sheba Gumis (Partner) of the Corporate Practice of Skrine.