Tan Sri Mohd Sidek Hassan

Tan Sri Abdul Rahman Mamatincreasingly skewed towards services investment. The United Nations Conferenceon Trade and Development’s World Investment Report 2004 indicated that thestructure of FDIs has shifted towards services.In the early 1970s, the services sector accounted for only 25% of the world FDIstock. In 1990, this share was less than 50%. And by 2002, it had risen to about60% or an estimated US$4 trillion and that of manufacturing fell from 42% to 34%.On average, services accounted for 66% of total FDI inflows during 2001-2002,valued at some US$500bil.The report also indicated that as service industry players become moretransnationalised, there is scope for a further shift towards growth of servicesFDIs. The recent Government announcement on the liberalisation of 27 servicessub-sectors is in line with the strategyof progressive liberalisation. Among thereasons for the liberalisation is to explorean area of new economic growth for the The presence of foreignnation. The move to liberalise the sectorplayers can help boostwill attract FDIs and bring technology andtechnical skills into the country.the capacity of Malaysia’sThe presence of foreign players can help services industry.boost the capacity of Malaysia’s servicesindustry. Other benefits attached will bein the areas of employment opportunities,local and foreign partnerships, and the creation of export opportunities. Localservices providers are being assisted by the RM100mil Services Sector CapacityDevelopment Fund to better equip them in facing the open market. The fund maybe used for training and outreach programmes, enhancement and modernisation,accreditation, and mergers and acquisitions.They are also being assisted through the Services Export Fund to promote theirservices overseas. In short, with adequate preparation, the move to liberalise theservices sector will be beneficial to the economy and the people at large. Malaysia’sindustries too need to export, for our market of 27 million cannot consume all thegoods and services produced in the country. If we want to sell in other marketswith minimum impediments, then producers from those markets expect the samefrom us.The calls by leaders for all nations to refrain from protectionist measures at thistime of economic slowdown is a clear indication that all parties need to be mindfulof their responsibility in contributing towards an open-trading environment. Whenthe global market becomes restrictive, not only will industry be affected butconsumers will also suffer from the lack of options.31