OPIC mission to Malaysia will find many business opportunities - Overseas Private Investment Corp - related article: "OPIC offers Investment Information"

Business America, May 26, 1986

OPIC Mission to Malaysia Will Find Many Business Opportunities

Years of sustained growth have made Malaysia a fertile area for investments, and a mission will visit there next month to explore opportunities that have sprouted under these favorable conditions. TheJune 20-28 mission is being organized and sponsored by the Overseas Private Investment Corporation (OPIC).

Mission participants will meet Malaysian officials in charge of encouraging foreign private investment; members of the U.S. Embassy staff; representatives of financial institutions and accounting firms; Americans already doing business in Malaysia; and host-country business officials seeking joint-venture partners.

OPIC, the federal agency that provides political risk insurance and finance services to encourage U.S. private investment in more than 100 developing nations, has received a list of project categories for which Malaysian firms are seeking U.S. private participation. They include:

Agribusiness: food processing and canning facilities, production of sauces, candy, fruit juices, soft drinks, flours, spices, meats, seafood, sago starch, and essential oils.

Timber products: manufacturing of moldings and furniture, production of pre-fab housing, building materials, fiberboard, parquet, coated plywood, paper and books.

Rubber: production of sealants, sports equipment, wiper blades, tires, adhesives, moldings, gloves, sheets, mattresses, belts, and shoe soles.

Manufacturing: manufacturing of roofing tiles, paint, telecommunications equipment, gypsum plaster boards, tin solders, clinical diagnostic reagents, conveyor belts, detergents, PVC pipes, fatty chemicals, crystal glassware, and concrete.

Additional project opportunities will be submitted to OPIC prior to the start of the mission. Firms that are interested in participating, but find no suitable projects listed above, should contact OPIC to determine if arrangements can be made to pursue their interests during the mission.

The price for each mission participant is $5,400. The fee includes roundtrip business-class airfare between New York and Kuala Lumpur, first-class hotel accommodations with single occupancy, transportation to and from scheduled events, meals as indicated in the schedule, and a pro-rata share of expenses.

For detailed information on the Malaysia mission, call or write Edie Stancioff, Investment Missions Officer, Overseas Private Investment Corporation, 1615 M St., NW., Washington, D.C. 20527; tel. (202) 457-7121.

A Look at the Economy

The American Association of Agricultural Consultants recently returned from a reconnaissance trip to Malaysia. Following is a summary of some of their findings.

Malaysia's economy, highly tradeoriented, is based on its abundance of natural resources, strong infrastructure, and diversified industries. This combination enabled high growth rates to be achieved during the 1970s, although growth has slackened considerably since 1982. The real gross domestic product, estimated at US$25, 198 million for 1985, reflects a 4.8 percent growth rate over the 1984 GDP, although many analysts believe these figures are optimistic due to the steady decline of world prices for Malaysia's chief exports. This slightly reduced growth should be considered in the context of a steady 8 percent growth rate over the last decade. Per capita GNP for 1985 stood at $2,021.

Malaysia had a trade surplus in 1985 of $2,757 million, with exports totaling $15,757 million and imports $13,000 million. Leading exports are petroleum, palm oil, electronic components, timber, rubber, liquefied natural gas, tin, electric products, and taxtiles/apparel/footwear. Major imports include machinery, transport and communication equipment, manufactured goods, refined oil, and food/beverages/tobacco.

Other leading economic indicators show a strong, resilient economy. Inflation was reduced from 3.9 percent in 1984 to 0.5 percent in 1985. Base lending rates fell from 12.25 to 10.5 percent over the same period. The Malaysian currency, the ringgit (M$ ), was relatively stable against the U.S. dollar (M$2.4=US$1).

With 50 percent of Malaysia's real GDP dependent on exports, its economic outlook for 1986 will be greatly determined by the performance of the economies of its major trading partners. Declining prices for its major exports could be compensated for by increased production of crude oil, LNG, palm oil and tin. The wealth of its resources, its record of good economic management, and its stable social and political institutions have underpinned strong growth in the past and should sustain reasonable economic growth through 1986 and the near future.

Economic Policy

Malaysia's economic policy is based on a pragmatic, fiscally prudent outlook, and emphasizes the development of the private sector, support for the indigenous people, and a drive toward industrialization, as articulated in the government's instrument for economic planning and management, the New Economic Plan (NEP).

The Fifth Economic Plan (1986-90), now in draft form, calls for increasing agricultural productivity, emphasizing tourism, and promoting industrial growth as set down in the Industrial Master Plan. This Plan especially encourages the value-added processing of Malaysia's agricultural production and the upgrading of its technological expertise in developing industries.