Saudi Arabia can leverage on Malaysia to increase Asean presence

KUALA LUMPUR, Feb 24 — The strong bilateral ties between Saudi Arabia and Malaysia can serve as an advantage to the kingdom in furthering its presence in Asean.

Malaysia can be a strategic regional hub for Saudi businesses in being strategically located in the heart of Asean, a region with a combined population of over 625 million people and total combined gross domestic product of US$2.43 trillion as at 2015.

As such, the Malaysian Investment Development Authority (Mida) has encouraged countries including Saudi Arabia, to leverage on Malaysia as a gateway to the enormous Asean market and beyond.

By being in Malaysia, Saudi Arabian companies can leverage on the country’s logistics advantages for regional establishments.

These include Malaysia’s licensed manufacturing warehouse facilities, efficient customs handling procedures, proximity to quality suppliers of electro-mechanical systems, excellent infrastructure, competitive costs, qualified supply chain and competitive human capital and talent.

“We look forward to more quality investments from Saudi Arabia to contribute to Malaysia’s developmental goals,” Mida said in a written reply to Bernama.

As at September 2016, there were 16 manufacturing projects with Saudi Arabian participation having been approved, with investments worth US$1.61 billion (RM4.98 billion) and generating 2,395 job opportunities.

These projects are concentrated in the chemical and chemical products, electronics and electrical products, food manufacturing, textiles and textile products, plastic products, non-metallic mineral products, machinery and equipment and scientific and measuring equipment industries.

Meanwhile, Malaysia and Saudi Arabia’s strong bilateral ties have embraced trade and economic relations, since diplomatic relations were established in early 1960.

In 2016, Saudi Arabia was Malaysia’s 19th largest trading partner globally, with total trade of RM13.12 billion, an increase of 19.8 per cent from the RM10.95 billion recorded in 2015.

In terms of trade numbers, Malaysia’s exports amounted RM3.15 billion and imports at RM9.97 billion, due to higher imports of petroleum products and crude petroleum from the kingdom.

Malaysia’s biggest exports to Saudi Arabia were palm oil and palm-based products (17.6 per cent), machinery, equipment and parts (11.3 per cent), processed food (11.1 per cent), electrical and electronic products (10.3 per cent and manufacture of metal (9.0 per cent).

Malaysia’s biggest imports from Saudi Arabia in 2016 were chemicals and chemical products (40.6 per cent), crude petroleum (30.8 per cent), petroleum products (23.4 per cent), manufacture of metal (4.3 per cent) and manufacture of plastics (0.2 per cent).

Former Malaysian Ambassador to Saudi Arabia Prof Datuk Syed Omar Syed Mohamad Al Saggaf said the kingdom is a developing nation in terms of infrastructure, transportation and residential development.

He told Bernama in a phone interview that Saudi Arabia could develop further, but lacked expertise, and as such, Malaysia can play an important role in its development.

Since Saudi Arabia is reducing the dependency on oil revenue, he said diversification was the way forward and again, this is where Malaysia could be useful to the country’s ambitions.

“Saudi Arabia looks at Malaysia as a developed economy, especially in the field of technology.

“We need to see the visit of Saudi Arabia’s King Salman bin Abdul Aziz al Saud to Malaysia as a platform to strengthen economic relations between both countries,” he said.

King Salman will embark on a 31-day Asian trip next week, which would take him to six countries and he will visit Malaysia from February 26 to March 1.

Syed Omar who had a five-year stint in Saudi Arabia from 2008, said there have been a number of mega projects by Malaysia there, but some failed to materialise due to technical issues.

He expects this visit to also come out with solutions to ease the way of doing business between the two countries.

“We need to build fundamentals in certain areas, namely healthcare, food security and construction,” he said, adding, the last visit by the late King Abdullah Abdulaziz of Saudi Arabia, was during the leadership of former prime minister Tun Abdullah Ahmad Badawi.

“This is a once in a lifetime opportunity,” said Syed Omar who is currently the Halal Industry Development and Islamic Tourism Director at the Malaysia International Institute of Islamic Cooperation (Ikiam). — Bernama