BUSSINESS TODAY - ISSUE 178 AUGUST 2013
The Malaysian diplomatic mission was established in Oman in 1983, but relations between the two countries date back to centuries. The seafaring skills of Omanis opened the first route of communication with Malaysia centuries ago. Not many people are aware that 'Halwa Muscat', clearly an Omani influence, has been a part of Malaysian cuisine even before the country attained independence.
Furthermore, the ceremonial jacket of Malaysia's king is referred to as 'Muscat' and it is known to have been brought from Oman. Today both countries cooperate in economic, technical and scientific sectors. Oman and Malaysia also have signed several MoUs in the fields of education, SME development, women, family and social development as well as cooperation in legal affairs.
“Malaysia is ranked as the world's 23rd largest trading nation with a total trade of US$423.7bn in 2012. Oman was ranked the 47th largest trading partner for Malaysia in 2012 with trade valued at US$556.4mn, a decline of 24.7 per cent from US$740.5 mn in 2011,” says H E Dato Rustam Yahaya, Ambassador of Malaysia in Oman.
The decline was attributed to the fluctuation in crude imports from Oman, even though Malaysia’s exports to the sultanate grew by eight per cent to US$259.2mn. Malaysia's main exports to Oman include machinery and appliances, palm oil, wood products as well as electrical and electronic products. Imports include chemicals, metals and refined petroleum products.
Growing opportunities
The Malaysian economy has made great strides since attaining independence in 1957. Encouraged by the country's pro-business environment, multinational corporations from over 40 countries have invested in over 5,000 companies in Malaysia's manufacturing sector and allied services. Today, Malaysia is among the top locations in the world for offshore manufacturing and service-based operations.
A few Omani companies have a presence in Malaysia, notably in rubber manufacturing and in the electrical and electronics goods segment. National Gas Company and MB Holding Company also have a presence in Malaysia. The notable Malaysian companies in Oman include Petronas (gas exploration), Malakoff (water desalination) and Meng How (cold storage).
The development of the Duqm special economic zone has been attracting the attention of potential foreign investors, and Malaysia is one of them. Says H E Dato Yahaya, “Duqm is a very strategic and bold move for Oman that can contribute to the country's development in the next decade and we are exploring opportunities here.”
At present, Oman ranks the lowest among top trading partners with Malaysia, but there is scope to strengthen cooperation in the fields of education and training, Islamic finance, hotel and tourism projects, agriculture and livestock, food precessing and healthcare services. In fact, Malaysia has been one of the frontrunners in investing in technology to develop halal medicines, a system that ensures that Muslims consume medicines that are fully compliant with Islamic law.
Says H E Dato Yahaya, “Not many people are aware of it, but we have collaborated with some other companies to develop the technology and produce halal medicines in Malaysia. There could be a huge market for this in Oman.”
Another high potential area of cooperation between the two countries is tourism. Malaysia is one of the most popular tourist destinations for Omanis. Over 26,000 Omanis visited Malaysia last year. Several Omanis have also bought properties in Malaysia.
“We received about 29mn tourists from across the world, and this is a huge number. We welcome tourists from the Middle East and we would be happy to have more visitors from Oman,” the ambassador said.
Investing in education
Rapid development and a negative rate of unemployment in Malaysia has meant that not too many nationals have been exploring opportunities overseas. At present, approximately 700 Malaysian nationals reside in Oman. “We almost have negative unemployment and there are plenty of jobs available in Malaysia, so there is no reason for them to go elsewhere,” says H E Dato Yahaya.
Recently, Malaysia announced its 10th Malaysia Plan, which comprises new policy directions, strategies and programmes that would enable the country to emerge as a high-income nation. Despite a weak international environment, the country attracted a high level of investment in the first quarter of 2013. From January to March 2013, investment worth over US$16bn was approved compared to US$11.1bn for the same period in 2012. This reflects Malaysia's competitiveness as a location of choice. Further, the country has recorded uninterrupted trade surpluses since the Asian financial crisis in 1997.
Malaysia's image as a low-end manufacturer and supplier of commodities globally, is quickly changing. “There was a time when lot of low-end technologies were being exported from Malaysia. Today, the focus is on developing new technologies like biotechnology and nanotechnology,” says H E Dato Yahaya. Technology of this nature could be of interest to Oman.
Another crucial area of development is in the field of education. Malaysia is known for delivering high-quality education to foreign students. At present, there are over 1,000 Omani students pursuing various technical and vocational courses in Malaysia. “We are promoting Malaysia for education. After we attained independence, the government spent up to 60 per cent of its income on education and sent students to study abroad. Today, it is cheaper to get a British university accredited degree from Malaysia than from Britain,” says H E Dato Yahaya.
“We are focusing on education and we have started some collaborations between Omani and Malaysian universities, which include an MoU signed with Caledonian college. Omani students have their own dreams and aspirations and engineering is popular with them,” says H E Dato Yahaya. He points out that Oman needs more engineers to keep pace with the development in the country. “There is more to this country than merely oil and gas. Oman needs to take education seriously because that ensures the future of any country.”
Political and economic stability is a characteristic that both Malaysia and Oman share. Malaysia takes pride in being an investor-friendly country with a cost-effective workforce, strategically located in the south-east of Asia. Oman's USP is also very similar. This is further indication that both countries can cultivate a stronger business relationship in the coming years.