DAVOS, SWITZERLAND, January 19 – Although global trade is projected to reach US$32 trillion (RM138.6 trillion) in 2022, the outlook for 2023 is expected to be bleak due to lingering geopolitical tensions, high energy prices, rising interest rates and continued inflation, said the Trade Minister. International and Industry, Tengku Datuk Seri Zafrul Abdul Aziz. However, he said, the Ministry of International Trade and Industry (MITI) and its agencies such as the Malaysian Foreign Trade Development Corporation (MATRADE) have prepared to help industries and enterprises overcome the challenges caused by the expected slowdown in the global economy and trade.
“Those global factors are obviously beyond our control. But we can control policies that will, for example, help our key industries build supply chains and market resilience and develop our exporters’ capacity to meet market demands related to environmental, social and governance (ESG),” he said on Wednesday through his social media platform. Tengku Zafrul is currently leading the Malaysian delegation attending the 53rd World Economic Forum in Davos, Switzerland. In 2022, Malaysia’s trade will be worth RM2.8 trillion, surpassing the RM2 trillion mark for the second consecutive year. Exports reached RM1.6 trillion, surpassing the 12th Malaysia Plan (RMKe12) projection for 2025 by 24 percent three years ahead of target.
While imports surpassed the RM1 trillion level for the first time, reaching almost RM1.3 trillion in 2022. For 25 consecutive years since 1998, Malaysia recorded a trade surplus. The 2022 surplus is also the largest ever recorded. Given the challenging global landscape in 2023. MITI has begun exploring various avenues to protect demand, increase supply and ensure continued market access especially for Malaysian manufactured goods. He said, MATRADE and relevant investment promotion agencies under MITI will find ways how they can strengthen the business resilience of key industries from within.
Because this will be Malaysia’s best defense against external market volatility and help maintain jobs. “One of the main initiatives that will be pursued by MITI is implementing cooperation with relevant ministries and agencies through the Export Coordination Committee. “This is to ensure more efficient coordination of the export promotion program to generate and increase demand for Malaysian products and services in the international market,” he said. Through the Empower Trade Associations (ETA) initiative which empowers trade associations.
MITI will continue to support trade promotion activities especially high-value innovative technology-based products and services as well as ESG-compliant products) in new markets and Malaysia’s free trade agreement (FTA) partner countries. I am confident that this will enable more Malaysian companies to join new markets while strengthening their integration in the global value chain. The more diversified our markets are, the better we will be able to manage the risk of market turbulence,” said Tengku Zafrul. Commenting on mid-sized companies, he said the sector contributed 40 percent to the country’s gross domestic product (GDP) and employed 16 percent of Malaysia’s workforce in 2019.
“Despite making up less than two percent of businesses in Malaysia, mid-sized companies play an important role in developing the more than 7,000 micro, small and medium enterprises (MSMEs) involved in its ecosystem. MITI is looking for ways to better support these mid-sized companies and by doing so will further strengthen PMKS in the ecosystem,” he said. Tengku Zafrul also assured key stakeholders, especially industry and exporters, that the government will continue to ensure they benefit from the various FTAs that have been ratified by Malaysia including the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). .
He said, low tariffs and guaranteed market access will help make Malaysian exports more resilient in facing expected market challenges in 2023. “We will continue to monitor the global trade environment to ensure our exporters remain strong to face various trade and market issues.”I am confident that the cooperation between MITI, Matrade and industry players in implementing the national export program will provide more export opportunities and support the growth of Malaysian trade,” he said.