MALAYSIA'S MONTH-ON-MONTH FOREIGN TRADE PICKS UP, SAYS MATRADE CEO

By Manik Mehta

NEW YORK, July 31 (Bernama) -- Though Malaysia's foreign trade on a
year-to-year comparison shows a decline, its month-to-month profile has improved
since the beginning of the year.

This is the conclusion drawn by Noharuddin Nordin, the chief executive
officer of the Malaysia External Trade Development Corporation (Matrade), who is
currently visiting New York.

Since the onset of the recession in many of Malaysia's important markets,
particularly the United States, Malaysia's exports have significantly declined.
American pundits and crystal-ball gazers, who had failed to recognise the
onslaught of the recession and the severity of the unprecedented economic crisis
that engulfed the entire developed world, have been making sporadic comments
about the recession having bottomed off.

But Noharuddin was cautious in his assessment of the global economic
situation.

"I cannot say with hundred percent certainty that the recession has bottomed
off; however, our exports are 20 percent down worldwide. The world economy is
still in a depressive state even as our month-on-month exports have shown a
positive trend since January 2009. There is clearly an upward trend if you
compare the monthly exports since the start of the year, though the annual
comparison with 2008 shows a decline," he said in an interview with Bernama at
the Matrade office in New York on Thursday.

Malaysia is increasingly facing fierce competitions from low-cost supplying
countries, notably China and Vietnam, even though the quality of its products,
as many experts agree, is better than those of its competitors.

Nonetheless, Malaysia's manufacturing industry is already migrating to
low-cost economies, particularly to Vietnam but also to farther sites such as
Bangladesh, Sri Lanka, etc. But Noharuddin asserted that manufacturing will
continue to be an important component of Malaysia's economy. Indeed,
manufacturing still dominates as the most important source of revenue for
Malaysia.

But Noharuddin also acknowledged that services would increasingly play the
role of an important source of revenue for Malaysia's economy. "Services export
earnings account for one-sixth of the earnings from merchandise," he maintained.

Giving an overview of the world markets, with particular reference to the
much-touted Chindia region -- the combined gigantic markets of China and India
-- Noharuddin felt Malaysia's exports to China and India would grow at an
"exponential rate" though he emphasised that it was equally important to target
the markets of Europe, United States, etc., with a view to increase the exports.

He admitted that the share of the United States in Malaysia's overall
exports had declined from 22 percent a few years back to 12 percent in 2008.

There are also marked vicissitudes that characterize the profile of
Malaysia's exports.

While the largest export group of electronics and electrical products
continues to dominate since two and a half decades, the individual products
embraced by this group have changed over the years.

While in the 1980s and early 1990s electronic finished products such as
cassette recorders, camcorders and similar items made up the largest export
category of electronics and electrical products, the group today comprises
largely of different electronic and electrical parts and components. "Integrated
circuits, for example, today constitute the leading item in the
product category," he explained.

Repudiating the perception in some quarters that Malaysia was overtaken by
low-end suppliers such as China, the Matrade CEO said that he was "fully
convinced" that Malaysia will always be part of the global supply chain.

"I do not believe that China will displace Malaysia any time in the future,"
he averred.

-- BERNAMA