KUALA LUMPUR: A more aggressive push is required to get Malaysian exports of professional services to other Asean countries, said International Trade and Industry Ministry Datuk Seri Mustapa Mohamed.
“We are faced with a big deficit when it comes to professional services as there are a lot more imports than exports,” he said, adding that the pace has been very slow to date.
For instance, in the area of legal professional services, only two large legal firms have made the move to expand their services in the region.
The ministry has highlighted the services masterplan for the growth of services in Asean. Two other professional services, engineering and architecture, have been earmarked too.
The ministry is the secretariat to oversee the services blueprint, which also covers consultancy, IT and education.
The Asean-India Trade in Services and Investments Agreement, which takes effect in July, provides business opportunities in skills development, knowledge-related, food and agriculture processing, urban infrastructure, energy and renewable power, biotech and tourism.
India’s Asean ambassador Suresh K. Reddy said the growing middle class population in the region is a boost to the growth of services.
“The promotion of cross border services is a question of perception and generally, there is resistance to (interested) services providers.”
However, Suresh was confident that the demand from the population would also create the market.
“Movement of people across borders is sensitive as professionals like doctors or chartered accountants may find their jobs threatened. But when looked at the value addition (in terms of benefits to the economies), it would be mutually accepted.”
Many Indian companies are already in Malaysia to headquarter the operations for their services business. This include Tech Mahindra which provides jobs for 600 Malaysians and similar Indian experiences are seen in the Philippines and Indonesia.
“The component of services in our economies has gone up. In India, we have ambitious plans and one of the key projects is Digital India where we propose to take digital technology to at least 1.3 million homes in India. This is an opportunity offered to Asean member states as the project is just too large for Indian companies to handle.”
Reddy also said awareness is the main reason for the slower growth of services.
“The Asean-India FTA on trade in goods has been in existence for five years but not all the industries are aware of it and it will be similar in the case of services.”
Asean-India Business Council co-chair Datuk Ramesh Kodammal said yesterday’s business forum can be taken to other countries in the region to enable small and medium enterprises to get away. Not only are the SMEs less well-versed with free trade pacts and how to utilise them, they are also not aware of the full potential of the huge middle class markets growing in Asean as well as India.
He described India as a grey market and opportunities abound with the Indian government’s thrust now attract foreign investments. Exporters from Singapore, Malaysia and Thailand are also working together to enter the market.