Ingenieur Vol 63 Ingenieur Vol 63 2015 | Page 56

FEATURE INGENIEUR Malaysia’s Logistic Position – Capacity to Compete Globally By Lim Tau Wee T he word connectivity is being commonly used in many international forums on trade and investment. Global value supply chain which is the trend in the manufacturing world is premised on sound connectivity for that particular region. The last issue of “The Ingenieur” has deliberated at length the APEC Leaders declaration on the blue print for Global Value Supply Chain and also Connectivity when APEC leaders met in November 2014 in Beijing. Closely connected with this, one important factor for a nation to gain a foothold in the trading and manufacturing industry is strong logistic support that is available for the seamless movement of goods and services. The International Trade Unit of World Bank use the phrase “Connecting to Compete: Trade Logistics in the Global Economy” in their publication on details of the logistics performance of countries. It produces the Logistics Performance Index (LPI) every two years to gauge performance of countries in logistics. In the 2014 LPI, Malaysia was ranked number 25 out of 160 countries. This is one contributing factor that makes Malaysia a favourable place for doing business. The World Competitive Index 2014-2015 by the World Economic Forum places Malaysia 20th among 144 countries. The Economic Intelligence Unit 2014-2018 on Business Environment Ranking ranked Malaysia as a top 20 investor-friendly destination. 6 54 VOL – SEPTEMBER 2015 VOL63 55JULY JUNE 2013 With the introduction of new global investment funds, such as the Asian Infrastructure Investment Fund and One Belt One Road Fund, new opportunities of great significance are available for Malaysia in trade, investment and construction activities. The market will be getting bigger and economic activities will increase due to new funds to finance infrastructure works in Asia, Europe and Africa. ASEAN countries, especially Malaysia will stand to gain more being in the middle of the whole network. Some estimate the need for infrastructure development in this region to be in the order of US$ 8 trillion. It is therefore important for Malaysia to maintain and upgrade its LPI standing in Logistics. Malaysia’s Position Logistics performance is strongly associated with the reliability of supply chains and the predictability of service delivery for producers and exporters. Malaysia, as a trading nation and manufacturing base, relies, among other performance criteria, on a high LPI to compete in the globalized world where speed and quality of service delivery is of paramount importance. One of the six Strategic Thrusts under the newly announced 11th Malaysian Plan is on strengthening infrastructure to support economic expansion. It quoted that the efficiency of the logistics sector and trade facilitation will be enhanced, making Malaysia the preferred logistic gateway to Asia. With this, one would expect new ports and ports upgrading, expansion of bonded factory areas and airport expansion programmes. Engineers will have more roles to play in such infrastructure expansion works. Overall, it augurs well for the way forward for the Malaysian economy.