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.
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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.