28 Sep 2015, HM

The service sector in Malaysia currently is looking towards an improvement in various aspects that is set to kickstart a positive effect for the nation. The share of services in the Malaysian gross domestic product (GDP) has expanded from 48.8% in 1987 to 60.8% in 2003 and this simple picture of services growth can only become clear in the near future.

As of mid-2005, Malaysia has received requests from twenty-one countries. Generally, the requests received covered a wide range of professional services, advertising, news agency services, telecommunications and computer-related services.

The Trials That Follow

The adoption of WTO trade rules in services presents us with opportunities as well as threats. One thing certain is that the globalization process will reduce the areas of domestic policies which can be manoeuvred, in Malaysia and other countries. Malaysian services industries will have to adapt to a more open market environment. In this context, the sector needs to build up efficiency, productivity and competitiveness to face a more global assault.

The Malaysian Ministry of International Trade and Industry (MITI) agrees that the services suppliers need to be ready and approach negotiations from the perspectives of both the external and domestic markets.

What Can We Do?

In preparing the services industry to meet the challenges posed by globalization, the government has developed and explored various strategies to enhance the competitiveness of the Malaysian services sector.

Some sectors, such as tourism, private education, promoted manufacturing services, health and construction services have been able to capitalize on greater market liberalization while others may face problems adjusting to the evolving landscape. These strategic initiatives are aimed at preparing services suppliers domestically and assisting thriving services exporters.

Embrace The Challenge

Malaysia is currently experiencing a ‘shifting of gears’ within the economic engine. Clearly much work needs to be done to achieve the ambitious target of growing our services contribution to GDP from 55% today to 65% or more by 2020.

With seven million out of the 12 million Malaysians who are in the workforce being employed in the services sector, it is clear that any changes that will impact this sector will have major consequences. The key is finding balance and a point that works for both consumer and service providers backed by solid support from the government and major players themselves.

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