Overcoming labour force shortages and government policy reforms key to future Malaysia – France Investment Opportunities

Kuala Lumpur, 3 November 2022 — France and Malaysia had a successful consultation meeting recently, chaired and moderated by ASEAN Business Advisory Council (ASEAN-BAC) Malaysia Chairman Tan Sri Dato’ Dr. Munir Majid, with the presence of Ms Virginie Bioteau, Chargée d’Affaires and Mr Michel Cywinski, the Economic Counsellor of Embassy of France in
Malaysia.

The closed-door consultation meeting was convened by ASEAN-BAC Malaysia council members with five stakeholders involved in Malaysia-France trade relations. Tan Sri Dato’ Dr. Munir Majid believed there is plenty more that France could do to make Malaysia the springboard to ASEAN, especially in Industry 4.0.

“France could also use Malaysia as a base to expand education and training in the region, especially in high technology,” he added in his opening remarks.

ASEAN-BAC Malaysia council member Raja Singham also urged Malaysian businesses to work with France to leverage growth in the area of new technologies and biotechnology. Drawing inspiration from Paris and how it was a fashion capital in the world, he suggested Malaysia could be an opportunity for the French.

“Malaysia could become the launchpad for France’s fashion industry into ASEAN and the gateway to launch ASEAN fashion to an international market,” Raja Singham elaborated.

Another ASEAN-BAC council member Tan Sri Yong Poh Kon also said: “Further links with France through investment and trade will progress and with the ending of the pandemic, it is hoped that tourism, which is an important sector for both countries, will continue to grow.”

Tackling Labour Force Shortages and Value Chains Restructuring

Virginie Bioteau, Chargé D’affaires, Embassy of France in Malaysia, together with the Economic Counsellor Michel Cywinski, who represented and spoke on behalf of the Embassy at the consultation meeting, noted that the pandemic has affected bilateral trade between France and Malaysia by 33% between 2019 and 2020.

“The situation was slightly better in 2021 by 6% year-on-year, but the figures do not reach the pre-Covid period. The global economic recovery as well as the strong domestic demand in Malaysia have been benefiting local businesses since late 2021 but new challenges have emerged and will have to be addressed, such as inflation, labour force shortages and value chain restructuring,” Michel Cywinski continued.

The meeting discussed challenges and expectations on how to tackle the issues raised and explored avenues for better cooperation between both countries, and within the ASEAN region.

French Footprints in Malaysia

Executive Director of Investment Promotion of Malaysian Investment Development Authority (MIDA) Najihah Abas noted the long presence France has had in the country’s manufacturing and service sectors.

“Many French companies have set foot in Malaysia prominently and continue to have a strong interest in establishing their businesses in Malaysia with their strategic business partners, especially in the aerospace, biotechnology, advanced chemical, medical devices, halal products and construction sectors,” she said. “These companies have also utilised France as a springboard to Europe by expanding their footprints to commercialise Malaysian products and services.

Expressing the same sentiments as Najihah Abas, Secretary-General & Vice President (ASEAN) of French Foreign Trade Advisors (CCEF), Malaysian Chapter Milko-Pierre Papazoff also said that several of its members, part of the Malaysian Chapter of the French Foreign Trade Advisors, are contributing to Malaysian development, in terms of investment, technology, research and development (R&D), and entities like energy, transport, renewable energy and
industry 4.0.

“We hope to further enhance and support any cooperation with the various Malaysian authorities and entities as well as to emulate more communication among ourselves. Tax incentives, visa facilities and business-friendly policies are key to keeping and reinforcing Malaysia as a regional hub” he said.

President of Malaysian French Chamber of Commerce and Industry (CCIFM) Richard Fostier expressed that CCIFM stands in strong partnership with Malaysian authorities to continuously find the best conditions to promote Malaysian and French investments, businesses, and industrial opportunities.

Recognising that French firms are known for their expertise in R&D, he said “we feel strongly that our SMEs can learn from their French counterparts and benefit mutually from our various regional cooperation.”

Senior Manager of Investor Relations – Europe of InvestKL Corporation Aidil Azman commented that forward-looking policies will transform Malaysia’s investment agenda. “Underpinned by a technology-enabled ecosystem, robust infrastructure and dynamic talent, Greater KL is home to an ever-growing number of leading French multinational companies looking to rise in Asia,” Aidil Azman said.

Upcoming Challenges to Tackle

La French Tech Malaysia Board Member Camille Delauney highlighted that immigration issues and talent hiring are the two key hurdles faced by the tech entrepreneur community in Malaysia, especially at the height of the pandemic.

“Companies face difficulty in securing short-term tech talents while some foreign talents who have been in Malaysia for over 5 years found it challenging to renew their employment passes or secure a longer-term visa despite hoping to continue creating impact in Malaysia. The minimum capital requirement of RM500,000 for visa application is challenging for start-ups and foreign entrepreneurs. Although Malaysia Digital Economy Corporation (MDEC) recently launched the Malaysian Tech Entrepreneur Programme (MTEP), the access to this programme remains limited,” she said.