Malaysia and BIMP EAGA part 5 of 6

Today the Malaysian economy is again facing many challenges.  Malaya economy has come full circle.  Since the Export Oriented Industrialization strategy was successful, the Ministry of International Trade and Industry (MITI) did not put much emphasis in developing BIMP EAGA.  Sabah has always been the less priority state for MITI.

Today Malaysian industries and its export industrialization strategies are not contributing much to the national coffer.  Its traditional market like the US is not consuming and competition from China, India, Vietnam, and Indonesia is intensifying.  With the unemployment figures in the US not abetting and the possibility of another real estate crunch looming, consumption in the US will take a long time to recover.

It is time that Malaysia should look elsewhere for marketing its own products, specifically products from the Small and Medium Enterprises.  The Multi-National Corporations (MNCs) can look after themselves; the first quarter growth is impressive was because of stock clearance not due to new demand.

The MNCs are moving out of Malaysia, this also mean that unemployment in Malaysia will be on the rise.  The only way these excess labors will be absorbed back by the industries is when the SMEs start expanding.  The only way the SMEs can start expanding is when the market for their product increases.

This is where the government should play a critical role to help in expanding market for SMEs products.  The main problem is that all these years MITI has had it good.  Maintaining the tradition Malaysian market is a no brainer, it was the MNCs can do it all by themselves.

Now MITI have to roll-up their sleeves and do the work themselves because SMEs do not have the muscle to seek new market.  The question is can MITI does it?

The BIMP EAGA for example is much unexplored market but to penetrate this market means that MITI have to go into BIMP EAGA.  It is not enough just to go to Manila or Jakarta.

The other alternative is for MITI to link-up with the BIMP EAGA Business Council (BEBC) and go ahead from there.  However, the BEBC has met for the last 16 years still no progress in BIMP EAGA.

Another alternative is for MITI to reach BIMP EAGA through Institute for Development Studies (IDS) or Sabah Economic Development and Investment Authority (SEDIA).  Bothe organizations are in Sabah and perhaps they may have some idea on how to penetrate the BIMP EAGA market.

To make things easier for everyone the main problem in BIMP EAGA today is that no formal trading system exist.  Barter Trade exist but barter trading is a hundred years old system and no more suitable to manage trade today.

Some may argue that Barter trade is still relevant today, but these are the minority.  Their interest is to perpetuate barter trade is because it is lucrative for their present syndicate.  This however is not good for trading in the long-term.

Firstly, barter trade does not give the level of comfort for the producers and resellers.

Secondly, barter trade is uncertain and volatile therefore there is no security in selling as well as buying and ordering goods.

Thirdly, barter trade uses currency as commodity, the price of goods is based on the rate of currency and not the market demand for the goods.

Fourthly, because it is barter trading there is no formal transport system in place in the BIMP EAGA.  Goods transported in this way are not insured.  There is no way that a producer and reseller can be compensated if their goods are lost along the way.

These areas need to be addressed to exploit the BIMP EAGA as a vibrant Market.  Otherwise, for the next 16 years no changes is happening in BIMP EAGA.

Sabah Sifu


About sifusiber
A husband & a father who wants his children to have a better future

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