MIDA bids to reduce services sector deficit via i-Services Portal
21 Mar 2019
The agency said one of the ways to close the deficit in the services trade current account is to reduce dependency on foreign services and to export home-grown services to the global market.
Local service providers are encouraged to register their businesses with the portal to be more visible and accessible to potential customers.
The three main objectives of the portal are to assist investors looking for local service providers, promote and encourage the utilisation of local service providers for investment projects and facilitate connections to other programmes organised by MIDA or other agencies.
This gateway would be an avenue to market the services of the local service providers and their solutions locally and abroad, it said.
“Local service providers should leverage on this portal as a medium to expand their markets and catapult their business activities in today’s globalised and rapidly changing business environment.
“Domestic and international companies could also avail themselves to this portal as a gateway to source local services, which provides a cost-efficient and convenient way of conducting business,” it said in the Malaysia Investment Performance Report 2018 released recently
The report noted that Malaysia has recorded a deficit in its services trade current account from 1947 until 2017 (except from 2007 to 2011) and this deficit has been widening since 2012.
The deficit stood at RM22.8 billion in 2017.
Malaysia’s major sources of services exports were travel, especially personal travel and other business services such as research and development services, professional and management consultancy services and technical, trade related and other business services.
On the other hand, services imports were mainly derived from higher payments for travel, transport and construction, it said.
The agency said although exports of services have been in the upward momentum since 2010 (increasing by RM47.7 billion within the last 7 years), corresponding imports have accelerated at an even faster pace with a value of RM77.1 billion, resulting in a widening of the deficit in the services trade current account.
Citing Malaysian Institute of Economic Research (MIER) Malaysian Economic Outlook 2018 report, MIDA added the trend is expected to persist this year, owing to the nation’s high dependency on foreign services, particularly for freight and haulage.