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PUTRAJAYA: Malaysia demonstrated commendable economic resilience by achieving a gross domestic product (GDP) growth of 3.6% in 2023. According to the Department of Statistics Malaysia (DOSM), the achievement was recorded amidst the challenging global economic environment, which includes geopolitical tensions impacting global markets, rising cost of living and commodity price fluctuations. “The services sector notably contributed to the growth with a robust performance of 5.1%, counterbalancing the manufacturing sector’s modest growth of 0.7% due to global economic challenges, including supply chain disruptions and fluctuating commodity prices,” said DOSM Chief Statistician Daruk Seri Dr Mohd Uzir Mahidin. He said that Malaysia experienced a notable influx of tourist arrivals in 2023, indicating a substantial recovery to 20.1 million tourists compared to 10.1 million tourists in 2022 when global travel restrictions were more stringent due to the pandemic. “Domestic tourism also improved, recording 213.7 million visitors, an increase of 24.6% against 2022 (171.6 million),” he said. Mohd Uzir noted that Malaysia will continue positioning itself as a resilient and attractive destination for global investors in 2023, based on its robust investment performance. “The influx of capital not only strengthened Malaysia’s economic resilience but also elevated its competitiveness in the global market. “The Malaysian Investment Development Authority (MIDA) reported that Malaysia secured approved investments of RM329.5 billion in 2023, a 23% increase compared to the previous year’s RM267.8 billion,” he said. Mohd Uzir added that despite facing a challenging global economic environment, Malaysia’s trade surpassed RM2 trillion for the third consecutive year, reaching RM2.64 trillion in 2023, with a trade surplus of RM214.1 billion. He said Pulau Pinang, Johor, and Selangor continued to lead as Malaysia’s top exporting states, contributing 31.4%, 20.3%, and 17.7%, respectively, to national exports. He said Malaysia’s inflation in 2023 eased to 2.5% from 3.3% in 2022. This was in tandem with the decline in most global commodity prices, the easing of supply disruptions, price controls and the provision of subsidies for selected goods. Additionally, Malaysia’s population in 2023 is estimated at 33.4 million, increasing 2.1% from 32.7 million recorded in 2022. “5 states, namely Selangor, Johor, Sabah, Perak, and Sarawak, registered a total population of 19.9 million people, contributing 59.8% to the total population. “The Labour Force Participation Rate (LFPR) increased by 0.7 percentage points to 70% in 2023, up from 69.3% in 2022. This increase was observed across all states compared to the previous year,” he added. — BERNAMA

KUALA LUMPUR: FGV Holdings Bhd has reinforced its commitment to sustainable practices with the first production of its European Union Deforestation Regulation (EUDR)-compliant crude palm kernel oil (CPKO). This achievement marks another significant milestone for FGV as one of the first Malaysian companies to produce EUDR-compliant CPKO, the company said in a statement. Primarily used in food and personal care products, including non-dairy ice cream, margarine, chocolate, confectionery, soap and detergent, CPKO is now produced in compliance with stringent EUDR standards. The EUDR is a legislative framework aimed at ensuring products imported into the European Union are free from deforestation and forest degradation activities. FGV’s ability to produce EUDR-compliant CPKO for clients worldwide showcases its dedication to upholding global sustainability standards and regulatory compliance. Group Chief Executive Officer Datuk Nazrul Mansor said FGV understand the critical role that businesses must play in addressing the pressing environmental and social challenges. “Our production of EUDR-compliant CPKO marks a major advancement for our operations and underscores our dedication to meeting stringent global environmental and social standards. “This achievement will positively impact our bottom line over time and reflects our proactive approach to environmental stewardship and our commitment to sustainable palm oil production,” he said. FGV has focused on sourcing its fresh fruit bunches from 3 key sources: its estates, the Federal Land Development Authority’s (FELDA) settlers, and independent smallholders who are already in line with EUDR, Malaysian Sustainable Palm Oil Certification (MSPO) or Roundtable on Sustainable Palm Oil (RSPO) traceability requirements. “We aim to expand the network of our business partners from among the smallholders, which in turn will generate better economic opportunities for them, and further enhance collective sustainability efforts of the Malaysian palm oil industry,” Nazrul said. Earlier in July, FGV launched its enhanced Sustainability Framework, advancing its commitment to the environmental, social and governance (ESG) goals. — BERNAMA

KUALA LUMPUR: Malaysia’s new national shipping policy must not only encourage the development of a robust domestic fleet to reduce dependency on foreign vessels but also provide more funding to modernise and accelerate the transition to green shipping. Industry players said the policy should prepare Malaysian shippers to navigate the shifting dynamics of global trade and a volatile environment due to unforeseen circumstances such as regional conflicts. They also hope that the new policy, which is expected to be presented to the cabinet by year-end, will focus on increasing Malaysian tonnage and reducing reliance on foreign vessels. On 4 July, Transport Minister Anthony Loke announced that a national shipping policy would be introduced to guide the local shipping sector in exports and imports and create new job opportunities. This was a timely announcement as the Malaysian Shipping Masterplan (MSMP) 2017-2022 was launched 5 years ago and is due for a review as the industry is still falling short of its targets. Strategic Maritime Position Undermined by Reliance on Foreign Tonnage Given its strategic location in the busy Straits of Malacca and part of the South China Sea waterways, Malaysia has long aspired to become a major maritime hub in Southeast Asia. However, it relies heavily on foreign tonnage, leading to a transport services deficit of RM7.80 billion in the first quarter of 2024. Against such a backdrop, the Malaysia Shipping Association Chairman Ooi Lean Hin emphasised that the nation must strategise and boost domestic shipping in the revised policy, which, he said, is the proper thing to do as Malaysia relies heavily on foreign vessels for maritime trade. He cited the Red Sea crisis where Yemen’s Houthis attacked mainly Israeli-linked vessels as a good example of how escalating geopolitical tensions affect Malaysian shipping, as it led to a surge in shipping demand and prices. For context, about 15% of the world’s shipping traffic, including 30% of global container trade, passes through the Suez Canal to and from the Red Sea. The wave of disruptions has led major shipping companies like Hapag Lloyd, CMA-CGM, Cosco-OOCL, MSC, and Maersk to reroute vessels to avoid the Red Sea and Suez Canal. Initially suspending their services in the Red Sea, they are now considering alternative waterways, resulting in soaring shipping costs, with ocean freight rates between various regions rising substantially. The rising tension has caused about 95% of vessels to reroute around the Cape of Good Hope, adding nearly 4,000-5,000 nautical miles and 15-20 days to their journeys. As of 18 January 2024, 158 vessels have rerouted away from the Red Sea, carrying over 2.1 million cargo containers. “Mainline operators would change their service route to service these now highly profitable alternative routes to ports near the conflict areas, and those servicing our domestic route would change or terminate their service to serve these routes,” said Ooi. Subsequently, local shippers complained that foreign shippers do not prioritise Malaysian goods, posing a significant threat to the national supply chain. “However, Malaysia can navigate this situation by building up the national tonnage, thus supporting the domestic economy,” he said. Given these challenges, Ooi called on the government to play a pivotal role by outlining clear policies that encourage and incentivise exporters and importers to prefer Malaysian tonnage when shipping their goods. Remove Financing Barriers and Introduce Malaysia’s Own Fleet Ooi believes that the government should remove barriers for ship owners to secure offshore financing, which would enable owners to tap financing options offshore since local banks generally shy away from vessel financing. Echoing the sentiment, Malaysia Shipowners’ Association (MASA) chairman Mohamed Safwan Othman said that MASA has also presented an alternative funding mechanism to the National Shipping and Port Council and should be able to finalise the details by the end of the year. However, he said he was unable to disclose further information on the funding mechanism. Additionally, both Ooi and Mohanmed Safwan proposed for Malaysia to establish its own fleet. “By having our own fleet, Malaysia can mitigate disruptions by maintaining trade routes and supply lines,” said Ooi. Mohamed Safwan noted that most of the strategic cargoes, such as petroleum products, palm oil, and coal are being transported by foreign vessels. “We are recommending to have the right policies to use our own Malaysian fleets. Apart from that, the support by the Malaysian local banks is vital,” he said. To recap, there is no specific fund allocated for the maritime industry in Budget 2024. Under the 2023 budget, a RM1 billion Maritime and Logistics Scheme was announced which boosted the maritime industry’s growth and accelerated the industry’s transition to green shipping. — BERNAMA

KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim has refuted claims that the monetary, fiscal and budget policies have not been successful in achieving the government’s promise of debt and fiscal deficit reduction. He stressed that the government is committed to lowering the national debt, which is currently being done. Anwar said there have been some hue and cry in the past few weeks suggesting that the government was not telling the truth and has reneged on its promise. “We have been attacked on social media, but the information given is false,” he said in a video posted on X, adding that some of the claims are unfounded and irresponsible political swipes. Previously, Anwar announced that the government targets to reduce annual borrowing to RM86 billion this year from RM93 billion in 2023 and RM100 billion in 2022. He noted that the present government had inherited debts topping RM1 trillion and the figure even reached RM1.5 trillion. Anwar explained that at the same time, the government could not simply eliminate all debts as this would affect projects that are meant to help the people as well as obligations to repay old debts, among others. “The debt level is high and now stands at 64% of gross domestic product (GDP). Our target is to reduce it in stages to at least 60%,” he said. According to Anwar, the national fiscal deficit has been lowered to 5% of GDP in 2023 from 5.6% in 2022 and this year it is projected to be reduced to 4.3% “I present these figures, which are being defended as being truthful. The Finance Ministry, along with the Department of Statistics Malaysia, release such data from time to time,” he added. — BERNAMA

Malaysia has been in focus when it comes to data centre investments, with areas like Johor Bahru, Cyberjaya and Kulim being the busiest. Earlier in June, an international news portal reported that Malaysia is emerging as a data centre powerhouse in Southeast Asia and the continent more broadly as demand surges for cloud computing and artificial intelligence. Over the past few years, the country has attracted billions of dollars in data centre investments, including from tech giants like Google, Nvidia and Microsoft. According to DC Byte Managing Director of APAC James Murphy, Johor alone might overtake Singapore by becoming the largest market in Southeast Asia within a couple of years. In light of this, the Malaysian government plans to announce guidelines for data centre power usage effectiveness (PUE) and water usage effectiveness (WUE) by the third quarter of the year to boost investments. On this, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the guidelines would ensure data centres built in Malaysia meet the minimum sustainability requirements to achieve net-zero emissions by 2050. “As data centres consume a lot of power and water, we want to ensure that the data centres built here (in Malaysia) meet the minimum requirements set by global institutions. “SIRIM and the Department of Standards Malaysia are in the midst of finalising (the guidelines), and we will announce them by the third quarter of this year,” he said after the groundbreaking ceremony for Vantage Data Centres’ second campus (KUL2) in August. Tengku Zafrul said the Ministry of Investment, Trade and Industry Ministry (MITI) will work closely with the Digital Ministry and Malaysia Digital Economy Corporation (MDEC) to incorporate the improvements into the data centre ecosystem. Meanwhile, Digital Minister Gobind Singh Deo said the two main challenges for data centre investments are power and water, hence the guidelines being developed will ensure that the country has a sufficient and sustainable supply of both resources for the next five to ten years to attract more investments. Gobind also said the Digital Ministry and MITI are working together to address concerns about sufficient water and electricity supply due to significant demand from industry players. “We need to push ahead to ensure we can develop Malaysia as the hub for data centres in this region, particularly as we move towards the country’s ASEAN 2025 chairmanship. “We want to project Malaysia as a country with clear policies that are attractive not just to data centres but all investments in that ecosystem as well,” he said. Vantage’s KUL2 is located adjacent to its existing campus in Cyberjaya. It will have 10 facilities across 256,000 square metres. The US$3 billion KUL2 data centre campus will deliver 256MW of information technology (IT) capacity to meet the growing demand for hyperscale data centre services. Cyberjaya Increases Attractiveness for Hyperscale Data Centres Cyberjaya, as the preferred tech (technology) investment location, remains attractive to hyperscale data centres, with a few more operators coming on board soon, said Cyberview Sdn Bhd Chief Executive Officer, Kamarul Ariffin Abdul Samad. He said that to date, the city is home to 15 data centres, which consist of commercial and captive data centres, including hyperscalers, among the operators of which are Equinix, Bridge Data Centre, EdgeConnex, Microsoft and NTT. “We still have good enquiries from more data centres and it shows that Cyberjaya is the preferred location for data centre operators. I cannot reveal it now because it is still being negotiated. We will make the announcement at the right time,” he said. Kamarul Ariffin said that with growing interconnectedness, automation, and massive data processing, data centres, which are the very backbone of the digital economy, first and foremost contribute directly to enhancing the overall digital infrastructure. He said in ensuring that investors are well-supported, Cyberview puts in place the required elements which include enhancing and optimising its infrastructure. “Some data centres that are going to open in Cyberjaya are already artificial intelligence (AI)-ready. Some of the centres being constructed here are building Al data centres so it can convert from hyperscale to Al when the need arises,” he said.