Malaysia needs to invest more in technology say experts
PETALING JAYA, MALAYSIA, The Star/Asia News Network
October 11, 2012, 12:11 am TWN
The Star/Asia News Network--The Malaysian government should look into providing more tax incentives to attract more high value-added technology into the country against the backdrop of fast-rising Asean countries such as Indonesia, Myanmar, Thailand and Vietnam, experts said yesterday.
The experts, who attended the Deloitte TaxMax forum discussion in Petaling Jaya, said the country would then progress into the next stage of development and rely less on cheap foreign labor to power up its crucial industries,
Deloitte Managing Director Yee Wing Peng said Malaysia needed to step up and invest more in technology “so that we can break away from the middle income trap.”
“We are neither here nor there; we can't compete with the advanced countries in terms of technology. We also can't compete in terms of low cost labour as we are outclassed. Investment in technology is key for our future success and sustainability,” Yee said at a press conference after the forum in Petaling Jaya yesterday.
Commenting further, the EU-Malaysia Chamber of Commerce and Industry chairman David Jones said an incentive was needed for investment in high-tech processing or manufacturing of equipment.
“Many are happy with the status quo today. As long as you can continue to employ cheap foreign labour for the country — (but) is this necessarily going to be an advantage for Malaysia going forward?
“I would argue that it's not because Malaysia is employing a lot of foreign labor on a contract basis and at the end of the contract period they have no interest of the long term future of Malaysia,” Jones said.
“If you're not careful, they will leave these companies both foreign and domestic (located in Malaysia) as they are starting to do now and will start (similar) operations offshore and they will start to go to places such as Vietnam and Indonesia as they continue to grow. Malaysia has to be wary of (this trend),” Jones added.