Malaysia dubbed with Hong Kong and Taiwan the “tiger economy” in booming south East Asia has been slow to form a business relationship with Ethiopia. But that seems about to change with the visit of a Malaysian delegation to Ethiopia on March 19 and 20.
Aureen Jean Nonis is Director of the Lifestyle Section/Africa at the Malaysia External Trade Development Corporation (MATRADE) which is a government agency under the Ministry of Trade and Industry of Malaysia operating to promote the export of Malaysian products and services in International Market.
Aureen Jean Non sat down with Capital’s Elias Gebreselassie to talk about the trade delegation and other aspects of the business relation between the two economies. Excerpts:
Capital: How many Malaysian businesses accompanied this mission to Ethiopia and why?
Aureen: We have a total of seven companies from Malaysia who’ve joined this mission to promote Malaysian Products abroad; exploring business opportunities in Ethiopia and networking to acquire business contacts with the Ethiopian business community and, most importantly, to help promote the exports of Malaysian Products to the Ethiopian market.
Capital: What types of businesses are they?
Aureen: Companies dealing with cleaning products like brushes, mops, detergents as well as base chemicals used to produce detergents for dish washing; companies selling home appliances like TVs, LCDs, freezers as well as electronics like tablets and we have companies selling apparels for men and women. We also have in our group companies promoting automotive batteries.
Capital: In Ethiopia when people think of Asia, they think of China; what can you do to get people more excited about Malaysian products?
Aureen: We are fully aware that Chinese products are already in Ethiopia but we are offering quality. We’re not competing with the Chinese on price because we know their bottom line is very low, however our products are competitively priced, quality and reliable. Malaysia is in the top 23 in global exports; so you can see we are very reliable, we are able to produce high quality products at very good prices, that’s our advantage.
Capital: This is the first time an official delegation from Malaysia has come here; what took you so long?
Aureen: Malaysian businesspeople do come to Ethiopia. Malaysian companies have done a lot of business abroad through organizations like the Association for South East Asian Nations (ASEAN).
Most are in Palm oil, others invested in furniture. I can’t remember off hand their numbers but I know that there’s a substantial Malaysian interest in these two sectors.
Capital: What is the current status of trade relations between Ethiopia and Malaysia?
Aureen: Bilateral trade between Malaysia and Ethiopia currently stands at USD 85 million of which Malaysia exports to Ethiopia about USD 84.4 million and Malaysia imports a little more than USD 600,000. The bulk of our export is Palm oil about 85 percent of it, followed by rubber products.
Capital: Malaysia is becoming one of the top destinations for Ethiopian students. What are the most popular fields?
Aureen: We have really promoted our schools and many students are coming. We provide a syllabus approved in the United Kingdom, Australia, US and if you study in Malaysia you can graduate with a UK, US or Australian degree. It’s a special program where we collaborate with foreign universities. Though I don’t have the number for Ethiopian students or the community in Malaysia, we do have a lot of African students.
Capital: Malaysia is known for rubber and Palm oil; two things the Ethiopian government is trying to promote. What can you do to assist local companies who want to invest in these products?
Aureen: We are willing to help but in this mission we don’t have companies dealing with Palm oil and rubber, basically because Palm oil is quite established in Ethiopia, with many of the Malaysian companies coming on their own. However, those companies are willing to share their knowledge and know-how with Ethiopian partners on a joint partnership basis about the manufacturing and technology of various products, including rubber and palm oil. We have a special organization, called the Malaysian Palm Oil Board and every year they have conferences where they bring experts to Malaysia from abroad and demonstrate advances in Palm oil.
Capital: What about environmental concerns with regards to Palm Oil and Rubber?
Aureen: In Malaysia a lot of land has been cleared or been replanted to produce Palm Oil. The government has incorporated a policy encouraging the rubber plantations and now we have a strategy by which certain acreage of land has to be rubber and certain acreage has to be Palm oil. Our rubber crops are used for latex and after a while when the tree is already matured they will cut the tree to use it for wood for our furniture industry.
Capital: What experiences can Malaysia share as it seeks to transition to a diversified, industrial economy?
Aureen: Malaysia is very open to assisting developing nations. We have cooperation programs whereby the Ethiopian Investment Agency came (EIA) to Malaysia to study our policies and procedures. I just met a gentleman from EIA while in Malaysia. Ethiopia has incorporated an investment policy similar to what Malaysia has done. Sometimes we have a lot of foreign delegations that come and they come into different government agencies, we do presentations to explain about how we do our work. It’s very common in Malaysia to receive delegations from Africa.
I think the Ethiopian government has done very well as far as investment is concerned, we had just heard a presentation by EIA. I think you have a very good tax incentive and facilitate procedures for bureaucracy; I was informed that it takes only half a day to get all the approval done, I think Ethiopia has done very well and is diversifying its economy. It takes time; it doesn’t just happen overnight. Malaysia became independent in 1957, we started off planting a lot of rubber and then we moved into palm oil. In the 1970’s we did import substitution whereby we attracted foreign investments from Japan and others, which took time. In the 1970’s it was import substitution, in the 1980’s it was export policy, in the 1990’s it was high value technology products and in the 2000’s it was strategic products and services so it takes time. We focus on one industry per decade. After 50 years of independence currently we have a diversified economy. Likewise I think Ethiopia is on the right track but you will see the fruit of your results one decade or maybe two decades later.
Capital: What incentives do you think could help investment?
Aureen: I think there are a lot of things that can be done in your country because you have a very huge population of 85 million people which obviously needs consumer products. We have a lot of consumer products that we can provide to Ethiopia, as far as manufacturing is concerned we also have the right people to offer you. The challenge is to identify bright Ethiopian partners with capital to be linked with our Malaysian companies who can offer the know-how. As far as infrastructure is concerned, that requires a lot of capital investment. This could be aided by the entry of foreign banks to the sector.
Capital: What about promotional activities?
Aureen: You see we have our constraints too we can’t come here very often, because we have to do so many things, we come here with a hope that our private sector can make a return visit to Ethiopia on their own. We hope that the contacts they make today can spur them to make a return trip in a couple of months to meet up with their Ethiopian counterparts, nevertheless we now operate in a borderless environment where we have a very good IT infrastructure.
In this regard the Malaysia External Trade Development Corporation (MATRADE) has a very good website www.matrade.gov.my. Ethiopian companies who want to search Malaysian products can search for anything on that site. If they need our assistance we can always link them up to the Malaysian suppliers. Nevertheless, Ethiopian companies can also come to Malaysia to do their searching. Every year we have two programs whereby we invite foreign buyers to Malaysia to do sourcing and we arrange business meetings just like today. One of the events is called the Malaysian International Halal showcase and the International Trade Malaysia which falls in November. So when the Ethiopian companies join our programs we provide them free accommodation and we also provide them with local transportation where we arrange the meetings for them; so the Ethiopian business community only has to buy its own air tickets. For such kind of information my colleague based in Cairo, Egypt will be communicating with the local Chambers of Commerce to disseminate the invitation.
Capital: What is Malaysia’s principle of economic engagement in the world and especially Africa?
Aureen: We would like both nations to grow while we promote the exports of Malaysian products. We feel that our counterparts should reciprocate in this regard and also promote the exports of their products to Malaysia. So it’s for mutual gain because our products are very good quality, affordable and we also want to share our knowledge with the Ethiopian business community because by working with us you will be able to see our work ethics and professionalism which you can emulate and we want to learn from your business community as to how to do business in Africa.
Capital: Any last comment?
Aureen: There is a lot of potential between Malaysia and Ethiopia. I think it is about the business community working together like today where we brought a group of Malaysian companies to export their products to Ethiopia. Likewise we hope that the Ethiopian counterpart can reciprocate and bring a business delegation interested in exporting to Ethiopia, in doing so we can improve and increase the bilateral trade and make it more favorable for Ethiopia, which isn’t the case right now. Ethiopia does a large amount of agricultural produce, a lot of minerals where Malaysia can import for manufacturing.