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ECONOMIC ASPECTS OF SUSTAINABLE DEVELOPMENT IN MALAYSIA

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INTERNATIONAL COOPERATION

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects   

No information is available.

Status   

No information is available.

Challenges  

No information is available.

Capacity-building, Education, Training and Awareness-raising 

Training programmes are being organized by the Malaysian Technical Cooperation Programme and the National Institute of Public Administration to train officials from other developing countries on economic and environmental management.

Information   

No information is available.

Research and Technologies   

No information is available.

Financing   

No information is available.

Cooperation  

No information is available.

 

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This information was provided by the government of Malaysia to the 5th and 8th Sessions of the United Nations Commission on Sustainable Development. Last Update: February 2000.

For information on regional and international cooperation, click here:
Click here to link to biosafety web sites in Malaysia.
Click here to link to the Biosafety Information Network and Advisory Service (BINAS), a service of the United Nations Industrial Development Organization (UNIDO), which monitors global developments in regulatory issues in biotechnology.
Click here to go to the Web Site of UNEP's International Register on Biosafety.

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TRADE

Decision-Making: Coordinating Bodies   

The Department of Environment (DOE) was established to deal with environmental matters. A ministerial Council oversees the implementation of the Common Effective Preferential Tariff Scheme (CEPT). Various domestic governmental and non-government agencies participate in consultations on the feasibility and national implications of an international timber certification scheme.

Decision-Making: Legislation and Regulations 

The national legislations and regulatory regime in Malaysia has been strengthened to minimize the negative impacts of trade and investment on the environment. Environment impact assessment is now a mandatory requirement for certain industries and activities.

Decision-Making: Strategies, Policies and Plans  

As member of ASEAN, Malaysia favors liberal trade policies and is working towards the greater liberalization of international trade. A priority is to increase trade regionally and internationally (most trade is presently with Europe and the USA).

National priorities for Malaysia in this area include increased foreign investments and shifting the economy to manufacturing and export-oriented trade.

Other priority concerns include the stockpiling of certain commodities, imposition of high tariffs on value-added or finished products and commodity pricing strategies which do not reflect true costs of production and/or extraction (e.g., environmental and socio-economic costs). External forces in setting commodity pricing strategies by non-producer countries are a major concern.

Decision-Making: Major Groups Involvement  

See under Decision-Making: Coordinating Bodies.

Programmes and Projects 

Structural adjustment programmes have been implemented to change the economic base from resource- intensive to manufacturing and export-oriented trade. There is a lack of clarity on the linkages between international trade, local industrial development and the environment among all levels of government. Work is in progress to improve techniques for assessing the linkage between trade and the environment. Capacity- building priorities include improving environmental accounting skills, policy analysis and centralized planning and evaluation skills.

Status 

The increase in trade and investment has contributed towards the decline in incidence of poverty in Malaysia. Per-capita income has grown over the years corresponding to the increase in manufacturing sector’s contribution to GDP and the increasing importance of trade to the national economy. The incidence of poverty and hard-core poverty has also decline over the years as a result of the increase in job opportunities arising from the influx of foreign direct investment.

Over the years, there has been an increase in production and export of manufacturing products, which had replace the export of primary commodities as the main export earners for the country. There has also been increased in value-added in the manufacturing sector resulting from processing of primary commodities into finished products for the export market. The production of manufactured products has also shifted from the initial focus on production of import substitution products to export oriented products like electrical and electronics, textiles, chemical and chemical products, etc. The current focus is on high-tech industries and promoting multimedia and information technology industries.

The rapid growth of the manufacturing sector has had a direct impact on the planning and development of infrastructure, new growth areas, industrial estates, business and residential housing, etc. Manufactured goods, such as textiles and high-technology computers, are playing an increasingly important role in external trade.

Increases in manufactured exports certainly have a direct correlation with increased environmental impact on Malaysia.

Challenges  

No information is available.

Capacity-building, Education, Training and Awareness-raising   

No information is available.

Information 

MITI has published a 'MITI Annual Report’ on issue related to trade and investment. This report will be distributed to other government agencies and relevant associations.

Information related to trade, investment and economic growth is made available to potential users via the Internet.

- http://www.miti.gov.my (for trade)

- http://www.mida.gov.my (for investment) 

Research and Technologies 

No information is available.

Financing 

Foreign investment in Malaysia is encouraged, particularly in the area of high-end technology; non-labour intensive and non-polluting industry and foreign investment conditions aims have been liberalized to this end. Several fiscal and financial incentives have been announced to facilitate increased foreign investment. Innovative international financial mechanisms are still required and must be open and transparent, particularly with respect to their eligibility criteria. They must be flexible to suit individual country needs, be accessible and participatory. Priority setting must be according to a country's needs and not by the structure of the funding mechanisms.

Cooperation

Malaysia participates actively in a number of regional and international organizations and agreements, such as ASEAN, the East Asia Economic Caucus (aimed at improving trade conditions and arrangements); the South Investment Trade and Technology Data Exchange Centre, the Association of Tin Producing Countries, the International Tin Agreement and the International Tropical Timber Agreement. Malaysia is also active in the Group of 15.

Most progress has been made in liberalizing trade among ASEAN member countries. Two important milestones contributing to this are the Framework Agreement on Enhancing ASEAN Economic Cooperation and the Common Effective Preferential Tariff Scheme (CEPT) for the ASEAN Free Trade Area (AFTA). The AFTA is to be established by the year 2008, with reduced tariffs (zero to five percent) for traded, manufactured and processed agricultural goods among ASEAN countries. The Revised Basic Agreement on the ASEAN Industrial Joint Venture promotes intra-ASEAN investment, through which several projects have been carried out.

Malaysia is party to numerous trade agreements designed to improve bilateral trading and industrial investment. Malaysia also plays an active role in international commodity organizations to promote better and improved trading conditions and prices for commodities, and to oppose the imposition of non-tariff trade barriers on commodities such as tropical vegetable oils and tropical timber.

 

 

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This information was provided by the government of Malaysia to the 5th and 8th Sessions of the United Nations Commission on Sustainable Development. Last Update: February 2000.

For information on regional and international cooperation, click here:
Click here to link to biosafety web sites in Malaysia.
Click here to link to the Biosafety Information Network and Advisory Service (BINAS), a service of the United Nations Industrial Development Organization (UNIDO), which monitors global developments in regulatory issues in biotechnology.
Click here to go to the Web Site of UNEP's International Register on Biosafety.

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CHANGING CONSUMPTION PATTERNS

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

Strategic policy priorities are in place to reduce poverty and expand equitable socio-economic development across the nation, but this must be done in a sustainable manner. This poverty reduction policy is increasing consumption. Rapid economic growth has resulted in increased investment (local and foreign) in the manufacturing sector, low unemployment and one of the highest per capita incomes in the region.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects   

No information is available.

Status   

No information is available.

Challenges  

No information is available.

Capacity-building, Education, Training and Awareness-raising 

Specific long-term campaigns are needed to change consumption patterns but there is little need for financial assistance to promote changes in consumption and production patterns, since most efforts must come through consumer education programmes and campaigns. Public awareness campaigns are carried out by NGOs and government agencies and consumer groups are active partners in controlling consumption. Efforts are under way to integrate consumer education into the formal education system. 

Information   

No information is available.

Research and Technologies   

No information is available.

Financing 

The Government has implemented a number of financial incentives in order to encourage increased savings (e.g., raised income tax relief for insurance contributions). Fiscal incentives and disincentives are required to encourage change in attitudes in both the private sector and the general public.

Malaysia calls for fiscal incentives for the use of clean technology to be complemented with stringent enforcement of environmental laws and regulations. Several fiscal incentives have been announced to facilitate the purchase of new, more efficient and cleaner technology in manufacturing, waste management and air pollution control. These include the granting of pioneer status to certain types of companies and exemption of import duty, sales tax and excise duty from pollution control technology.

Cooperation

Assistance is sought for the development of awareness programmes and to prevent dumping of unsustainable products and production technology and techniques in Malaysia.

 

 

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This information is based on Malaysia's submission to the 5th Session of the United Nations Commission on Sustainable Development, April 1997. Last update: 1 April 1997.

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FINANCING

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

Fiscal and monetary management policies, as well as rules and regulations, are geared towards encouraging the private sector to contribute to the expansion of the economy. A major proportion of government revenue comes from taxes and in particular from the private sector. Public services and utilities are oriented towards recovering most operational costs to ensure implementation of priority programmes.

Decision-Making: Strategies, Policies and Plans  

Various national plans are aimed at promoting economic growth and socio-economic development. Additional resources are being allocated for the Seventh Malaysia Plan to reflect on-going efforts for the efficient management of the public sector. Development expenditures in recent years were mainly allocated for infrastructure, human resources development and poverty eradication. Environmental aspects are incorporated into the programmes of relevant government agencies and reflected in the Federal development allocations.

The Malaysian government has not implemented specific policies in order to make FDI more environmental friendly. However, Malaysia has a general policy pertaining to investment, and the packages offered are as follows:

    1. As a measure to ensure protection of environment, the environment protection equipment is allowed to be written off within a period of 3 years with the initial allowance of 40 percent and an annual allowance of 20%;
    2. Pioneer status tax incentive for 5 years are granted to companies which are directly involved in the setting up of proper facilities for storage, treatment and disposal of toxic and hazardous wastes;
    3. As a further incentive, companies in (ii) above will enjoy import duty and sales tax exemption for machinery, equipment, raw materials and component for the storage, treatment and disposal of toxic and hazardous wastes;
    4. To help conserve the environment, the Government at the initial stage has reduced the excise or import duties on unleaded petrol through the Petroleum Pricing Mechanism for a period of nine (9) months effective from 1 December 1991 after which the Government will take appropriate measures to discourage oil companies from producing and selling leaded petrol;
    5. To provide the infrastructure for the use of a clean source of energy for motor vehicles through the wider use of natural gas, local producers of vehicles will be given tax exemption on equipment for converting such vehicles to use NGV;
    6. Road tax on vehicles which use natural gas (monogas) is reduced by 50% of the prevailing rate while road tax of vehicles which have converted to natural gas (bi-fuel/dual fuel) is reduced by 25% of the prevailing rate; and
    7. Transport companies operating monogas buses are allowed to claim capital allowance within 3 years. The same allowance is also granted for equipment in providing NGV at petrol stations.

Decision-Making: Major Groups Involvement  

Industrialization is aided by liberal economic policies to attract and encourage foreign and local investors. The government maintains a tight monetary stance to reduce pressure on wages and infrastructure. The private sector is being encouraged to complement the government's efforts in human resource and infrastructure development, through staff training, carrying out research with local institutions and establishing training and research centres.

Programmes and Projects 

Several funds have been allocated to eradicating poverty in the following areas:

  1. `Amanah Saham Bumiputera’ Loan Scheme fund for Hardcore Poor (ASB-PPRT) Scheme
  2. The ASB-PPRT scheme was launched in 1992 with an initial allocation of RM500 million to help Bumiputera hardcore poor to purchase ASB shares. The allocation was subsequently increased from RM500 million to RM700 million in September 1993. In 1996, the allocation for the scheme was increased from a revolving RM700 million to RM800 million.

  3. Revolving Fund for Low Cost Housing (TPPKR)

The TPPKR scheme was launched in 1994 with an allocation of RM1 billion. The objectives of the Fund are:

  1. Housing Foundation for the Hard Core Poor (YPUT)

YPUT was established under the Trustees Act (Incorporation) 1952 in August 1994. The total contribution received for the fund amounted to RM800 million. The objective of the fund is to build low cost houses for rental (RM90-RM120 per month) to the hard-core poor (income between RM500-RM750 per month).

Status

Malaysia is experiencing a high rate of economic growth (e.g., 8.3 percent in 1993) and declining domestic inflation and unemployment. Economic diversification is aimed at manufacturing, construction and service industries in order to widen and strengthen the economic base, while reducing reliance on natural resources and agricultural commodities.

Challenges

External financial assistance would be desirable for Malaysia to inter alia:

Capacity-building, Education, Training and Awareness-raising 

See under Decision-Making: Major Groups Involvement.

Information 

Information related to loans by sector are available on http://www.bnm.gov.my.

Research and Technologies 

No information is available.

Financing 

Foreign equity guidelines are being relaxed considerably for the approval of investment projects in manufacturing- and tourism-related sectors, as well as for export promotion. Greater emphasis is needed in the planning and allocation of available finances to remove constraints in providing attractive economic incentives and improving the capacity of existing institutional structures.

Cooperation

Malaysia is a recipient country of ODD. External assistance is provided as capital assistance (loans and grants) and technical assistance (bilateral, multilateral, regional and international). Assistance is directed towards training, feasibility studies, provision of experts, consultants, volunteers and equipment in agriculture, education, environment and industrial sectors. There is a need to enhance government institutional capability through training and technology transfer.

Malaysia extends technical assistance to other developing countries through the Malaysian Technical Cooperation Programme and the South Investment Trade and Technology Data Exchange Centre, focusing on human resource development and technology development respectively.

 

 

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This information was provided by the government of Malaysia to the 5th and 8th Sessions of the United Nations Commission on Sustainable Development. Last Update: February 2000.

For information on participating States in the Global Environment Facility, click here:
For information about issues and projects in Asia and and the Pacific from the World Bank, click here:

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TECHNOLOGY

Transfer of Environmentally Sound Technology

Decision-Making: Coordinating Bodies   

A Cabinet Committee on Science and Technology is chaired by the Prime Minister and includes coverage of scientific research and development. Malaysia has established several national bodies which address policy dimensions relating to technology transfer, capacity-building, communications and information (e.g., the Malaysian Science and Technology Information Centre, the National Advisory Committee on USAID/ ASEAN Environmental Improvement Project, the Institute for Strategic and International Studies, the Malaysian Institute for Marine Affairs and the Malaysian Institute for Economic Research). 

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects   

No information is available.

Status   

No information is available.

Challenges  

No information is available.

Capacity-building, Education, Training and Awareness-raising   

No information is available.

Information   

No information is available.

Research and Technologies 

The Standards and Industrial Research Institute conducts tests on manufacturing methods and technology and awards ISO certificates to manufacturers that comply with international manufacturing and environmental safety standards. Private test centres and laboratories are being established to carry out technology assessments. Several NGOs and government agencies are actively involved in the promotion of clean and efficient technology. A number of research and academic institutions involved in technology assessment and improvement are continuously monitored and upgraded. This includes the Department of Environment.

The private sector is also experiencing a growth of businesses devoted to environmentally sound technology, including marine environmental services and environmental technology for industry. Some larger businesses and corporations are members of the Business Council for Sustainable Development Malaysia.

International partnerships are sought to facilitate access to new and emerging environmentally sound technologies in the areas of climate change, biotechnology, environmental pollution, freshwater resources and the marine environment. It is Malaysia's view that financial flows should not be linked to conditionalities. Assistance is required on concessionary and preferential terms. This may include international mechanisms for purchasing technology at commercial rates and passing it to Malaysia on preferential terms.

The most successful importations of technology have been based on synergy between government and the private sector. Small- and medium-sized industries are unable to purchase or absorb environmentally sound technology due to the shortage of information and assessment capabilities as well as the costs of purchase, installation and maintenance.

Malaysia has achieved mixed success in getting industries to adopt more efficient and cleaner technology. Greater efforts are needed to improve the production patterns of older industries such as textiles, timber and metal plating, as well as for smaller and medium-scale industries. Malaysia will continue to aim at the improvement of technology employed by industry. A notable example has been the combined use of legal and administrative tools to bring pollution caused by rubber and palm effluent under control.

A number of sectoral agencies conduct technology transfer, in particular on information technology and endogenous capacity-building. Within the private sector, technology transfer is under way in the area of forestry, wood processing, marine technology and agriculture. Malaysian authorities give priority to integrated pest management.

Financing 

No information is available.

Cooperation

At the regional level, ASEAN addresses science, technology and environment within its Division of Functional Cooperation and, in particular, holds regular meetings on technology transfer and regional collaboration. The ASEAN Environmental Improvement Project is an example of regional cooperation in technology transfer, initiated by the government and which involves NGOs and industry.

Malaysia also participates actively in the Commonwealth Group on Technology Management, which is a decentralized and cooperative network of technology managers, economists, planners, environmentalists, lawyers, bankers, engineers and senior corporate executives.

Various bilateral programmes have been set up which include technology transfer (e.g., with German technical aid in forestry and veterinary sciences, Canadian aid in geographical information systems and Japanese aid in water resources assessment and air pollution). Most of the transfers of technology are bilateral and the choice of technology has therefore been limited. Also, there is limited capacity to evaluate alternative technology. Financing technology transfer is further constrained by the general lack of preferential and concessionary terms. The inadequate flow of financial resources makes it difficult for the rapidly expanding small- and medium-scale industries to bear the full cost of clean technologies.

 

 

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This information is based on Malaysia's submission to the 5th Session of the United Nations Commission on Sustainable Development, April 1997. Last update: 1 April 1997.

 

Biotechnology

Decision-Making: Coordinating Bodies   

A National Working Group of Biotechnology exists within the Ministry of Science, Technology and the Environment as an advisory body for the management and development of biotechnology and related matters. This working group works with a number of other public institutions such as the University of Malaysia, the Institute of Medical Research and the Malaysia Agricultural Research and Development Institute. 

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

Policies and programmes are focused on the development and use of environmentally sound and sustainable technologies. Research from the public sector is made available to the private sector at no cost and collaboration between the two is encouraged.

Decision-Making: Major Groups Involvement  

Traditional methods and knowledge of indigenous peoples and their communities are especially important in the development and application of biotechnologies in the area of traditional medicine and food.

Programmes and Projects 

A number of projects have been implemented, which include the conversion of agricultural wastes into useful end-products and diagnostic tests for patient care, products and processes. The control mechanisms for the release of genetically modified organisms or any other biotechnology products are not as yet fully enforced.

Status   

No information is available.

Challenges  

No information is available.

Capacity-building, Education, Training and Awareness-raising   

No information is available.

Information   

No information is available.

Research and Technologies   

No information is available.

Financing   

No information is available.

Cooperation

Biotechnology has been accessed through international cooperation, notably in the area of agricultural waste processing (to useful end-products) technology, product development from marine, microbial and plant material and use to combat parasitic diseases. The Japanese International Cooperation Agency and the WHO are two organizations which worked to develop diagnostic tests for patient care and control programmes with the Institute of Medical Research. This project had an external funding component of US$ 2 million. Other partners include New Zealand, Canada, Korea and the United States of America.

 

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This information is based on Malaysia's submission to the 5th Session of the United Nations Commission on Sustainable Development, April 1997. Last update: 1 April 1997.

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INDUSTRY

No information is available.

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TRANSPORT

No information is available.

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SUSTAINABLE TOURISM

No information is available.

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