I would also like to thank the various organisations whose support has made this seminar a success, namely:

The presence of more than 600 participants in this seminar is an affirmation of the continuing strong interest of the business community in Thailand on the prospects of doing business with Malaysia .

The Malaysian delegation , comprising Members of Parliament , business leaders and government officials are here to meet their Thai counterparts to explore and discuss these prospects.

The objectives of today's seminar are to:

BILATERAL TRADE

The strengthening of economic linkages between Malaysia and Thailand is evident by the continuous expansion of bilateral trade between the two countries.

Total trade between Malaysia and Thailand over the last decade had increased by more than three folds , reflecting the growing business linkages of the two economies. In 1996, the value of two-way trade was US$3.8 billion and, in 2005, the value had increased to US$13.6 billion .

Thailand 's share of Malaysia 's total global trade had increased from 3.7 per cent in 1996 to 5.3 per cent in 2005. In 2005, Thailand was Malaysia 's fifth largest trading partner, up from seventh in 1996.

For the first seven months of 2006, the total trade between Malaysia and Thailand has continued to expand , amounting to US$7.8 billion .

In 2005, the value of Malaysia 's exports was US$7.6 billion , whilst imports from Thailand totalled US$6 billion .

Malaysia 's major exports to Thailand in 2005 were:

Major imports from Thailand were:

Investments

Thailand continues to be an attractive investment destination for Malaysian companies. Malaysian companies in Thailand have invested a total of US$ 446.4 million since 2000. These investments are mainly in the sectors of:

In 2005, Malaysia was ranked as Thailand 's second largest investor among the ASEAN countries. For the period January to June 2006, nine projects with Malaysian investments have already been approved by the Thai Board of Investment (BOI). These investments valued at US$ 53 million are in:

Malaysia is also the recipient of the growing investments from Thailand . For the period 2001 to July 2006 , total investments from Thailand in Malaysia amounted to US$137.3 million . The investments were mainly in:

In the recent 2007 Budget announced on 1 September 2006 , the Malaysian Government has proposed to establish an overseas investment fund with an allocation of RM100 million (US$26 million) to provide soft loans to domestic companies to finance start-up costs of doing business overseas . Other facilities provided to promote reverse investmen t:

Malaysian Industrial Development Finance Berhad has also established Fund for Cross Border Investment ( FCBI ) to assist Malaysian companies in the manufacturing sector to undertake new investments within the ASEAN region. Financing is available up to 5 years under this scheme for purchase of machinery and equipment .

These initiatives are being taken by the Government to assist Malaysian businesses to explore investment opportunities abroad.

THE MALAYSIAN ECONOMY

The Malaysian economy has succeeded in meeting the challenge of sustaining positive growth in an environment of rising global oil prices . The economy expanded by 5.3 per cent in 2005, with the manufacturing sector, growing at 4.9 per cent , and accounting for 31.4 per cent of GDP.

The services sector, which is a fast growing sector, grew at the rate of 6.5 per cent. This sector contributed 50.5 per cent to the GDP in 2005.

To enhance the business environment , the Government had in the recent 2007 Budget announced s that the corporate tax will be reduced by two percentage points in two stages . For year of assessment 2007 , corporate tax is reduced to 27 per cent and 26 per cent for the year of assessment 2008 .

The outlook for the Malaysian economy is favourable . For the first half of 2006, the GDP growth registered was 5.6 per cent. The GDP for this year is expected to grow by 5.8 per cent .

The Malaysian government recently launched two major strategic economic plans , The Ninth Malaysia Plan (2006-2010) and the Third Industrial Master Plan (IMP3) (2006-2020).

The Ninth Malaysia Plan is a medium-term economic and development plan for the country that provides a broad economic direction towards achieving Malaysia 's long-term sustainable growth .

The Ninth Plan focuses on:

The Plan has five major thrusts which forms key building blocks :

The Third Industrial Master Plan ( IMP3 ) launched on 18 August 2006 outlines the development strategies for the three pillars of the economy , namely manufacturing , services and agricultural sectors . The three sectors are envisaged to be developed into globally competitive sectors incorporating all the characteristic and requisite features of efficiency, productivity and competitiveness .

In the manufacturing sector , the Government will hasten the transformation of the electrical and electronics industry into high technology and higher value-added industries and also promote the development of other major industries such as petrochemical , maritime , aerospace , heavy machinery and defence industries .

In the services sector , the Government will further promote the tourism industry , and transform the country into a regional centre of excellence for education and health tourism . In addition, we have been increasingly tapping the potential of Islamic banking and finance to turn Malaysia into an international centre for Islamic banking .

Efforts to develop new services industries such as aviation maintenance, repair and overhaul (MRO), shared services and outsourcing (SSO) , transport and logistics , and business and professional services will also be stepped up.

COOPERATION WITHIN ASEAN

Thailand and Malaysia have benefited from the ASEAN Economic Integration Programme. The increasing economic integration among the ASEAN countries will help to further enhance business opportunities for the business communities of both countries.

Thailand is Malaysia 's second largest trading partner within ASEAN accounting for 21 per cent of Malaysia 's trade with ASEAN countries in 2005.

The ASEAN Economic Ministers at their recent meeting in Kuala Lumpur held on 22-23 August 2006 agreed to recommend to the ASEAN Leaders to advance the timeline to realise the ASEAN Economic Community to 2015 .

In the area of goods, ASEAN-6 have offered 98.5 per cent of their products for tariff concession under the CEPT Scheme , of which 99.8 per cent are at tariff rates between 0-5 percent . With this, the ASEAN-6 ha s fully implemented their tariff liberalisation commitment under the Scheme .

CLMV countries have offered 90.9 per cent of their products under the CEPT Scheme, of which 76.8 per cent are at duties between 0-5 per cent .

Beginning January 2007, ASEAN 6 will also eliminate duties on 80 per cent of the products with the rest to be eliminated in 2010.

A comprehensive work programme with clear timeline is being developed to eliminate non-tariff measures .

Priority is now given to services liberalisation within ASEAN. A Protocol to Implement the Fifth Package of Commitments is expected to be ready for signing by the 12th ASEAN Summit in December 2006 . In this context, member countries are expected to make offers in at least 70 sectors and sub-sectors , which have been identified covering healthcare, ICT, tourism, construction, education and professional services.

ASEAN has agreed to map-out a comprehensive services liberalisation plan from 2007-2015 .

ASEAN is also currently discussing on the establishment of Mutual Recognition Arrangements ( MRAs ) for the services sector. Negotiations are on-going on the MRAs for land surveying , architecture , medical practitioners and accountancy services . This will further facilitate the trade in services within the region.

At this AEM Meeting in Kuala Lumpur , Malaysia has agreed to take the lead in preparing brochures on the ASEAN Investment Area to promote ASEAN as a single investment destination.

ASEAN is also widening linkages through FTAs with ASEAN's dialogue partners . The FTA in goods with China has been implemented and the FTA with Korea will be operational by January 2007. Negotiations are on-going with India , Japan , Australia and New Zealand .

PROMOTING COLLABORATION

Malaysian and Thai businesses would be in a better position to capitalise on the opportunities in regional and global markets through enhancing collaboration and forming strategic partnerships. Among the sectors where Malaysian and Thai companies have developed considerable expertise to form synergistic partnerships are in construction, ICT and tourism.

INFORMATION AND COMMUNICATION TECHNOLOGY

The Multimedia Super Corridor or MSC Malaysia, established in 1996 has matured into a thriving global ICT hub. The MSC is host to more than 900 multinationals, foreign-owned and home-grown Malaysian companies, focused on multimedia and communications products, solutions, services and research and development.

Some of the possible areas of collaboration in ICT between Malaysian and Thai business communities are:

EDUCATION

Malaysia has invested heavily in the education sector . The 9 th Malaysia Plan which was tabled recently has included human capital development as one of its key strategies.

In 2005, there are 55,000 international students studying in Malaysia , of which 1,050 are from Thailand .

International students have chosen Malaysia as a preferred place to study because of the quality of education and comparatively lower fees compared with universities in developed countries.

More exchanges of students between the two countries should be encouraged. Apart from the academic benefits, the exposure gained by the students will strengthen the foundation for stronger cooperation between Malaysia and Thailand . This interaction could also lead to strengthening linkages among young entrepreneurs from both countries.

TOURISM

Both Thailand and Malaysia have a wide variety of tourist attractions , some of them unique to the respective locations.

Hoteliers and travel operators in both countries are encouraged to cooperate and design innovative tour packages that can increase the flow of tourists to both countries. In 2005, there were 1.9 million Thai tourist arrivals into Malaysia while a total of 1.4 million Malaysians arrivals were recorded in Thailand for the same year.

Currently, the cooperation between Malaysian aviation companies such as Malaysia Airlines and Air Asia and their Thai counterparts have been encouraging. This has contributed to the good flight connections between both countries, which help facilitate development of tour packages.

These tour packages should aim at encouraging tourists from t hird countries to visit Malaysia and Thailand .

2007 has been declared Visit Malaysia year . This is in celebration of Malaysia 's 50 th year of nationhood . A wide range of multicultural, musical, sports events and exhibitions have been lined up for the enjoyment of visitors.

The people of Thailand are invited to join in the celebration.

CONSTRUCTION

There are many Malaysian companies which have successfully proven their capacity to undertake major overseas projects in sectors such as highways, ports, airports, telecommunication and power generations, oil and gas, building constructions, resorts and hotels.

They have proven track records in countries like Bosnia , India , China , Indonesia , Myanmar , Philippines , Singapore , South Africa , Sudan , Taiwan and also the Gulf region.

Collaboration and partnerships among companies from the two countries can enhance the chances of securing projects not only within the region but also in other markets such as the Middle East, South Asia, Europe and America .

LABUAN INTERNATIONAL OFFSHORE FINANCIAL CENTRE (IOFC )

In the financial services sector, the Labuan International Offshore Financial Centre ( IOFC ) offers a wide range of offshore financial services and products to global customers. Managed by the Labuan Offshore Financial Services Authority, Malaysia (LOFSA), the IOFC offers many advantages to ASEAN companies.

Since 1990, LOFSA has registered 5,000 offshore companies from over 80 countries. This included 1,684 from ASEAN, out of which 22 companies are from Thailand .

More Thai companies are invited to use Labuan IOFC for their international ventures namely international banking , investment holding companies , reinsurance and captive insurance and leasing .

In conclusion, I am hopeful that through frequent business interactions and greater awareness of business opportunities in both countries, the bilateral trade and investment collaborations can be further enhanced.