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MITI REPORT 2014

The Look East Policy (LEP) was an economic policy initiated by Malaysias fourth Prime Minister, Tun Dr. Mahathir Mohamad in 1982, to emulate the success of Japan and Korea in work ethics, morals, practices and policies which had contributed to the countries remarkable development. Research on LEPs significance and success were mixed, but studies have clearly shown that the LEP, announced more than 30 years ago has left an imprint on Malaysia.

LEP has contributed to the socio-economic change and affected the development of Malaysia through the transfer, adoption, transformation and practice of scholastic knowledge, scientific technologies and management skills, especially in training and education and in the fields of science and technology. Official figures have estimated as many as 15,000 Malaysian citizens have benefitted from the policy, and the current Malaysian government has sought to revive and revise the policy now known as Look East Policy 2.0 (LEP 2.0) for the country.

Inspired by the successful implementation and the ample opportunities made available beyond the

first LEP, the second wave of the Look East Policy (LEP 2.0) is designed to be more economic-oriented and in line with Malaysias Economic Transformation Programme (ETP) and to complement Japan and Koreas pursuit of economic transformation. The LEP 2.0 will continue building on the existing human capital development programmes such as youth exchange programmes and scholarship offerings by respective governments.

The year 2014 was a meaningful year for LEP 2.0. The Prime Minister of Malaysia, Dato Sri Mohd Najib Tun Abdul Razak, met with President Park Geun-hye of the Republic of Korea (ROK) and Prime Minister Shinzo Abe of Japan, and both leaders reiterated their firm commitment to support the implementation of LEP 2.0. A concrete foundation for the implementation was laid out with the establishment of the Bilateral Cooperation Committee with Japan and the Economic Cooperation Committee with ROK to support both the commitments. These committees, comprising government officials from the respective governments, will discuss and plan for the successful implementation of LEP 2.0 projects.

driven by a pick-up in Japans manufacturing activities, absorbing Malaysias exports of E&E products, manufactures of metal, chemicals, manufactures of plastics as well as optical and scientific equipment.

Strong exports growth was registered for electronic integrated circuits, television reception apparatus, photosensitive semiconductor devices and aircraft parts as a result of higher Japanese investments in Malaysia. Manufactured exports expanded by 6.2 per cent or RM2.07 billion, with the highest expansion seen in E&E products.

Imports from Japan decreased by 2.9 per cent to RM54.75 billion in 2014. Major imports from Japan were E&E products, machinery, appliances and parts as well as transport equipment, mainly passenger motor vehicles and automotive parts and components.

UNITED STATES OF AMERICA

Building Momentum for Stronger Growth Exports to the US in 2014 recorded a double-digit growth of 11.0 per cent to RM64.41 billion, while imports increased by 3.3 per cent to RM52.33 billion. Total trade amounted to RM116.75 billion; an increase of 7.4 per cent over the past year. The US economy slowly gained momentum in 2014, with a higher purchasing power largely due to low oil prices and improvements in the labour market, which helped push domestic demand for manufactured goods. The stronger US Dollar also made imports more attractive, and this contributed to the acceleration of Malaysias exports to the US.

Malaysias E&E exports to the US surged by 11.2 per cent or RM3.68 billion in 2014. The increase was

LOOK EAST POLICY 2.0 (LEP 2.0)