Institutional Framework

In tandem with the progressive liberalisation of the service sector, the Government has put in place several support organisations to primarily:

  • act as platforms or focal points for all service providers;
  • facilitate the formulation of strategies that will boost our international competitiveness as well as attract inbound investment;
  • monitor milestones in policy implementation which includes benchmarking against international best practices and adopting international standards;
  • be a conduit through which service providers get domestic and international exposure; and
  • coordinate efforts in disseminating information to service providers.

 

Strategic Reform Initiatives (SRI)

On 5 July 2011, the Government announced Six Strategic Reform Initiatives (SRIs) as the second critical component of the Economic Transformation Programme (ETP) executed by the Performance Management Delivery Unit (PEMANDU).

51 policy measures were identified to enable Malaysia to become more competitive and thereby continue to hold international presence.  37 of these were clustered under 6 SRIs.

Each SRI has a lead minister/ministers who are responsible for the successful implementation of the initiative. The 6 SRIs are:

1. Competition, Standards and Liberalisation;

The Minister of International Trade & Industry; The Minister of Science, Technology & Innovation and the Minister of Domestic Trade, Co-operation & Consumerism are responsible for their respective area.

2. Public Finance;

The Second Finance Minister leads this SRI.

3. Public Service Delivery;

The Chief Secretary to the Government is responsible for this SRI.

4. Government's Role in Business;

This is led by the Prime Minister.

5. Human Capital Development; and

The Minister of Human Resources leads this.

6. Narrowing Disparities.

The Minister in the Prime Minister's Department, Economic Planning Unit leads this SRI.

Of these, the Competition, Standards and Liberalisation (CSL) SRI has a direct effect on the outlook of the services sector. This SRI seeks to improve Malaysia's competitiveness through:

  • the newly enacted Competition Act 2010;
  • the liberalisation of the service sector; and
  • increased standards and quality for Malaysian goods and services.

The first round of liberalisation was in 2009 covering 8  sectors (27 sub sectors) with no equity condition imposed, followed by the second round of liberalisation, in 2011, of 7 broad services sectors with 100 per cent foreign equity participation to be allowed in phases throughout 2012. This autonomous liberalisation effort goes beyond any of Malaysia's existing trade in services commitments.

These 7 service sectors ( which incorporate 17 +1 services sub-sectors) identified for liberalisation are:

  • Telecommunications;                               
  • Healthcare;
  • Professional services;
  • Environmental services;
  • Distributive Trade services;
  • Education services; and
  • Courier services.

Government support and facilitation in the services sector is a collaborative effort among various Ministries/agencies/organisations. The main three who have been entrusted with this task are:

  • The Malaysia Services Development Council (MSDC);
  • The National Professional Services Export Council (NAPSEC ); and
  • The Malaysia Service Providers Confederation (MSPC).

Malaysia Services Development Council (MSDC)

MSDC has, since its formation in 2007, evolved and in the process gained greater focus in its primary role as the platform to monitor, review, discuss and resolve issues that involve the development of the services industry, with the involvement of the relevant Ministries/Agencies.

MSDC monitors and coordinates the work of Ministries implementing the liberalisation programmes where Ministries will submit their strategic plans for the development of the services sub sectors under their purview and give updates of such measures.

With the second round of autonomous liberalisation in 2011, MSDC's role included reviewing rules and regulations that impede the growth of the industry and assisting SMEs to develop and export their service.

MSDC  has specific Working Groups (WG) that reflect the stakeholders in the services sector. At present, it is guided by the Services Sector Blueprint which was launched in March 2015 during the inaugural meeting of the Special Committee on Services chaired by the Prime Minister.

The WGs within MSDC are responsible for monitoring the implementation of the 4 Policy Levers in the Services Sector Blueprint. They are:

  1. Internationalisation Strategy
  2. Investment Incentives
  3. Human Capital Development
  4. Sectoral Governance Reform

For MSDC's Terms of Reference, please click here.

For MSDC's Membership, please click here.

National Professional Service Export Council (NAPSEC)

Set up in 2001, NAPSEC is an advisory council to MATRADE on matters relating to the export of professional services. It comprises representatives from professional bodies including architects, constructors, engineers, accountants and lawyers and obtains input from these bodies in the formulation of strategies and programmes for the export of professional services.

Some of the members of NAPSEC include:

Professional Bodies

  • Malaysia Institute of Architects
  • Board of Architects
  • Institution of Surveyors Malaysia
  • Malaysian Institute of Accountants
  • Bar Council
  • Institution of Engineers Malaysia
  • Board of Engineers
  • Board of Town Planners
  • Malaysian Professional Centre
  • Pharmacy Board Malaysia
  • Association of Service Providers
  • Association of Consulting Engineers Malaysia (ACEM)
  • Association of the Computer and Multimedia Industry (PIKOM)
  • Malaysia Medical Association (MMA)
  • Association of Private Hospitals of Malaysia (APHM)

Government Ministries/Agencies

  • Ministry of International Trade and Industry
  • Ministry of Works
  • Ministry of Foreign Affairs
  • Treasury, Ministry of Finance
  • Economic Planning Unit (EPU), Prime Minister's Department
  • Central Bank of Malaysia
  • Malaysia Industrial Development Authority (MIDA)
  • Construction Industry Development Board (CIDB)
  • Export-Import Bank of Malaysia Berhad (EXIM Bank)

NAPSEC's main roles are:

  • to formulate and review national strategies and promotion programmes relating to the export of professional services, including construction services;
  • to recommend and facilitate funding for the export of professional services;
  • to formulate strategies to increase participation by Malaysian professionals or companies in overseas projects funded by international lending agencies;
  • to gather and disseminate information related to market opportunities;
  • to review and recommend incentives for the export of professional services;
  • to compile databases or directories on export-ready professional service providers with support and feedback from the industry;
  • to develop databases on market access issues and regulations affecting export of professional services, including facilitating mutual recognition agreements;
  • to identify approaches to publicize the skills and capabilities of the professional services, including construction services, in international markets;
  • to monitor global developments and their implications for Malaysian professional services exports; and
  • to monitor developments and provide inputs towards the formulation of Malaysia's position and commitment in WTO negotiations in the professional services.

Malaysian Service Providers Confederation (MSPC)

MSPC, launched in 2009,  was  established to represent the Private Sector Service Providers in discussions and negotiations involving the liberalisation of trade in services.

MSPC, in this capacity, liaises with the government agencies/Ministries in formulating strategies that would promote the services industry.

They organise programmes that help their members understand the implications of the various trade in services agreements (FTAs, AFAS, GATS) as well as the autonomous liberalisation of services initiatives.Together with the Ministry of International Trade and Industry (MITI), MSPC undertakes export promotional activities for Malaysian service providers.

Details of these promotional activities can be accessed at www.mspc.my

MSPC is open to all institutions / organisations representing professionals/practitioners and/or individual service provider companies registered in Malaysia and involved in:

  • Business & Professional Services;
  • ICT Services;
  • Construction Services;
  • Environmental Services;
  • Advertising Services;
  • Oil & Gas;
  • Logistics Services;
  • Distribution Services;
  • Education Services;
  • Healthcare Services;
  • Tourism and Travel related Services; and
  • Any other services (as defined by the General Agreement on Trade in Services (GATS) excluding Telecommunication, Financial and Aviation Services.