www.malaysia-chronicle.com - Many things have been said about making Kuala Lumpur a world class city. From the ETP to Kuala Lumpur’s Structure Plan, a lot has been said about the psychical aspect of Kuala Lumpur and making it a leading Metropolis.
The questions remain, “What will make people come to Kuala Lumpur, What will make it stand out internationally and What can take Kuala Lumpur beyond the competitive cities in the region ie Singapore, Jakarta and Bangkok?” (source)
The man credited with coining the phrase “soft power” is Joseph Nye who is hailed as one of the most influential scholars on American Foreign Policy. According to Steve Bloomfield of The Monocle, Soft Power strategy was conceived only 21 years ago and already most nations want a “soft power” strategy – a way of winning the world over.
Soft Power can come in many shapes. Tun Dr Mahathir Mohamad’s era saw the Twin Towers being the soft sell of Kuala Lumpur, with the Twin Towers being an icon recognised the world over. Fast forward 14 years, I sense a struggle to ascertain the competitive advantage of Kuala Lumpur or even Malaysia. I take this opportunity to crystallise four soft power tools for Kuala Lumpur that can truly take it into the next decade and beyond.
Islamic banking and financing
Islamic banking and finance is a huge sector the global economic markets. It is part of the global finance market and has grown over the years with presence in many countries. PWC has mentioned that The Malaysian Islamic financial sector is seen as one of the most progressive and attractive in the world given the numerous incentives planned and further liberation in the coming years. PWC also mentioned the following statistics about Malaysia:
* Islamic banking assets: RM113.5 billion (US$30.9 billion).
* Takaful assets: RM6.2 billion (US$1.7 billion).
* Largest Islamic private debt securities (IPDS) market: 45.5 per cent (RM125 billion or US$34 billion) of domestic corporate bonds.
* Active Islamic money market channelling about RM30 billion - RM40 billion monthly.
* Critical mass of diversified players ¬— Islamic banks, investment banks, takaful companies, development financial institutions, savings institution, fund management companies, stock brokers and unit trusts.
Together with a wide range of tax exemptions across the Islamic finance spectrum, Kuala Lumpur can truly attract various financial institutions and financial service providers to set up larger corporate presence in Kuala Lumpur instead of just representative offices.
An example is what Singapore has done for the Private Banking institutions. Kuala Lumpur can certainly attract bigger and more of the Islamic Financial Institutions and service providers. This will be Kuala Lumpurs great soft sell in the financial sector. Singapore and Jakarta are also aggressively seeking these markets but we have competitive advantage in terms of market leadership and skill set
Palm Oil/Oil Palm-Related Industries
The Palm Oil industry forms the economic backbone of Malaysia. Malaysia’s palm oil industry is the fourth largest contributor to the national economy and currently accounts for RM53 billion in GNI. The industry spans the value chain from upstream plantations to downstream processing.
Palm oil is the second largest export revenue earner with a total combined value of RM83.4 billion or 12.0 per cent to total exports. Malaysia is also the second largest producer of palm oil, employing more than half a million people. About 60 per cent of palm oil exports from Malaysia are shipped to China, the European Union, Pakistan, United States and India. They are mostly made into cooking oil, margarine, specialty fats and oleo chemicals.
Kuala Lumpur can take advantage of this huge market. From Operational Headquarters of refineries and biodiesel companies, to fertilizers and logistics service providers right down to research and development of the whole industry, the magnitude and multiplier effect is huge.
The competitive advantage is the fact that supply base is already in Malaysia and Kuala Lumpur can act as the global central nerve for this huge industry. This coupled with our ports that allow accessibility to North Asia (Kuantan, Lahad Datu) can really make Kuala Lumpur an attractive proposition.
Wikipedia mentioned that Southeast Asian countries’ rapid production growth of palm oil and palm kernel ol in the 1980s spurred the oleo chemical industry in Malaysia, Indonesia, and Thailand. Many oleo chemical plants were built. In addition to servicing traditional markets, Malaysia must put more effort into producing biodiesel. Major regional and global companies are building mills and refineries around the region and Malaysia must be part of this growth.
With this rapid growth and the introduction of Biofuel into Diesel by 2014, it is another market to tap and promote to make Kuala Lumpur truly the Palm Oil Centre of the World.
Oil & Gas
The Petronas Twin Towers is already an iconic pull and KLCC has in fact proved that if we use Oil and Gas as a soft asset, we can attract Oil & Gas MNC providers to relocate their business to Kuala Lumpur. Kuala Lumpur already is hosts to various O&G companies and we need to make this O&G Companies to use Kuala Lumpur as a hub for oilfield services and not just to do Malaysian business alone.
Other than Petronas’s gas find in East Malaysia, Vietnam and Cambodia have also found various O&G reserves in recent years and we can market Kuala Lumpur as a spring board to these countries to provide oilfield services and other related products such as O&G fabrication businesses, oil storage and trading and even petrochemical marketing and manufacturing.
This is probably the easiest marketing tool for Kuala Lumpur and with Talent Corp providing easy access to immigration approvals; this is going to be big for Malaysia.
A subset to this is of course alternative energy. Solar and Hydro still offer tremendous opportunities in Malaysia and Kuala Lumpur can be the centre for alternative energy. All the local big power producers (independent or otherwise) already have their offices in Kuala Lumpur and if we promote alternative energy as a business opportunity to be worked on in Malaysia, we will be able to attract world players to hub in Kuala Lumpur. This would cover the service providers, engineering and construction support and of course transmission services. In fact Malaysia is one of the largest producers of silica for Solar Panels
For all the above – Executive Education Centres
This is one of the most attractive propositions for any Modern City, which is to have Executive Education Centres within the city. Today, there is immense pressure on individuals to keep their knowledge and skills up-to-date and this has resulted in a trend of continuous education, where people continue to learn and grow to adapt and evolve in order to meet the ever-changing demands of their chosen industry.
Executive Education Centres can meet all these needs and to continue the education process for business executives from all over the world so that they may continue to progress in their chosen career. It also aims to help entrepreneurs convert their ideas into viable business plans.
The executive mode of education allows executives, both from and outside Kuala Lumpur to obtain qualifications without giving up their positions and interrupting their career.
Kuala Lumpur must have centres of excellences in the city itself offering short and medium term courses for executives and senior management in the various sectors above. Can one imagine the Harvard Centre of Islamic Finance in Kuala Lumpur City Or even UPM School of Palm and BioFuel in the city? These executive education Centres can offer two-week courses and even medium term MBA’s on the above and we will attract the best brains and talent into Kuala Lumpur.
Let us not forget that Kuala Lumpur is unique for its multi culture, multi cuisine and varied history. It is also stands out for its advance infrastructure and world class real estate (present and planned). Kuala Lumpur is linked with Islamic Financing. Kuala Lumpur is linked with Palm Oil. Kuala Lumpur is already known worldwide for its Tertiary Education. Then we have iconic figures such as Tan Sri Dr Zeti Akhtar Aziz, Tan Sri Tony Fernandes, Bernard Chandran, Datuk Michelle Yeoh, Lat and even Lillian Too.
I think these are the key soft sell strategy we must promote to the rest of the world. We have the goods, let us create a channel for these goods to be spoken off, to get traction and then offer a system for the talent and corporations to come to Kuala Lumpur to truly make it a destination city in the coming years. Let it not just be a preferred city just because of its physical traits but its cultural, liveability and economic traits
- Previn Singhe is the CEO of Zerin Properties.
Source : http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=31799:competitive-advantage-of-kl-are-we-optimising-our-soft-assets?&Itemid=3 - April 12, 2012
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