Minister of Tourism, Malaysia



Institute of Director, London, United Kingdom – 9.30 AM- 5 August 2008



*(Salutations: Check VIPs present)




Lord Mayor, Lucum Tenens



Chief Operating Officer

Asian Strategy & Leadership Institute (ASLI), Kuala Lumpur


Your Excellencies,

Distinguished Speakers,

Conference Delegates,

Members of the Media,


Ladies and Gentlemen,


A Very Good Moring to All



On behalf of the Government and the People of Malaysia, it gives me great pleasure to greet everyone here with the message of Peace, Solidarity and Warm Greetings.


This occasion is memorable to me, in particular, for it marks my first official visit to the United Kingdom since being appointed as Minister of Tourism, this year.


On that note, I am honoured and delighted to be speaking to such a distinguished audience and I am also pleased to note that this Summit provides me with an excellent opportunity to network, get acquainted, make new friends, exchange ideas and learn a thing or two from the distinguished Speakers and  experts.


I have been told that the theme `Emerging MarketsA Promising Future a Managed Risk` and this is utterly timely in view of the increasing focus on the global economic situation today.





Looking at the program, I am very confident that the next couple of days will be stimulating and a productive one, especially with the intellectual discourse from the economists and experts from around the world.


However, I am not an economist and as such, will not delve too much into that territory. Nonetheless, as the Minister of Tourism, Malaysia, I will share with you on Malaysia’s experience and success stories and on how tourism, (which was once a bridesmaid, but never the bride) has today become one of the economic drivers to Malaysia’s development. Malaysia‘s strong economic fundamentals, continue to provide opportunities for investments in the key sectors of the economy


Ladies and Gentlemen,


Tourism and economics cannot be separated.  Governments in many countries have realised this and today are aware of this significant phenomena and the role tourism plays as a catalyst for economic growth. This industry not only opens up new job opportunities, but can also enables a country  to diversify  its economies to not only serve the tourists per say, but also to enrich the livelihood of the residents and the communities within the country.

For that matter, governments from most countries, whether emerging or emerged countries regard tourism as the fastest growing economic sector and the number one industry that brings in foreign exchange earnings and job creation.  It provides the basis upon which communities can renew their pride in heritage and upgrade their quality of life.


Ladies and Gentlemen,

To really appreciate Malaysia, you must visit the country. Besides being a cost-competitive location for business and investment, Malaysia is also a very affordable destination for tourists.

The World Tourism Organization has listed Malaysia as one of 30 emerging world destinations. For those keen on eco-tourism, the tropical rainforests, seas and freshwater ecosystems of Malaysia support a rich and diverse range of both flora and fauna species.




Malaysia is also one of the few non-western countries that has successfully brought socio-economic development within just two decades of its independence and is perhaps the best example of a country in which the economic roles and interests of various racial groups have been pragmatically managed in the long-term without significant loss of growth momentum. For the period 1998-2007, the economy registered an average annual Total Factor Productivity (TFP) growth of 1.6%, contributing 32.0% to GDP growth of 5.1%.


As a matter of fact, the role of tourism in the Malaysian economy dates back as early as in 1959 when the first Tourism Department was initially setup.  Back then, agriculture, forestry and fishing accounted 40 per cent of the Gross Domestic Product (GDP) of the country. While still in its `infancy` stage, tourism hardly made any profound impact on the national economy.




The first couple of decades after the independence in 1957 saw the Malaysian economy making a slight twist away from the agriculture and fishing sectors and venturing into export-oriented light manufacturing and industries such as, electronics, textiles, rubber products etc… However, it was not until the early 70s that really spelled the beginning of a `new era` for Malaysia.


The early 70s saw the formation of Malaysia Airlines (October 1972) and Tourism Development Corporation (TDC –Oct 1972)). Both were tasked to put Malaysia on the world tourist map. Since then the economy remains relatively robust with the manufacturing and tourism taking the lead.


Today, the tourism industry has experienced a rapid growth and gained an importance in the Malaysian economy. The tourism industry has performed extremely well and has generated substantive foreign exchange for the past few years. It is currently the second largest foreign exchange earner to the national economy and employs a significant segment of the country’s total work force. 

Last year, tourist arrivals to Malaysia surpassed the target by registering a record high of 20.97 million visitors against RM46.1 billion (USD 14 billion) in receipts. 


Ladies and Gentlemen,


Tourism’s contribution to the economy is very much diverse and it can be summoned up in the following categories.


a) Receipts

Tourism receipts for the past decade have been encouraging. For instance the tourism sector helped the Malaysian economy to bounce back with vigour and by contributing RM17.4 billion or US $ 4.6 billion (former exchange rate of 1 US pegged at RM 3.80) to 2000 Malaysian economy  just after the 1998/99 Asian Financial Crisis. Since then, tourism has been the second most significant economic contributor to the economy.





b) Gross Domestic Product (GDP)

Malaysia’s services sector is the key to the GDP growth of the country. Currently it is the largest sector in the economy, contributing more than 50 % to the national GDP. The government views this sector as a catalyst for growth. Last year, the national GDP was at RM 269,276 with a growth of 9.7 % of which RM44.5 billion (US$ 14 billion) came from the tourism sector.


The Malaysian economy is expected to expand faster in 2008, with real gross domestic product (GDP) growth projected at between 5% and 6% with inflation keeping a projected low at 3.5% as output growth is below potential level.


Considering the global scenario and market forces, hence the service sector is projected to grow at 8.6%.  This will be inspired by growth through strong domestic consumption spending, higher tourist arrivals and stronger wholesale and retail trade in addition to the momentum induced from the real estate, business services and finance as well as insurance sub-sectors.


Compared to other developed countries or emerged markets, Malaysia’s services sector has the potential to grow further, especially in the field of tourism, education, health, finance and telecommunication among others.


c) Jobs / Employment

Out of the total national workforce, almost 50% of the national workforce being either directly or indirectly employed in the tourism sector or sub sectors such as hotels, restaurants, travel agencies, airlines, transportation etc…

In doing so, tourism has created job opportunities and has played a role in keeping unemployment down.  


d) Transportation

Another significant impact on the economy brought about by the tourism industry in the transportation sector. As tourism expands so does the number of vehicles on tolled highways and byways.

Tourism also stimulated growth in expansion of the national carrier Malaysia Airlines and the debut of AIRASIA (1995) and Star Cruises (1990). 

As for the aviation industry, the robust growth in tourism sector has attributed to a certain extent to the expansion of the national carrier and other carriers in the country. Since its inception in 1972, Malaysia Airlines only had a fraction of the fleet as it has today. Similarly, AirAsia has taken the advantage of the robust economy to launch the nation’s first low carrier providing low fares to both domestic and international travellers. The same scenario also applies to the cruise industry. Star Cruises made its debut in early 1990s as the nation’s sole cruise operator just when tourism was making an aggressive mark to the national economy.


e) The Retail Sector

With the introduction of the Mega Sale Carnivals in 1999, the Malaysian economy received a boost in the retail sector. Such efforts were to position Malaysia as one of the leading shopping destinations in the region.

Each Mega Sale carnival attracts not less than half a million foreign visitors and day trippers to the country; this is in addition to the normal tourist arrivals. The effort facilitated the growth in tourism expenditure and consumer demand which enhanced the growth of retail trade.


Shopping alone constituted 25.7 % of the overall tourism earnings while the retail sector constitutes 13 % of the country’s GDP with 7 -10 % of the total national workforce.


Its relation to the other sectors of the economy, such as wholesaling, advertisements and promotions, info technology and logistics ensure that it has a pivotal role to play.


f) Real Estate

The launching of economic corridors in specific location s around the country has an influence to a certain extent.

With turning Malaysia into a developed country in mind, our Government has recently announced three special economic development regions in peninsula Malaysia; these are the Iskandar Development Region (IDR) in southern part of Peninsula Malaysia, Northern Corridor Economic Region (NCER) and East Coast Economic Region (ECER), plus the Sabah Development Corridor (SDC) and Sarawak Corridor of Renewable Energy (SCORE) to enhance the economic growth of these areas and the nation as a whole. 

Another area of focus is the information communications technology industry (ICT). The Multimedia Super Corridor Malaysia or MSC Malaysia facilitates the expansion of the ICT sector. The necessary infrastructure and policies have been put in place to enhance Malaysia’s competitiveness in this sector.


The Malaysia My Second Home program has managed to attract 11,435 foreigners since it was introduced in 1996 to date.


Last year alone there were 1,503 people registered under the programme, which has various flexible conditions, and was introduced to enable foreigners with a high income to stay in the country for at least five years or for a longer period of time.


g) Education

The increase in the numbers of learning institutions of higher learning and twinning programmes with foreign universities such as Nottingham University, Monash University and Curtin University provided the foundation of growth in Education Tourism.  Currently there are 65,000 foreign students studying in Malaysia. The additional spending spin-offs generated by parents visiting their children in Malaysia all adds to the economy.


Student tourism has become popular as reflected by demands for tours to visit schools to enable students from other countries to gain knowledge of the school education system as well as experience the Malaysian school atmosphere, which is unique with the social interaction of the various ethnic groups besides contributing to the national economy.


h) Accommodation

 Owing to the supply and demand, the number of hotels and hotel rooms has increased over the decade. Such growth has a considerable impact on the accommodation sector in the national economy.


i)    Medical and Health Sector

Since its introduction in 1999, the medical and health tourism has contributed handsomely to the national economy. To date, feedback received from 29 private hospitals, Malaysia has registered more than 341,288 foreign patients against RM253.84 million (USD 80.32 million) in receipts.


There are several services that can be highlighted and promoted as a niche market for the country is the Wellness Program.

The Women and Men Wellness program is one program that is very lucrative considering the good foreign exchange and the varied range of services available.

In addition, Malaysia has over 200 international standard hospitals and clinics to choose from. Malaysia’s abundance with state-of-the-art medical facilities plus competitive medical fees are some of the vital factors that make it a popular destination among health tourists.


Ladies and Gentlemen,


The tourism industry’s contribution to the national economy is not without any challenges and uncertainties. Distorted perception, Lack of Synergy Support, Low Awareness, Global Issues (Bird Flu, SARS, Fuel Price Hike etc…) , Acts of Terrorism, Adverse Travel Advisories are some if the issues that can affect the  tactical planning that goes into building confidence in the economy.


Nonetheless, the Malaysian economy is expected to expand faster this year with real gross domestic product (GDP) growth projected at between 5% and 6%. Inflation is projected to remain low, as output growth is below potential level.


 As a matter of fact, the services sector continues to be the main catalyst to the growth, followed by the manufacturing sector. The services sector is expected to expand at an average of 7.5 per cent per annum for the next 15 years. The contribution of the sector to GDP is expected to increase to almost 60 per cent by 2020.

 Ladies and Gentlemen,

Malaysia‘s economic network within ASEAN and East Asia, makes it good base for international companies, to extend their reach in Asia, by setting up services-based operations, which include regional entities, such as Overseas Head Quarters ( OHQs ), International Procurement Centres, ( IPCs ), and Regional Distribution Centres ( RDCs) in Malaysia.

To date there are 141 Operational Head Quarters, 197 International Procurement Centres and 17 Regional Distribution Centres in Malaysia.

Ladies and Gentlemen,

The nation’s main success can be attributed to the stable political climate, the foresight in planning and the implementation of the NEP. Malaysia has not only registered rapid development, but is also seen as a model worthy of emulation by other developing or other emerging markets. Being the catalyst for growth, the tourism industry has opened up new avenues and provided many with a hope, career and a future.


With those words, I would like to thank the organiser for the initiative in hosting this Summit. My sincere thanks also to all Speakers and delegates, I hope you have a productive Summit and that you take a break during this Summer Holidays and come and visit Malaysia soon.


Thank you



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