How private and SME businesses can thrive under the Malaysia MADANI roadmap

1. In 22 September 2023, Prime Minister Datuk Seri Anwar Ibrahim made his debut address at the United Nations General Assembly (UNGA) in New York and took Malaysia Madani to the world stage. The Prime Minister’s speech on the country’s roadmap under the Malaysia Madani framework was well received and helped raise the country’s profile on the international stage.

2. According to the Chief Economists Outlook, 60% of economists expect the global economy to weaken in the coming year. The Madani Economy Framework is timely in providing a roadmap to boost Malaysia’s economy amid slowing global momentum and continuing economic uncertainty. The launch of the New Industrial Master Plan (NIMP) 2030, which serves as a roadmap for the country's economic development over the next ten years, and the National Energy Transition Roadmap, which aims to accelerate the country’s green and sustainable growth agenda, if well implemented, will drive domestic growth and spur the growth of small and medium-sized enterprises (SMEs).

3. The NIMP 2030 is instrumental in supporting the Madani Economy framework. It emphasises the role of SMEs as key contributors to economic growth, targeting to double SME exports to 25% in seven years. SMEs make up roughly 97% of the Malaysian economy, accounting for 48% of employment and contributing 38% of total Gross Domestic Product (GDP). The Government recognises that support is needed in order for SMEs to achieve the goals of the NIMP 2030. In Budget 2023, the Government focused on initiatives to support SMEs, from financing to funding, tax cuts and even a Digitalisation Grant Scheme.

Southeast Asia to outpace China's GDP growth and foreign investment

1. Southeast Asia is likely to outpace China’s economic growth and inflow of foreign direct investments over the next ten years, a new study led by a Singapore-based think tank showed, as the region benefits from growing demographics and a global supply chain shift.

2. The Southeast Asia Outlook 2024–2034 report, which was released on August 1 by Angsana Council, US consultancy Bain & Company, and Singapore’s DBS Bank, projected the gross domestic product of six regional economies: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

3. According to the study, GDP for the six key economies is expected to increase by an average of 5.1% annually until 2034, outpacing China’s projected growth of 3.5–4.5%.

4. By country, Vietnam is expected to lead with 6.6%, followed by the Philippines with 6.1%, while Singapore—the slowest among the six—is expected to manage 2.5%.

Meteor Lake Shortages Prompt Intel's Costly Ireland Ramp-Up Amid Apollo Deal

1. Buyout firm Apollo Global Management (APO.N),  will acquire a 49% equity interest in a joint venture related to Intel's (INTC.O),  new manufacturing facility in Ireland for $11 billion, the companies said on Tuesday.

2. Apollo will acquire the stake in the Fab 34 joint venture in Leixlip, Ireland, the U.S. chipmaker's first high-volume location for its Intel 4 manufacturing process using extreme ultraviolet lithography machines.

3. The deal, expected to close in the second quarter, would allow Intel to redeploy parts of its investment in the project to other parts of its business, the company said.

Fastest-growing countries in Southeast Asia and FDIs Embracing Innovative Technologies

1. A report titled "Navigating high winds: Southeast Asia Outlook 2024-34" was released on August 1, compiled by the Development Bank of Singapore, consulting firm Bain & Company, and Angsana Council.

2. The report forecasts the expected growth of the six largest Southeast Asian economies of Vietnam, Singapore, Malaysia, the Philippines, Indonesia, and Thailand.

3. According to the report, over the next decade, Southeast Asia will likely grow faster than the previous decade, with higher GDP growth and higher total foreign direct investment (FDI) than China. Southeast Asia’s growth will be driven by stronger domestic economies and a resurgence in investment catalysed by China + 1 supply chain shifts.

4. Specifically, Southeast Asia is predicted to grow GDP by 5.1 per cent, on average, in the next decade. Vietnam and the Philippines are expected to be the faster-growing countries, with Vietnam remaining in front.

5. "Vietnam is forecast to maintain a GDP growth rate of 6.6 per cent in the 2024-2034 period and its export-oriented economy is well-positioned to capture China + 1 opportunities," the report said. "The country also boasts a highly diverse source of FDI, productive interprovincial competition, and high-quality workforce and education levels."

6. To grow faster than the forecasts, Southeast Asia should invest in new growth sectors, foster tech-enabled disruptors, expand capital markets’ breadth and depth, and accelerate the green transition, the report added. The region should also commit to growth-friendly multilateral initiatives, including the Regional Comprehensive Economic Partnership, the Belt and Road Initiative, and a transnational electricity grid.

Predictive Maintenance

Predictive maintenance (PdM) is an increasingly popular strategy for facility management leaders. Learn why and learn how to set up a successful PdM strategy.

Understanding WTO Rules on Subsidies: The Agreement on Subsidies and Countervailing Measures

 1. The World Trade Organization (WTO) plays a crucial role in regulating international trade, including the use of subsidies by governments. The Agreement on Subsidies and Countervailing Measures (SCM Agreement) sets the legal framework for how subsidies can be used and challenged to ensure fair competition in global markets.

2.  In this post, we will explore the key aspects of the SCM Agreement, including prohibited and actionable subsidies, countervailing measures, and special rules for agricultural subsidies.

Five Tips For Maximizing Productivity As A Small-Business Owner

1. Small-business ownership can be a challenging and rewarding journey. From keeping track of finances and operations to overseeing employees and making critical decisions, the demands on a small-business owner’s time and energy are never-ending, and it’s no wonder that many small-business owners struggle to stay productive and efficient. But in a fast-paced and competitive business world, maximizing productivity is essential to success.

2. Whether you are looking to grow your business, increase your bottom line or simply reduce stress and improve your work-life balance, productivity is key. In the 20-plus years that I’ve been helping small-business owners and mentoring individuals, I’ve discovered that having the ability to systematize and create processes around productivity is so important. Before I implemented these simple steps, my company ran in a constant state of chaos.

3. From tried-and-true time management methods to cutting-edge technology, there are many ways to improve your productivity and achieve your goals.

Why closing the small business productivity gap can create enormous value for economies

1. Micro, small and medium-size enterprises (MSMEs) play an underappreciated and outsized role in the global economy. They account for 90% of all businesses, half the value added, and more than two-thirds of business employment. In Indonesia, for example, they account for almost 90% of employment and two-thirds of value added. Small businesses also inject dynamism into economies.

2. Many large companies of today were MSMEs not long ago. About one in five of today’s very large companies – defined as having a market capitalization of more than $10 billion in the United States and equivalent values in other economies – were MSMEs at some point after 2000 and have since powered their way to large company status.

3. Yet small businesses struggle with productivity in comparison with large companies. Raising MSME productivity has long been an aim of governments who recognize their central role in economic growth and employment.

The Changing Face Of FDI

1. As recent history has consistently demonstrated, there is nothing more certain than uncertainty. A pandemic, geopolitical tensions, trade frictions and even armed conflict have complicated the landscape for global foreign direct investment, leaving business leaders with no clear signals as they set priorities and make critical investment decisions outside their borders.

2. Adding urgency to the matter, there are now signs of a revival in FDI after a couple of years of decline. But the picture that is beginning to sort itself out is distinctly different from the past. Manufacturing shows promising signs of recovery while nearshoring and friendshoring in new markets are becoming stronger trends.

3. At an estimated $1.37 trillion, global FDI flows grew by a modest 3% year-on-year in 2023, according to preliminary figures from the United Nations Conference on Trade and Development (UNCTAD). But the top-line numbers obfuscate an enormously mixed picture beneath the surface.

4. Most strikingly, once a few European conduit economies are removed from the equation, global flows declined by some 18%. In the European Union, for instance, FDI jumped from negative $150 billion in 2022 to positive $141 billion in 2023, according to UNCTAD, but largely on the back of significant swings in Luxembourg and the Netherlands. Excluding these two countries, inflows to the rest of the EU fell 23%. North America saw zero growth, while other countries saw declines. Flows fell by 9% in developing countries to $841 billion.

Malaysia's industrial output up 5pct in June

1. Industrial output rose 5.0% compared to the same month of the previous year in June, which followed May’s 2.4% increase. The notable pickup was partly driven by faster growth in manufacturing output. In addition, mining and quarrying output rebounded.

2. As a result, the trend improved sizably, with the annual average growth of industrial production coming in at 2.0%, up from May’s 1.4% reading.

3. On a monthly basis, industrial output increased 0.7% in seasonally adjusted terms in June, which was below May’s 1.7% expansion.

Unveiling the SEA Green Economy Index: Tracking Decarbonization Progress in Southeast Asia

1. To better help Southeast Asian markets track their decarbonization progress, the report unveiled the region’s first SEA Green Economy Index which examines how each country is progressing across five metrics with varying weightage totaling 100% – ambition (20%), progress (25%), roadmap (20%), accelerator (25%), and investment (10%).

2. “The index helps provide an objective snapshot of how each country is performing year-on-year and relative to peers. It shows an overview of areas they are doing well and recognizes where progress is being made. It is important to note that this index is constantly evolving as the region continues to tweak initiatives to fit respective markets’ needs,” said Hardcastle.

3. The index shows that Southeast Asia has made some encouraging moves to reduce greenhouse gas emissions, with Singapore and Vietnam making the most progress over the last year. Eight out of 10 countries have net zero targets, and while they have remained the same as the previous year, more than half of the region’s top emitting corporates have set net zero or emission reduction targets, 15 more compared to 2023. In addition, seven countries have shown progress in adopting renewable energy and electric vehicles, preserving forestland, and enhancing health of cropland soil.

4. Translating ambition to action and results will take time. Southeast Asia is still in early adoption and has the opportunity to capture proven and the most cost effective decarbonization initiatives. In 2024, the region needs to double down on the top 13 investable ideas, leverage on the key accelerators to unlock these ideas and ensure better cooperation among governments, corporates, and investors.

"Optimizing Universal Access and Service (UAS) Projects: Strategic Disbursement, Grant Management, and Effective Monitoring"

1. Effective disbursement strategies are crucial for the success of Universal Access and Service (UAS) projects, ensuring that funds are allocated efficiently to bridge connectivity gaps. 

2. The International Telecommunication Union (ITU) outlines various methods for making and managing disbursements & monitoring in UAS initiatives.

China’s shrinking FDI and what it means for its economy

1. FDI into China in 2023 increased by the lowest amount since the early 1990s amid growing disinvestment and concerns about the country’s sluggish economic recovery.

2. According to data released by the State Administration of Foreign Exchange on Sunday, China’s direct investment liabilities – including foreign companies’ retained earnings in the country – reached $33bn (237.53bn yuan) in 2023. The measure is 82% lower than the 2022 level and the lowest recorded since 1993, one year after private business ownership gained full legal status in the country.

3. In November 2023, Chinese officials reported a $11.8bn drop in direct investment liabilities during the third quarter of 2023, showing how growing tensions between Beijing and the West impact the country’s investment climate.

4. Despite the swift economic recovery following Covid, FDI inflows into China slowed in 2022 as a result of the government’s Zero Covid policy – in place until the end of that year – coupled with economic policy uncertainty.

5. At the same time, Beijing has stepped up its crackdown on foreign companies. In January 2024, Beijing launched an anti-dumping investigation into French brandy imports. The announcement came a few weeks after the EU Commission began investigating allegations of biodiesel dumping from China into the EU market and three months after Brussels said it was looking into claims that China was illegally subsidising its electric vehicle market.

6. The Chinese tech sector, however, has seen the most significant drop in market valuation, as continued pressure from the Chinese authorities wiped $1.1trn off China’s major tech companies between 2021 and 2023, according to Refinitiv data cited by Reuters.

7. The US Department of State warns that China’s market remains a “relatively restrictive environment for foreign investors” because of prohibitions on investment in key sectors, as well as unpredictable regulatory enforcement.

8. For that reason, many companies have diversified their investments away from China, instead announcing expansion plans in other Asian nations such as India, Malaysia, the Philippines and Vietnam.

Singapore's Smart Nation 2.0: Advancing AI Leadership and Resilient Digital Infrastructure

1. Singapore has announced plans to inject around £740m (S$1.2bn) into AI development over the next five years,

2. In 2023, Silicon Box, a semiconductor integration company, announced the launch of its $2bn semiconductor manufacturing foundry in Singapore.

3. Located in Tampines, the chip factory is expected to create more than 1,000 jobs with the backing from the Singapore Economic Development Board (EDB).

4. Silicon Box’s facility marks a step forward for Singapore’s ambition to expand its manufacturing industry by 50% by 2030.

5. It is also expected to increase Singapore’s appeal as a desirable location for AI, as semiconductor businesses look to diversify their manufacturing supply chains amid rising geopolitical concerns.

6. Singapore was among the first countries to publish an AI plan in 2019. In December 2023 it launched an updated version of the strategy, outlining ways to harness and use AI for economic empowerment.

7. The city-state took a proactive stance in AI governance by introducing AI Verify in May 2022 – the world’s first AI governance testing framework and software toolkit for companies.

8. Companies like Google, Meta, and Microsoft have already tested the AI Verify tool and provided feedback, demonstrating a collaborative effort towards promoting responsible AI use.

Malaysia's industrial output grows faster-than-expected in March, May 2024 official data shows

 1. Malaysia’s industrial output rose at a faster-than-expected pace in March from a year earlier with the manufacturing sector leading broad gains, the Department of Statistics Malaysia (DOSM) said.

2. The industrial production index — which measures output from factories, mines, and power plants — climbed 2.4% in March compared to the same month in 2023. That was better than the median 1.9% increase predicted in a Bloomberg survey but slower than February’s 3.1% year-on-year growth.

3. On a month-on-month basis, the index rebounded 7.5% in March from February’s decline of 6.3%.

4. The latest reading dovetails with modest improvement in factory output in major exporters China, South Korea, Vietnam and Taiwan over the same month. However, industrial production fell in Singapore while that of the US, Japan, and Thailand declined further in March.

Turkey's FDI Resilience: Strategies to Double Global Share by 2028

 https://www.investmentmonitor.ai/news/tur1. Foreign direct investment (FDI) inflows into Turkey have reached $10bn in 2023, according to the Central Bank of the Republic of Turkey (CBRT).

2. The figures released by the CBRT suggest FDI continues to pour into the country despite economic instability and a devastating earthquake that hit the southeast region of Turkey in February last year.

3. The Investment Office President A Burak Dağlıoğlu commented on the state of global investment in 2023: “Central bank policies and the current geopolitical situation have led to a decrease in global investment. We observed declines in global FDI ranging from 20% to 80% in many emerging economies, including Central and Eastern European countries (CEE) and BRICS countries. Despite challenging global conditions, exceeding $10bn in FDI volume is significant. 

4. The positive signals at the beginning of 2024 indicate a promising outlook for the Turkish economy, with increased investor interest. We expect a surge in investments in 2024, indicating a positive trajectory for the months ahead.”

The MQTT Protocol: An Introduction for IoT Beginners

1. Automated factories, smart home systems, self-driving cars: Different as they may seem, all these technologies have something in common. They rely on devices that communicate with each other. In other words, they share data.

2. For that data to do anything—whether that’s executing an order on a smart CNC machine or tracking a shipping container—your devices must send and receive messages according to the same rules.

3. These rules are codified by messaging protocols. During the early days of IoT, a lot of competing protocols were floating around. You might find IoT systems based on:

• DDS (Data Distributed Service)

• CoAP (Constrained Application Protocol) 

• AMQP (Advanced Message Queue Protocol) 

• QUIC (Quick UDP Internet Connections) 

• And others

4. None of these technologies offered the ideal blend of features for IoT, which requires a protocol that excels at:

• Sending small amounts of data over unreliable networks;

• Operating with limited bandwidth and connectivity;

• Using a minimal overhead and small code footprint;

• Functioning well in devices with limited processing power, memory, and battery life.   

5. Luckily, such a protocol was developed in 1999. It’s called MQTT, and it’s become the de facto standard for IoT communication—both in consumer devices (wearables, smart home products, e-mobility, etc.) and industrial IoT, or IIoT (smart factories, asset tracking systems, smart utilities, and lots more). Why is MQTT becoming the dominant IoT messaging protocol? Is it the right technology for your IoT/IIoT deployment? And if so, what do you need to build an IoT system that uses MQTT?

3 common barriers to AI adoption and how to overcome them

 1. There’s a growing consensus about the need for businesses to embrace AI. McKinsey estimated that generative AI could add between $2.6 to $4.4 trillion in value annually, and Deloitte’s “State of AI in the Enterprise” report found that 94% of surveyed executives “agree that AI will transform their industry over the next five years.” The technology is here, it’s powerful, and innovators are finding new use cases for it every day. 

2. But despite its strategic importance, many companies are struggling to make progress on their AI agendas. Indeed, in that same report, Deloitte estimated that 74% of companies weren’t capturing sufficient value from their AI initiatives.

3. Nevertheless, companies sitting on the sidelines can’t afford to wait any longer. As reported by Bain & Company, a “larger wedge” is being driven “between those organizations that have a plan [for AI] and those that don’t—amplifying advantage and placing early adopters into stronger positions.”

4. So, what’s holding companies back from capturing AI’s value? While there are plenty of barriers to AI adoption, from our experience, three tend to be the most common causes for concern. Here’s what those barriers entail, and why leveraging automation as the ‘muscle’ that allows you to operationalize the ‘brain’ of AI is the most effective approach to realize value from the technology.

Georgia FDI drops by 24% in 2023; Foreign investors losing interest

1. Foreign direct investment (FDI) in Georgia reached $1.59bn (La4.22bn) in 2023, dropping by 24% following a year in which the country recorded more than $2bn in inflows.

2. FDI in Georgia reached $1.59bn in 2023, data gathered by the National Statistics Office of Georgia shows.

3. The number is 24% lower than the previous year when the country recorded slightly more than $2bn in total inflows.

Thailand releases draft Top-up Tax Act to implement the global minimum tax rules under BEPS 2.0 Pillar Two

1. On 1 March 2024, the Thai Revenue Department released a draft legislation for an adoption of the Global Anti-Base Erosion Rules (GloBE rules) in Thailand, aligning with the Organisation for Economic Co-operation and Development's (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two project. The draft legislation was open for a public consultation from 1 March 2024 to 15 March 2024.

2. This draft legislation is a response to the Cabinet's resolution on 7 March 2023 to collect the Top-up Tax in Thailand for in-scope multinational enterprises (MNEs). The Cabinet assigned the Thai Revenue Department with drafting the associated regulations and guidelines. (For background, see EY Global Tax Alert, Thailand plans to implement global minimum tax rules under OECD BEPS 2.0 Pillar Two, 10 March 2023.)