By Ryu Jong-hun, chief executive director of KOTRA Kuala Lumpur Since 1990, Korea and Malaysia have been enjoying close, cordial and a very cooperative bilateral relationship. Korea's exports to Malaysia almost two-fold increase from US$2.951billion to US$4.333billion in the year 1995-1996 while importing from Malaysia also achieved almost 20% growth within two years time. During the financial crisis in 1997/98, the trade value for both countries was badly hurt by massive depreciation by the afflicted economies. For the first time it recorded a contraction of 17.3% for export to Malaysia and a contraction of 32.7% for import from Malaysia. Although the two countries were affected by the 1997/98 crisis, the have emerged stronger even though they had their own unique and different approaches in copping the challenges. The trade relation has flourished and become stronger after the crisis. Today, Korea is an important trade partner for Malaysia; in fact, it has grown over years to the seventh largest trade partner. In 2004, total trade between countries stood at US$10.159billion, almost a twofold increase from US$6.754billion in the year 2001. Export to Malaysia was valued at US$4.480billion in 2004, while imports from Korea amounted to US$5.678billion as shown as table below:- Today, the main products imported from Korea in 2004 were semiconductors, computers, motor vehicles, mobile telephones, steel and iron, electronic tube and vessel. Meanwhile, Malaysia's major export to Korea in 2004 by product sector included mineral fuels, electrical and electronic products, boilers & machinery, wood, chemicals and etc. As the end of October 2005, bilateral trade between the two countries stood at US$8.805billion an increase of 10.4% compared to the same period of last year; with Korea exporting US$3.866billion worth of goods and importing products valued at US$4.938billion. The outlook for the bilateral trade is extremely encouraging given the fact that the two nations have yet to fully realize their trading potential. Investment in Malaysia In term of investment, Korean companies invested over US$85million in 25 manufacturing projects in Malaysia in 2004. For the period January to September 2005, a total of US$174.9million in investments from Korea was recorded for twenty projects and created 1,559 jobs. Investment in the first nine months of this year has therefore already surpassed total Korea investment in 2004. The main investment concentrated in non-metallic mineral products, electronic and electrical product, textile products and service related sector in trading, wholesale, retailing, construction, engineering and freight & forwarding services. Samsung Electronic Malaysia Sdn Bhd has always been a major investor among the Korean companies that have invested in Malaysia since its establishment in 1989. In recent years, Samsung has evolved as a major consumer technology brand regardless in home, office or mobile environments. Samsung Group of companies produce cathode ray tubes, glass panels & funnels, computer monitors, TVs and microwave ovens with a total of estimated turnover of US$1.8billion in 2005. Samsung Electronic has invested US$1.1billion into Malaysia as their manufacturing and export base with the creation of 7,000 jobs. ICT Sector in Malaysia The ICT industry is a growth industry in Malaysia and it covers hardware, software and Research & Development (R &D) sectors. These sectors are further classified into sub sector as the follows:- * Hardware - computer and computer peripherals, data storage devices and telecommunications equipment/devices * Software - software development activities * R & D - design and development activities of hardware and software system * Photonics/Optoelectronics/Optical Fibres and Cables The ICT industry's export performance has been increasing steadily over the years from RM35.3billion in 1998 to RM71.1billion in 2004 to RM29.7 billion in May 2005. Major export destinations are USA, Japan, Singapore and Hong Kong. While for the imports of ICT, major imports for computer and computer peripherals were sourced from China, Singapore and USA, while telecommunications products were imported mainly from China, Japan and Korea. Imports value totaled RM23.2billion in 2004 and RM9.7billion in May 2005. Malaysia is a net exporter of ICT products of RM48.0billion in 2004 and RM20.0billion in May 2005. To spearhead development in ICT in Malaysia, the government continues to develop the Multimedia Super Corridor (MSC). Conceptualized in 1996, the MSC is a dedicated 15 X 50 km Corridor, stretching from the Petronas Twin Towers in the north to the Kuala Lumpur International Airport in the south; and encompasses Cyberjaya (the Technology Core) and Putrajaya (the new administrative capital of Malaysia). Implementation of the MSC is divided into three phases from 1996-2020. Mandated to oversee the development of the MSC is the Multimedia Development Corporation (MDC) based in Cyberjaya. The MDC has been incorporated under the Companies Act of Malaysia, owned and funded by the Government. Over the year, the MSC has since grown into a thriving dynamic ICT hub, hosting a total of 1,385 MSC status companies ( as at 24th November 2005) comprise of multinationals, foreignowned and home-grown Malaysian companies focused on multimedia and communications products, solutions, services and; research and development. MSC provides a conducive environment for the world's leading ICT companies to expand their business, undertake research, develop new products and technologies, and export their products. The MSC is also an ideal growth environment for Malaysian ICT SMEs to transform themselves into world-class companies. Furthermore, the MSC welcomes countries to use its highly advanced infrastructural facilities as a global test bed for ICT applications and serves as a springboard to market in ASEAN and the Middle East. As at the end of December 2004, total sales of MSC status companies (1,163 companies as in 2004) were estimated at RM6.78 billion. A total of 22,293 job opportunities were created, of which 19,318 (86.6%) were knowledge workers.