Bilateral trade between Malaysia and Saudi Arabia for the past nine years for the period year 2000 to 2008 has recorded a strong growth of 204.7 percent, from $1.0 billion in year 2000 to $3.1 billion at end of 2008. The increase was attributed mainly to the expansion of Malaysia imports of petroleum and petroleum products from Saudi Arabia.

During the period 2000 to 2008, Malaysia’s export to Saudi Arabia has increased from $340.6 million in year 2000 to $1 billion at end of 2008, a growth of more than 200 percent. Similarly, Malaysia’s import from Saudi Arabia also expanded significantly by more than 300 percent from $667.5 million in 2000 to $2.156 billion at end of 2008.

As for year 2008, bilateral trade between Malaysia-Saudi Arabia was in favor of the Kingdom, mainly due to the continuing high import of petroleum and petroleum products. Total bilateral trade of the countries was $3.16 billion.

Malaysia’s exports to

Saudi Arabia (2007-2008)

In 2008, Malaysia’s total export to Saudi Arabia registered an increase of 42.6 percent, from $703.8 million in 2007 to $1 billion. Malaysia’s top five major export items to Saudi Arabia were ingots and other primary forms of iron/steel (8.3 percent of Malaysia’s total exports to Saudi Arabia in 2008), television receivers etc. (8.1 percent), telecommunication equipments and parts (6.9 percent), copper (4.7 percent) and hydrocarbons and their derivatives (4.2 percent). Together, these five items accounted for 32.2 percent of Malaysia’s total export to Saudi Arabia in 2008.

Malaysia’s imports from

Saudi Arabia (2007-2008)

Malaysia’s total import from Saudi Arabia in 2008, increased moderately by 11.4 percent to $2.156 billion from $1.935 billion in 2007. The two top major import items that represented 91 percent of Malaysia’s total import from Saudi Arabia were petroleum oils, crude (73.6 percent) and other petroleum products (17.8 percent). The continued increases of Malaysia’s import of the petroleum products from Saudi Arabia were due to the rapid economic development of the country, particularly Malaysia’s expansion in the industrial sector.

Balance of trade and

ranking (2007-2008)

Bilateral trade between Malaysia and Saudi Arabia, during the period 2007 to 2008, continues to be in favor of Saudi Arabia with a surplus of $1.152 billion. However, this represented a decline of 6.5 percent as compared to the previous year.

Globally, Saudi Arabia maintained its ranking as Malaysia’s 19th largest trading partner since 2007. Total trade with Saudi Arabia accounted for 0.93 percent of Malaysia’s total global trade of $331.5 billion for the year 2008. Saudi Arabia as Malaysia’s largest export destination, was ranked 22nd in 2008 vis-à-vis the 28th ranking in 2007. Its total import accounted for 0.53 percent share of Malaysia’s total global exports in 2008.

As the source of import, Saudi Arabia ranked as Malaysia’s 17th largest source, dropping by only one rank compared to the pervious year. Malaysia’s imports from Saudi Arabia remain accounted for 1.5 percent of its total global imports.

In terms of total trade for the West Asia region, Saudi Arabia remained as Malaysia’s second largest trading partner after the UAE. The Kingdom accounted for a total share of 20.3 percent of Malaysia’s total trade with the region. In terms of export destination in the region, Saudi Arabia has overtaken Turkey to become the second largest export destination for Malaysia, representing 12.2 percent share. The UAE remained the largest. On the other hand, Saudi Arabia ranked as the second largest source of imports for Malaysia in the region with a share of 32.8 percent, behind the UAE that is ranked first. In 2008, Malaysia continued to be the net exporter of all manufactured goods to Saudi Arabia, except for chemical and chemical products and petroleum products, and Malaysia’s imports from Saudi Arabia were higher than its exports to Saudi Arabia.

Malaysian investment

in Saudi Arabia

Malaysian investment in Saudi Arabia has increased significantly in the last three years. Total number of companies registered with Saudi Arabian General Investment Authority (SAGIA) is 87 in which 17 companies are involved in the industrial sector with total investment value $4.3 billion, 70 companies are involved in the services sector with total investment value of $238.6 million.

In terms of ownership, 34 out of total 87 companies are registered with 100 percent Malaysian ownership while 53 companies are registered as joint-ventures with Saudi as well as foreign companies. The investment activities that Malaysian companies are involved in include township development, power generation and water desalination, building and road construction and contracting, construction consultancy, project management, hotel managements, hospital management solutions, installation and operation mobile network system, civil works and civil engineering, environmental solutions, sewerage system, IT solutions and restaurant operation.

Saudi investment

in Malaysia

As of May 2009, there were a total of 10 manufacturing projects approved with participation from Saudi Arabia with investments amounting to $61.2 million. Saudi investments were mainly in the following industries:

n Food manufacturing

n Electronics & electrical products

n Textiles & textile products

n Plastic products

n Machinery & equipment

In 2008, three projects with Saudi participation have been implemented with investments totaling $14.8 million.

For the period of 2006-2008, two companies from Saudi Arabia were approved with Regional Office (RO) status.

Conclusion

In terms of trade, there are still a lot of opportunities between the two countries both for products and services. Saudi companies that are interested to do business with Malaysian companies are most welcome to contact Malaysian Trade Office in The Kingdom, MATRADE Jeddah (www.matrade.gov.my), in Jeddah, e-mail: [email protected] Saudi companies that are interested to get more information about investing in Malaysia can contact Malaysian investment office, e-mail: [email protected], website: www.mida.gov.my

— Amran Bin Yem is the Trade Commissioner in the Consulate General of Malaysia (MATRADE Jeddah)