Posts in category: Insights

By Yong Yoon Kit and Khairunnisa Ghazali

Business tourism is defined by the International Congress and Convention Association (ICCA) as “the provision of facilities and services to the millions of delegates who annually attend meetings, congresses, exhibitions, business events, incentive travel and corporate hospitality”.

It is an expansion of the traditional Meetings, Incentives, Conferences and Exhibitions (MICE) sector by interconnecting with activities within the tourism sector of the host country. Attracting business tourists to attend events at a host country is crucial as over 25% of international delegates are likely to bring their spouses along with approximately 65% of these delegates returning with family and friends in the future (Economic Transformation Programme [ETP] Lab Report, 2010).

Business tourism itself had a larger multiplier effect to the economy. Furthermore, it was less affected by seasonal price fluctuations and was typically used to reduce the ‘peak-trough’ differences in the year.

However, Malaysia was trailing behind Singapore, Indonesia and Thailand in the business tourism sector as events in Malaysia were mainly fuelled by small to mid-sized local and regional conference events. This presented a strong case for Malaysia to develop and be positioned as a leading business tourism destination to attract high-quality international events with large numbers of delegates. This, in turn, was targeted at translating into higher receipts quantitatively as well as generate qualitative benefits in terms of enhanced trade and know-how. It was estimated that for every RM1 spent by the government of Malaysia, there was a return-on-investment of RM111 in revenue obtained by the business tourism industry (ETP Lab Report, 2010).

The Malaysian Convention & Exhibition Bureau (MyCEB) that was set up in 2009 was specifically formed to drive the growth of the business tourism ecosystem in Malaysia. To help formalise its operations and funding from 2010 onwards, business tourism became one of the Entry Point Projects (EPP) under the Tourism National Key Economic Area (NKEA), one of the sectors identified under the National Transformation Programme. The Tourism NKEA had an ambitious goal of growing the business tourism sector to reach an 8% share of total tourist and international delegate arrivals by 2020 from a baseline of 5% in 2009.

Detailed Action Steps and Solutions Undertaken

Three main approaches were taken by the government to develop the sector:

Strengthening core operations to drive the industry

Provision of adequate funding to develop the sector

The Performance Management and Delivery Unit (PEMANDU, now a private entity known as PEMANDU Associates), then part of the Prime Minister’s Department of Malaysia, played a pivotal role in securing adequate funding from the government for MyCEB’s operations and development of the industry. The subvention funds issued by MyCEB to the private sector were allocated via a stringent mechanism and careful monitoring to ensure these funds were utilised to support achievement of the number of tourist arrivals and yield.

Implementation of a robust monitoring mechanism

This EPP’s progress was tracked via a stringent monitoring mechanism put in place by PEMANDU. Robust Key Performance Indicators (KPI) were crafted to drive achievement of the desired outcomes for this project. The indicators measured were primarily focused on the number of international delegates secured for each event and the estimated economic impact from the events hosted. The progress in achieving the KPIs were reported monthly while implementation issues were reviewed and resolved on a weekly basis.

Change of event management to maximise tourist yield

Taking a step further from event organisation, additional activities were conducted by MyCEB to tie the business events with other tourism activities. Cross-selling opportunities were taken where each event was provided pre and post-event tour options and delegates were clearly informed of the tourist activities available in order to maximise yield.

Coordination of players

Leveraging on industry experts

Getting the private sector to take ownership in developing the industry together was crucial. Thus, the Malaysia Conference Ambassador ‘Kesatria’ Programme made up of key opinion leaders and industry experts was launched in 2012. The programme’s objective was to encourage potential local hosts to bid for and stage international conventions. 47 ‘Kesatria’ ambassadors have been appointed, generating 135 leads with the potential to bring in 200,000 delegates and an estimated economic impact of RM2.1 billion.

Improving government’s facilitation of the industry

In addition to the focused attention by MyCEB, the government played a strong role in facilitating the growth of the industry. A Steering Committee comprising representatives from then-Ministry of Tourism and Culture (MOTAC), Ministry of Finance, Ministry of Home Affairs, Ministry of International Trade and Industry, MyCEB, events-related associations and other relevant private sector stakeholders met monthly to review and problem-solve implementation issues on business tourism related activities. Notable issues resolved included immigration requirements for exhibition delegates and international speakers to improve Malaysia’s attractiveness. An inter-ministerial committee with representatives from all ministries was also set up in 2016 to coordinate the involvement of the government for the events to be hosted in Malaysia and minimise overlap of resources provided.

Providing an enabling environment

Capacity-building of the industry

In order to support the development of professional standards and skills training for event organisers, the Industry Partner Programme was established under MyCEB in 2011. This programme’s objectives were to provide access to market insights, encourage industry training and certification as well as facilitate co-operative marketing and promotions efforts. This activity was instrumental in ensuring a pipeline of capable event organisers who will be able to continue spearheading the industry.

Development of shell sites

Shell sites are required to host events such as gala dinners. Iconic shell sites can differentiate Malaysia from its competitors in other countries and provide a draw for organisers to host their events here. In Malaysia, no dedicated site existed as at 2010. Under this initiative, four shell sites were formally recognised comprising Central Market, Thean Hou Temple, Forest Research Institute of Malaysia (FRIM) and Maritime Centre Putrajaya.

Impact and Results

As a result of the concerted efforts spearheaded by MyCEB and supported by key stakeholders, business tourist expenditure grew at a CAGR of 16.3% from RM386 million since the launch of project in 2011 to RM954 million in 2017. The number of events secured annually also grew from only 49 in 2011 to reach 149 in 2017 with significant return of investment growth from 14.4 times in 2011 to a high of 47.7 times in 2017 (MyCEB, 2017).

In total, this EPP supported 2,013 events between 2010-2017 and attracted more than 943,146 international delegates to Malaysia, which translated to an estimated RM11.5 billion in economic impact to Malaysia. The share total arrivals from business tourism grew from 5% in 2009 to 7% in 2017 (ICCA, 2017).

Malaysia successfully secured and hosted various prestigious international events as exemplified below (list is non-exhaustive):

Hosting these international events increased Malaysia’s global recognition as a leading business tourism destination. In addition, this positively impacted various ancillary components such as accommodation, catering, logistics, events management as well as increasing the spillover effect for leisure tourism. In 2016, Malaysia was ranked 10th for business travel contribution in the World Travel and Tourism Council (WTTC)’s ranking. WTTC also reported that an analysis from Oxford Economics had shown that business travel spending in Malaysia was significantly higher than leisure travel and the average in the ASEAN region (WTTC, 2016).

As there was no dedicated body or initiative overseeing the development of this sector previously, the growth can be attributed to the success of this EPP under the Tourism NKEA.

Lessons Learnt and Recommendations

A key lesson learnt from this initiative is that it is highly imperative to have a dedicated body to spearhead the development of this sector and coordinate the various players from both the public and private sectors. Without a dedicated body to push the business tourism agenda forward, the initiative would not have been able to grow as rapidly. In addition, adequate funding support was critical to ensure continuous development as any reduction would directly impact the amount of subvention funds that could be provided, thus reducing the number and size of events that could be secured.

The involvement of private sector associations was also important to bridge the last mile in securing international organisers as well as provide the relevant expertise to ensure the success of the events. For example, the Malaysian Association of Convention and Exhibition Organisers and Suppliers (MACEOS) contributes to the development of this industry with its network and understanding of the industry, including the operations and execution of hosting international events. MyCEB plays a role to assist the association in market intelligence, bidding package and proposals to secure Malaysia as the host destination.

Another lesson learnt was that it was crucial to secure the support of other ministries and agencies. This is important as the involvement of the relevant ministry in charge, with the attendance of senior civil servants or the minister, serves as a draw for international event organisers. One of the ways to address this during the implementation phase was to create an inter-ministry coordination committee to coordinate the planning, securing, and organising of the business events hosted in Malaysia. This proved an important step in ensuring wider reach of MyCEB from only being under the purview Ministry of Tourism & Culture, to also work with various ministries which oversee policies such as industry development, the economy, immigration and trade.

Moving forward, PEMANDU Associates continues to have the view that a strong dedicated body to drive this sector is necessary, equipped with adequate funding and emphasising on recognised ROI, to support the growth of this industry. In addition, strong coordination and cooperation between the public and the private sectors is crucial to ensure the success of this industry.

By Adlina Atikah Amran

The public sector, traditionally seen as inefficient and bureaucratic, has embraced the importance of transformation in its operations.

In recent years, this has seen governments around the world adopting the ‘lab’ methodology as a problem-solving tool to catalyse transformation. In essence, labs are a facilitated environment that encourages robust discussions between various stakeholders to develop solutions for specific issues. This setting allows for innovative ideas to take shape which can yield positive outcomes. These ideas will then lead the team to pursue a process, agenda or programme to implement the idea with accountability, clear determinants of roles, budget and milestones to achieve success.

In Malaysia, thousands of people from various backgrounds came together in a series of labs to develop a socioeconomic agenda to transform Malaysia’s economy and uplift the lives of Malaysians. Utilised to plan, initiate and execute the National Transformation Programme (NTP), the labs were recognised as a ground-breaking approach for the country’s public sector to problem-solve, identify opportunities and implement socioeconomic reform. The labs created a collaborative environment for stakeholders to identify problems, craft solutions, recommend initiatives and create a framework for transformation for its robust implementation. It helped break down silos between agencies and bring input from subject matter experts to critically argue and resolve issues.

Through the labs, initiatives were developed to enable private sector participation in the economy, ensure sustainable public finance and increase the country’s GNI per capita. The programme’s initiatives, co-created by the public and private sector, positively impacted social development in the country, creating over 2.26 million new jobs and contributing to lifting 2.9 million individuals out of poverty as at the end of 2017.

The role of labs as a progressive and proven tool for public sector innovation has been demonstrated its adoption by governments around the world.

In Denmark, the government established Mindlab in 2002 to initially carry out the task of breaking down silos between ministries and engage in service design projects, and later on manage more complex projects such as policy-making, reform and capacity-building. One of the pioneers of labs, Mindlab has inspired the set-up of many similar labs and methodologies.

In the view of Mindlab, the public sector has more indicators for success compared with the private sector: productivity, service, changes in behaviour and democracy. Therefore, Mindlab’s methodology is based on the use of ethnography and design methods such as prototyping and testing to create solutions in collaboration with citizens, businesses and government agencies. The co-creation process leads to the invention of designs which enables problems and opportunities to be reimagined.

Mindlab was initially intended to operate for a few years, but it succeeded in remaining relevant by focusing on current issues and always planning ahead of trends. Its reach across the government is unprecedented and has resulted in a major shift in how organisations think and work in Denmark.

In 2018, Mindlab was evolved and replaced by the Disruption Task Force, a unit set up by the Prime Minister of Denmark, to move Denmark’s public sector transformation to a new phase. This involved digitally reforming Denmark’s civil service, building on Mindlab’s legacy of enabling and encouraging recursive intervention to resolve issues and embedding the culture of innovation within the government.

In South Korea, Seoul’s Mayor Park Won-soon established the Seoul Innovation Bureau (SIB) in 2013 with the objective to transform Seoul into a city of innovation. The idea was brought about to bring radical changes across the government by getting ideas from citizens and working with departments to implement them. This is done with the aim to eliminate excessive bureaucracy. Thus, its key tool has been to engage citizens in getting ideas and sharing resources for city policies through its “Sharing City” initiative.

One of the most significant and popular citizen-led transformation facilitated by SIB is Seoul’s night bus. The idea was sparked by a citizen on Twitter, which was supported by many others. The SIB then used data from people’s phones in the planning of late-night bus routes, guided by the locations of 3 billion phone calls. Currently, the buses run on eight routes between midnight and 5am.

In 2018, the SIB will be launching a living lab to try out solutions for some of the most complex forces shaping the city – rising property prices, youth unemployment, healthcare, the sharing economy and technology. It plans to employ a combination of diverse methods to gather and test ideas via pilot projects, workshops and conferences.

The adoption of the lab methodology globally has shown how labs help governments deep dive into specific subject areas and get their implementation programme right at the start to ensure the success of their transformation agenda. However, whilst the labs are an innovative tool and environment to chart out a true north for any transformation agenda, it is only an initial step of a transformation.

The real work comes after a roadmap with clear deliverables, accountability and deployment of resource has been laid out, and discipline of action is practiced in executing the carefully designed programmes to achieve tangible and measurable outcomes. As demonstrated by global experiences, the implementation of public sector agendas can only succeed with the presence of clear accountability, rigorous monitoring and problem-solving in a recursive manner.

PEMANDU Associates coordinates and facilitates labs and provides assistance in monitoring implementation of public sector transformation and business turnaround. Our lab methodology, part of PEMANDU Associates’ BFR 8-Step Methodology, enables the delivery of solutions through robust analytics and discussions from a myriad of individuals involving the public and private sector, as well as subject matter experts. If you’d like to find out how a lab can be constructed and adapted to your needs, do not hesitate to contact our team of consultants at [email protected].

Our BFR Untold series sets out to uncover what really goes on behind the transformational projects delivered by PEMANDU Associates. This month, we feature Woody Ang, Senior Vice President at PEMANDU Associates, about his experience working on Oman’s Tanfeedh programme.

By Adlina Atikah Amran

“Be on standby to fly out to Nigeria at any time,” read the text sent by my boss, the Managing Director of COMMUNICATE.

We had been tasked with organising an Open Day for the Government of Nigeria following the end of the Nigeria Economic Growth and Recovery Plan labs, providing end-to-end services from content creation for the event’s communication materials to event management.

The moment I received that text message is when the weight of the project pressed on my shoulders. Up until that point, I had already successfully fielded the curveballs from the project and I always knew there was a possibility I would have to participate in some engagement on the ground. Yet I still felt that I was not prepared to fly to Africa. My tummy did a few somersaults and I started having sleepless nights up until the day of my flight.

Amidst all that panic I took a step back and thought to myself – what was I so afraid of? What was it that made me so worried? I doubted that it was the work itself, as it was something I was used to doing and I have a fantastic team to support me.

After much introspection, I admitted to myself that my biggest worry was change. I admitted that I was not ready to adapt to an unfamiliar environment and manage communications for the first foreign clients I had worked with. Ironically, I serve an organisation which champions change and transformation, but there I was, afraid of change.

Try. Do not be afraid to try.

Following my self-diagnosis, I decided that my anxiety-ridden days should not prolong, and I needed to break out of that cocoon and face my reality. I fully embodied the transformation ideology and took this as an opportunity for career and personal elevation. I put my game face on and prepared myself to make that 20-hour journey to Abuja, where the Open Day was being held.

The next few days before my departure were a challenge for the COMMUNICATE team as we worked with stakeholders in two time zones. We would be perched in front of our laptops from 9am to 6pm Malaysia time, and then 9am to 6pm Nigeria time, which is 7 hours behind our local time. Working double the work hours, our days literally never ended.

It was also a race against time as the work involved the production of physical deliverables which require special printing. Our days revolved around cycles of writing, designing, editing and reviewing, up until final approvals.

Finally, the time had come for me to board that flight. My team and I flew in 10 days prior to the event and received a warm welcome from our Nigerian counterparts, which eliminated 70% of the worries I had. Frankly, I felt foolish for worrying so much before my departure. The work was the same…but different in many ways. It required adaptation on our end and clear and concise communications from both parties to make the work, work.

The experience was an eye opener and it taught me to be exceedingly detailed and clear in my instructions and explanations, to never assume and to trust the people I work with. There were, of course, hiccups along the way, some so complex I felt like we would never find a solution. Most of the issues we encountered were expected but there were some which I was absolutely not prepared for. The smallest of them being…the inconvenience of not having access to an A3 printer and a car at 11pm on the night before the event.

Nonetheless, with the combined effort of all parties and despite the complexities we encountered, COMMUNICATE was able to help the Nigerian Government pull off its first Open Day.

So, who followed me back to my country?

I returned from my 10-day trip to Africa, my first foreign work assignment, with a wealth of experience, wisdom and courage to transform. That is what followed me back to my country.

The biggest lesson I learned was that no matter what comes your way, never be afraid and trust your capabilities because if you do not believe in yourself, who would? If you ever need help, do not be afraid to ask and learn from others who are more experienced. Mistakes are inevitable, but that should not hinder you from doing your best. You should always own up to your mistakes and make them right.

Fast forward several months later, and my experience in Nigeria has proven to be invaluable to my career and personal development, plus it makes a great conversation starter!

If you ask me, I would do it all over again.

(True story: I was running around the event venue making sure everything was going to plan when out of the blue, I heard someone speak as I zoomed past him at the main entrance. In a deep and low voice just loud enough for me to hear, he said, “I will follow you back to your country”. What he said gave me chills, but I just laughed it off and for my safety, hung around my team for the rest of the event!)

By Woody Ang & Alaudden Mostafa

The potential remains limitless

Mining and quarrying have been age-old practices in Oman dating back more than 2000 years. The Sultanate is endowed with a variety of mineral deposits such as chromite, gypsum, limestone, building materials and marble. These minerals remain an important asset to Oman’s economy, with the country still possessing approximately 97% unexploited mineral potential from its industrial and metalliferous deposits.

While the mining sector acts as a catalyst for the growth of core industries like steel and cement, its contribution to GDP is still very modest at 0.5% as of 2017. One reason for this is because the sector is led primarily by small-to-medium sized companies, dealing mostly in traditional mining industries such as building aggregates. Given the low-value, high-volume nature of these industrial minerals, there is limited potential for increasing contribution to the overall Omani economy in its current form. The past 5 years have seen production value drop by 3.4%, even though production volumes have grown by 4%. The complex nature of regulating the mining industry has further compounded this scenario. Impediments to investment and growth include the lack of an attractive investment environment and inconsistent enforcement of regulations, particularly in the collection of royalties, and tedious licensing processes. This highly capital-intensive industry also demands a consistently updated geological data at national level, which Oman does not yet possess.

Given the combination of these factors, existing investors and mining operators are limited in number and the country has seen a noticeable reduction in exploration and developmental projects. This impacts the sector’s growth and sustainability prospects and its potential contribution to GDP.

Against this backdrop, Oman recognised that significant steps are required to remove the obstacles to sector growth. To lead the sector’s transformation effort, the Public Authority for Mining adopted a collaborative, result-driven approach for Oman with the introduction of the Mining Lab via PEMANDU Associates’ Big Fast Results Lab Methodology. The lab focused on three key pillars: optimising industrial minerals value contribution, reviving significant value contribution from metalliferous minerals and improving the sector’s business environment and governance.

Investors and Private Sector lead the way

When attempting to identify the real economic potential of these industrial minerals, many conclude that a simple extract-and-sell strategy is sufficient to generate growth. The Lab provided a platform of discourse and rigorous analysis which revealed that this widely held view was untrue. Despite the availability of these natural resources, Oman struggled to deliver a competitively priced product to market. The final cost of industrial minerals such as limestone are highly dependent on the geographical distance and logistical requirements between both the source mines and the destinations seeking the commodity. It was therefore important for Oman to find ways to capitalise on its geographic location to reduce the cost-to-market.

Following careful consideration and selection, the Lab recommended the formation of a Centralised Trading Company (CTC) led by a consortium of private industry players to optimise the handling of outgoing production to better fit market demand. The CTC will look to maximise value extraction by also optimising available logistics and exhibiting strict cost discipline to derive maximum value for the country’s producers.

To complement the CTC, focus will also need to be shifted beyond upstream activities towards higher value downstream manufacturing. The Lab identified and prioritised nine private sector-led integrated downstream industrial minerals projects aimed at delivering tangible results leading up to 2023. Amongst the pathfinder projects include the extraction of basalt to produce continuous basalt fibre, the extraction of dolomite to produce magnesium metal and the extraction of potash to produce premium grade potassium.

Despite metalliferous minerals being the high value contributor amongst the existing commodities, new exploration activities have dwindled over the past decade with almost no new development projects to replace ageing mines. This is particularly evident in the copper sector where there are currently no active mines despite strong proven resources available in the country.

The Lab nevertheless enabled the identification of private sector-led upstream and downstream projects for copper and chromite, along with potential downstream development opportunities in magnesium and silicon. These projects include 14 copper project sites and three new concentrator plants to reinitiate copper production and enable feed to downstream by import substitution of concentrates.

Aside from copper, 28 private investment -led chromite project sites and one beneficiation plant were identified to increase chromite production and optimise utilisation of local chrome resources in Oman, which can be fed to downstream ferrochrome plants.

After six weeks of robust deliberations, the Lab successfully unlocked the Washihi Integrated Copper Mining Project, Oman’s first copper mining project in 14 years. The project marks a resumption of copper mining activity, which truly is an example of Big Fast Results in action.

It’s all about the right Business Environment

With investors ready to commit, it is imperative that the business environment is made as conducive as possible to realise these investments. The existing licensing process requires dealings with eight different government entities whilst there is little transparency on the tax and royalty regime – these will now need to change.

Firstly, it was decided that the licensing process will be simplified via a single entity adhering to a clearly stipulated approval timeline and implementing a pre-approval clearance mechanism. With the introduction of this new process, previously lengthy license processing timelines that could take months and sometimes years will now be a thing of the past. This will also eliminate the prior lack of standard operating procedures that necessitated investors to follow-up with the Public Authority on the status of the requested approvals regularly on their own.

Secondly, the Lab also recommended a dynamic royalty rate to replace the previous flat royalty rate of 10% across commodities; a rate which is relatively higher than in other mining countries. The proposed dynamic royalty initiative will apply commodity-based formulas where different minerals will be subjected to different valuation methods or rates. In addition to this, the Lab also proposed a royalty discount mechanism upon fulfilment of certain set criteria which include downstream production promotions, amongst others. Such incentives should ensure higher in-country value and will incentivise industry growth.

Exciting times now lie ahead for Oman’s Mining sector and there is great optimism on the newly-formed winning coalition between the public and private sector. Oman has taken bold decisions and significant steps towards improving the outlook for the sector. In total, the Labs unlocked more than 10 new exploration licenses and documented another 50 applications to be further reviewed for potential approval. This injection of urgency is a far cry from the original state of having minimal to no new exploration projects.

With committed private investments amounting to more than OMR50 million for shovel-ready projects, the Public Authority of Mining is committed and fully aware of the need to lead the way in breaking down the silo mentality that often permeates within Government. All that remains is for the key industry and Government stakeholders to maintain the discipline of action and stay the course that they have plotted together. The mining engine of Oman has gotten a much-needed restart and the country hopes it will begin to truly fulfill its untapped potential.

By Ku Kok Peng

The word ‘govern’ comes from the Latin term ‘gubernare’, which means ‘to steer’. However, the success of any government has less to do with the act or omission of steering, but more to do with ‘what’ and ‘how’ it has steered.

Our experience around the world has shown that many governments inherently have several challenges in discharging their responsibilities. Chief among them is the lack of clear focus on their strategic priorities, as most governments are unable to resist the temptation to do more in every area. Even when they get their priorities right, governments are large entities and tend to work rigidly and in silos, without detailed, implementable programmes.

Successful governments invariably exhibit both ruthless focus in areas where they can or work to be competitive, as well as having a practical execution plan that they facilitate, with recursive iterations in implementation.

Ruthless prioritisation

Ruthless prioritisation is totally necessary given that resources such as time, man-power and funds are always finite. Governments must prioritise sectors and industries that would create the most beneficial impact for its economy. This would enable the government to dedicate the right amount of resources to ensure that these prioritised areas can be facilitated for increased growth. It also acts as a signpost for investors to know what areas their investment will be given the whole of government support and facilitation.

Singapore, with no natural resources, set its mind very early on to focus on services supported by evolving manufacturing activities. Today, it is one of the world’s leading financial and logistic hubs as well as high-value R&D and industrial centres. In a similar vein, South Korea prioritised on export-led industrialisation as their main strategic plank, focusing on heavy industries and ICT activities.

Following the global financial crisis in 2009 and with an economy stuck in the middle-income trap, Malaysia too decided to embark on a more pronounced productive sector prioritisation. Blessed with natural resources to produce agriculture and fossil commodities, rapid downstream value-addition to these sectors was pursued to secure markedly higher income.

For instance, the oil and gas sector developed its erstwhile neglected mid and downstream value chain more concertedly, investing in storage and integrated petrochemical complexes that also allow it to tap higher value market segments but also paved the path into trading activities. Meanwhile, palm oil diversified very rigorously from edible oils and fats and basic oleochemicals to much richer segments of oleo derivatives, nutraceuticals and pharmaceuticals.

With a solid base in the electrical and electronics industry, steps were also taken to move up the value chain while closing the gaps in components, devices and services value chains along the way. Efforts were focused on three catalytic sub-sectors namely, electrical and electronics, chemicals, and machinery and equipment (M&E), with aerospace and medical devices identified as adjacent sub-sectors with high-growth potential as part of a 3+2 strategy. (Note: 3+2 refers to segments in E&E, chemicals and M&E plus aerospace and medical devices.)

Malaysia is fortunate that its earlier industrialisation path, driven primarily by FDIs in assembly of E&E & M&E products, created a complex economy that made later industrial prioritisation under the National Transformation Programme, including expansion into areas such as Internet of Things (IoT), aerospace, advanced materials and medical devices, an easier task.

It literally took a leaf from Ricardo Hausman’s theory of monkeys and trees[1]. The renowned economist uses the metaphor of a forest, where products are trees and firms and talent are monkeys. The closer the trees are to each other, the easier it is for monkeys to swing from tree to tree. “Economic development,” he said, “is the process of the monkeys colonising the forest.” In the Malaysian context, sub-segments such as E&E are the trees. They are heavily populated and primarily located in the northern corridor. They also produced highly skilled talents that have been able to spread into adjacent sub-sectors such as aerospace and medical devices due to common skills such as precision engineering and robotics.

Active Facilitation

Strategic direction for economic development alone is not sufficient. It needs to be complemented by active facilitation during the delivery and implementation of strategic economic plans and projects. This entails building the collaboration between the public and private sectors to improve cohesion and obtain results from these projects. Once key economic areas have been identified, the implementation of priority sector projects identified need to be closely monitored and where necessary, intervention and problem-solving needs to be carried out to resolve any implementation issues.

Having a multi-layered governance structure that operates both intra-ministry as well as inter-ministry is crucial. A multi-layered governance would improve communications between and within ministries to ensure programmes are implemented and problem-solved with the support of all relevant stakeholders. Governance will be even more effective if it has the commitment of the highest leadership, who can act as the ultimate arbitrator, especially on cross-ministry issues that hold back project implementation.

Invest KL, a special purpose unit set up in 2011 with the sole objective of attracting 100 MNCs to set up regional hubs in Greater Kuala Lumpur, is a good example of successful active facilitation. It proactively scouts and handholds the investors’ entire investment process, in collaboration with other counterparts in the government such as the Malaysian Investment Development Authority (MIDA), the Kuala Lumpur City Hall and Ministry of International Trade and Industry (MITI). As at end-2017, Invest KL has attracted 73 MNCs with investment commitment of over RM11 billion and almost 11,000 jobs created[2].

Similar successes were recorded across the prioritised sectors, from resource-based industries to services sector, thanks to the robust and effective governance structure that was put in place.

Delivery Units Deliver

First established in the UK as the Prime Minister’s Delivery Unit (PMDU) in 2001, the delivery unit model was emulated in Malaysia (PEMANDU – Performance Management and Delivery Unit) as well as Chile, Albania, Romania and Indonesia under different monikers at the national level. Conceptually, it is a discrete unit at the centre of government with a mandate to improve citizen and economic outcomes and improve oversight on government effectiveness and efficiency[3].

In engaging key stakeholders to establish priorities, delivery units provide clarity to investors, both foreign and domestic, on sectors that will receive support in terms of resources and attention. This greatly helps them in making their final investment decisions. In addition, by proactively facilitating the implementation process, the investment hits the ground much faster, which also translates into earlier return on their investment.

The delivery unit model shares many features of the Problem-Driven Iterative Adaptation (PDIA) approach which hinges on trying, learning, iterating and adapting[4]. It promotes active experiential and experimental learning with evidence-driven feedback built into regular management that allows for real-time adaptation.

In the case of Malaysia, the economy flourished and investment gushed in with the introduction of the National Transformation Programme that was launched in 2010 and overseen by PEMANDU. The growth rate of realised investments almost doubled following the establishment of the delivery unit. Additionally, the share of private investment increased to 68% in 2017 compared to 52% in 2009 prior to the formation of the delivery unit.

The investment levels achieved contributed to Malaysia’s growth with GDP consistently in the range of 4% to 6% since 2009, and the gap towards the World Bank’s high income threshold in terms of GNI narrowed from 33% in 2010 to 20% in 2017. Malaysia ranked 24th in World Bank’s Doing Business Report (2018), retaining its spot among the world’s top 25 economies on the Doing Business measures.

While the outcomes of the delivery unit model vary from country to country, and even from area to area, it undoubtedly assists governments in prioritising the ‘whats’ and further improving the effectiveness  of processes to get things done.

From the case of Malaysia, the answer to the rhetorical headline question is firmly in the affirmative.

[1] http://www.investkl.gov.my/assets/multimediaMS/file/InvestKL-Performance-Report-2017.pdf

[2] https://harvardmagazine.com/2010/03/complexity-and-wealth-of-nations

[3] http://documents.worldbank.org/curated/en/318041492513503891/Driving-performance-from-the-center-Malaysia-s-experience-with-PEMANDU

[4] https://www.oecd.org/dac/accountable-effective-institutions/Governance%20Notebook%202.3%20Andrews%20et%20al.pdf

Nestled in an idyllic suburb of Kuala Lumpur bustles an entrepreneur with an amazing zest for life, hope and personal dreams. An ex-banker by profession, Joe Zainul had a desire he knew his 9-to-5 job would never fulfil. Despite working for five years with a global banking group, he continued to feel a pull towards a thought he once had when travelling in Australia – to headline at the Sydney Opera House.

“I knew when I was all suited up for my banking job upon my return to Malaysia, my desire was distilled from my time in Australia. After spending the early part of my working life in public relations and advertising, I set off for Australia to help my sister with her food truck business in Darwin,” says Joe.

There, he took the opportunity to visit the Sydney Opera House, spurred by a childhood interest in opera. Even though he never got the chance to take music lessons, he was always drawn to operatic singing and admired Luciano Pavarotti. Being at the world-famous performing arts centre awakened a new desire in himself – to sing at the Sydney Opera House.

In the meantime, it was back to reality for him after his stint in Australia. Upon his homecoming, he settled into his life as a banker. However, in time he could no longer deny his longing to pursue a career in opera. Determined to turn his dream into a reality, he set off to the Malaysian Institute of Arts (MIA) to enquire about their classical music programmes.

He found that the art school offered a two-and-a-half-year diploma programme in music, and that he could major in classical voice and minor in classical piano. Realising that he could equip himself with the tools needed to become a singer on one of the world’s biggest stages further fanned the flames of his dream.

However, there was a catch. The MIA required prospective students to have a minimum Grade 5 qualification from ABRSM, the internationally-recognised musical education body from the UK. Yet, Joe was determined not to let his lack of music training deter him. He succeeded in winning over the MIA’s Head of Department and voice teacher with his vocal audition alone, earning a place in its diploma programme.

Thus, he left his banking career behind and spent his days playing catch-up to his new MIA classmates, who were also 10 years younger than him. As he had no foundation in music theory, he would spend hours at a time receiving personal coaching from his instructors to shore up his musical knowledge. Within one year and while pursuing his diploma from MIA, he was able to sit for and pass the Grade 5 ABRSM exam, a qualification which usually takes five years to achieve.

As he was completing his diploma programme, Joe then auditioned for the Royal Birmingham Conservatoire, one of the UK’s prestigious music and drama schools and concert venues. Starting off with a one-year post-graduate certificate, Joe continued to apply himself to his craft and finished with a Master’s in Music (Vocal Performance) on a scholarship from the Conservatoire.

With his music qualifications under his belt, he found himself frustrated upon his return to Malaysia, however. This was as the classical music scene remains undeveloped and limited to a select group of singers. This inspired him to take matters into his own hands and create his own platform to perform and put his musical training into practice. In early 2017, he opened the doors of biJÖEx, a semi-fine dining restaurant in Kuala Lumpur. In addition to running the restaurant, on weekends Joe can be found belting out popular tunes for his patrons.

With biJÖEx gaining a strong following with the lunch and weekend crowd, 18 months into this venture Joe is already expanding. In August 2018, he launched biJÖEx Café, which will also have a musical spin. He plans to invite buskers to perform at the outlet and help them earn a living, which he also sees as his way of giving back to his community.

But don’t be fooled. Joe remains dedicated to realising his dream of taking the stage at the Sydney Opera House. In fact, he already has plans to audition for as many performances as he can on the regional circuit where he believes there is greater opportunity for opera singers to gain exposure.

“When I took that trip to the Sydney Opera House and told myself I would return to sing there, I was dreaming big. I feel that if your dream does not scare you, it is not big enough. That dream frightens me to this day, but it’s something I’ve told myself I want to do, so I’m keeping my fingers crossed.”

To Joe, his transformation journey probably awaits on the mammoth stage of the Sydney Opera House. Little does he know, however, that his undying passion has already resulted not only in his personal transformation, but more profoundly, that of the aspiring musicians who have found a voice through him. Joe is an example of how a burning desire to transform can overflow to transform the lives of others if we pursue it relentlessly. And looking at his persistence thus far, it doesn’t seem like he plans to quit anytime soon.

In conjunction with the musical theme of this article, we at PEMANDU Associates pay tribute to Aretha Franklin who passed away on 16 August 2018. She was an icon for music and women empowerment who inspired us with her talent and passion.

Reminding us that we could all use a little respect, we leave you with a quote from the Queen of Soul:  “I was asked what recording of mine I’d put in a time capsule, and it was ‘Respect.’ Because people want respect — even small children, even babies. As people, we deserve respect from one another.”

By Dr. Sarinder Kumari & Dhanendra Sivarajah

Agriculture quality standards have become imperative not only to ensure safe and quality products but also for farmers to access international markets.

A highlighted by the World Trade Organisation (WTO) and academicians, tariff barriers have been replaced by sustainable requirements for market access as a means of protecting domestic  producers. Understanding the requirements of the importing country and ensuring these elements are incorporated and harmonised with the standards of the importing countries is key as defined by the WTO Technical Barriers to Trade, an agreement which strongly encourages members to base their measures on international standards as a means to facilitate trade. Hence, it is essential for Malaysian farmers to practice Good Agriculture Practices that are aligned with international standards to access these markets.

These standards were introduced in accordance with Malaysian Standards that define processes in resource management for good and sustainable agriculture production which improve farm productivity and ensure produce is safe and of quality, with the welfare and safety of workers taken into account.

Spearheading a new approach to standards adoption

However, the introduction of the local standards brought on a different set of challenges.  Among those highlighted by the farmers were limited market access, insufficient capacity building programmes to assist in compliance to standards, as well as questions from the importing countries on the standards applied.  The value of certification was also questioned by farmers who saw the exercise as adding more work to an already laborious industry. Consequently, farmers were selling to middle-men, often at a minimal price, who were able to stretch their own profit margins through with their ability to penetrate the hypermarkets and as well as the export market.

To overcome these challenges, a mini-lab facilitated by PEMANDU Associates (during its time as a Delivery Unit in the Prime Minister’s Department) in collaboration with the Ministry of Agriculture was held, involving farmers associations and other relevant agencies.  It was decided in the mini-lab that a rebranding of all three schemes under a single brand name was to be introduced to create a brand name that is easily recognised in the foreign market – this standard would also be harmonised with all other good agricultural practices used by other countries for the export market.

Thus, a series of focus group meetings chaired by the Undersecretary of the MOA as well sessions with the then-Minister of Agriculture, led to the birth of the Malaysian Good Agricultural Practices (myGAP) in 28 August 2013. Since then, myGAP has become known internationally and is synonymous with other standards such as GlobalGAP, JGAP (Japanese certification) and China GAP (China certification), to name a few. 

Further to this, the MOA and its respective agencies also stepped up efforts in educating the public on the importance of certification to ensure sustainability, quality and lastly to also allow for market access, with the respective departments aggressively involved in promoting myGAP in their bilateral talks for market access.  All main initiatives and sub-initiatives had individuals accountable for its implementation who were able to provide regular and comprehensive progress reporting.

Breathing new life into Malaysian produce

After the launch of the myGAP Certification and its brand promise of “Producing More, Improving Lives”, the MOA continued to work with various stakeholders to not only educate the farmers about the need and benefits of myGAP, but also encourage them to look beyond just farming but towards creating a safe and sustainable community.  In an effort to further enhance the standards usage among farmers, MOA also allocated funds to assist farmers in upgrading their storage, sewage, collection, and other facilities that are requirements under the myGAP certification programme. Besides funding assistance, farmers also benefited from capacity-building programmes, awareness and promotion programmes.

The capacity-building programmes involved educating the farmers on the requirements of myGAP and its importance, which was then followed by assistance in completing the checklist in preparation for compliance and audit. This effort encouraged strong participation from farmers who were keen to understand the certification process.

Mr. M. Kaliyannan, who puts his customers at the top of his priority, has adopted myGAP in his 39-hectare watermelon farm to ensure higher standards of quality and safety for his crops. With myGAP, he has been able to widen his market for Grade A watermelons to foreign markets such as Dubai and Hong Kong. His revenue has increased more than 20% when compared to before myGAP.

“Under myGAP, there are many practical steps to follow including staff training, usage of pesticides, safety, and best practices for planters. I’ve seen many positive results since the adoption of myGAP.

“My ambition is to be the king of watermelon in Malaysia by exporting my entire Grade A products to the rest of the world. The myGAP programme is a good initiative, especially to assist us in the agriculture sector shared. I would definitely continue to encourage other farmers to follow my steps so that they can be successful as well,” he says.

Beyond addressing the supply side, the MOA also worked with hypermarkets in running awareness campaigns and promoting certified produce to encourage consumers to demand for produce that are certified. This has resulted in benefits for farmers by leveraging hypermarkets as a means of directly accessing the customer and avoiding the middle-man, and MOA’s efforts in increasing the number of certified farms in Malaysia.

Giving farmers a leg up into foreign markets

In 2017, with the introduction of myGAP, the cumulative number of farms certified with myGAP increased by 451% from 1,378 farms in 2011 to 6,226 farms in 2017, as more countries require the certification for the export of fruits and vegetables. Brunei become the most recent adopter of the certification, starting in January 2018. There was also an increase in the number of livestock farms were certified by the Department of Veterinary Services, as China, a major market for edible birds’ nest, started making it mandatory for bird’s nest imports from swiftlet farms to be myGAP certified, further proving that adopting international standards does help secure local exporters’ market penetration.

To further strengthen the transition to a globally accepted standard, the Ministry included routinely monitored KPIs that trigger problem-solving sessions which allow for effective intervention. The result of the effort is felt by the operators, as demonstrated by the following feedback received in a survey commissioned by Standards Malaysia back in 2014:

Farmers acknowledged that myGAP propagates prudent and economical administration of chemical fertilisers, which in turn helps check/control pest infestation, contributing to increased yield and reducing cost.

The feedback obtained from the farming community shows that while the process of converting from a local to a global standard does come with a learning curve and temporary pain points, the benefit of securing market access and improving profits is well worth the investment. The transformation to the global standard was made possible by bringing the public and the private sector together to problem-solve anticipated issues for the conversion, and relentlessly monitoring the work toward a common purpose.

“Before I adopted myGAP, I had to spend about RM16,000 on chemical fertilizers, but after the adoption, I was able to save money because I only spent RM2.000 by using the Sri Product via the Natural Farming concept. Now, I am using 70% of Sri Products and 30% chemical fertilisers. With myGAP, I am able to sell my rice for RM6.00/kg compared to before when it was only RM2.00. I have also sold rice seeds to Sendi Enterprise for RM1,350/tonne and sold rice at RM1,200/tonne to Bernas.” – Abdul Razak Chik, better known as ‘Pak Lang Sri’, who owns a paddy farm in Sekinchan, Selangor.

Our BFR Untold series sets out to uncover what really goes on behind the transformational projects delivered by PEMANDU Associates. This month, we chat to Johanna Ho, Vice President at PEMANDU Associates, about her experience working on Tanzania’s BIG RESULTS Now! programme.

https://www.youtube.com/watch?v=qsjAlQCBg4c