There’s an air of cautious optimism in Malaysia. GDP of 6 per cent in 2014 may have slowed to under 5 per cent in 2015 because of lower-than-expected oil revenues, but still the World Bank’s Report on Doing Business 2014 placed Malaysia 18th for ease of doing business among 183 economies.
And it’s clear that the nation’s capital is expanding. Arriving in Kuala Lumpur after a three-year absence, this dual sense of a slight setback combined with forward momentum is obvious. The positive aspect first: it’s immediately noticeable how the infrastructure has improved.
Kuala Lumpur International Airport (KLIA) is the third-busiest airport in ASEAN by international cargo traffic, and the fourth-busiest by international passenger traffic.
It is efficient and clean, with plenty of natural light, and there’s a rapid monorail that takes you from satellite terminal A to the main terminal and immigration. If there’s one disadvantage to the airport, it is how far it is from the centre of KL. However, the KLIA Ekspres (sic) service, built in 2002 and now extended to connect the new (2014) KLIA 2 budget terminal, gives all passengers the same quick journey – 28 minutes from KLIA main terminal – into the centre of town, with free wifi onboard.
My lasting memory from previous visits to Kuala Lumpur centred around its heavy traffic and the near impossibility of reaching appointments on time. In the rush hour, it can sometimes seem that the entire population – pushing two million when the offices disgorge their commuters – is in a traffic jam, and this is made worse by the construction work taking place to implement what hopefully will act as a partial solution – a new Mass Rapid Transit (MRT) rail system of, initially, 31 stops on Line 1, and a further 56 stops for Line 2 (Line 3 awaits a formal announcement).
In the meantime, the best advice for getting around town is to use the various rail options – after the airport link, I tried the monorail and the light rail system and found them infinitely better than relying on taxis.
When I did get in a taxi, the long delays meant interesting chats with the drivers as we sat in stationary traffic and watched mopeds speed past. This ability to interact with foreigners is just one of Malaysia’s strengths. Locals speak Malay, English, and then, depending on their origin, perhaps Hindi or Tamil, or Mandarin.
For the UK, this is a particular advantage, as pointed out by Tony Collingridge, director of UK Trade & Investment in Malaysia.
“It’s not just an ability to speak English. There are now 60,000 people in Malaysia studying British educational qualifications, the highest anywhere in the world outside the UK,” he says. “There are 16,000 Malaysians in the UK, there are five UK university campuses here, and 80 UK educational establishments with a presence here.”
Collingridge sees this as a wider attraction of the city for business. “Malaysia is a Commonwealth country with huge historic ties with the UK. The educational, legal and government system are very similar and familiar, which means that companies can come to Malaysia and do business in a way that they understand. And that is not the case in other markets in Asia,” he says.
That well educated population is also welcoming to foreign companies, according to Tim Saw, InvestKL’s director of communications.
“There are several initiatives for attracting businesses because it is seen as a way of employing and training up Malaysians,” he says, citing the ease of obtaining work permits as one concrete example.
In addition, while corporate tax rates can be as high as 25 per cent, various incentives can push this as low as 5 per cent, or even zero, depending on whether companies are setting up a regional hub.
Returning to KL you will also notice the skyscrapers – many 60 storeys-plus – springing up all over the city to cater in part for these companies, encouraged by Kuala Lumpur’s mayor Ahmad Phesal Talib, who describes them as “Towers of Excellence”. The most famous of these, the twin Petronas Towers, provide an excellent vantage point for checking out the new towers.
They are on every tourist’s itinerary, but booking an online ticket ensures queuing is kept to a minimum, and the experience also gives a good sense of KL’s organisation, both on a micro and macro scale. The micro part comes in the organisation of it all as you are shepherded from one place to the next, along with school groups and tourists.
The macro part is clear both at the 41st floor sky deck connecting the two towers – a good vantage point to check out the solar panels helping to power the Suria KLCC shopping centre and Philharmonic Hall below – and higher still on the 86th floor observation deck, from which the park surrounding the towers can be seen most clearly, a feature set to continue with new construction as developers are required to set aside 10 per cent of land for green space.
The infrastructure works aren’t all high-rise, however. Kuala Lumpur takes its name from being at the confluence of two rivers, the Gombak and the Klang, and these are gradually being rehabilitated, not least through the River of Life project, which is opening up cycle tracks and paths alongside the rivers in the centre of town.
Malaysia is big on planning, and in May, Prime Minister Najib Razak unveiled the latest five-year economic development plan with the intention of Malaysia achieving developed economy status by 2020. The 11th Malaysia Plan (11MP), which is the final one in the lead-up to the 2020 goal, includes updated forecasts for the country’s economy and its finances, as well as new infrastructure projects.
The most anticipated new project is the US$11 billion, 340km Kuala Lumpur to Singapore fast rail link, with seven stops in the country. It’s certainly not going to be an easy proposition, not least because the airlines flying between the two cities aren’t keen on seeing their traffic disappear.
Civil Aviation Authority of Singapore figures show air traffic between the two countries as 7,500 people leaving Singapore for Malaysia daily, the majority of whom are heading for KL. That doesn’t include other crossing points – a fast drive can take you there in less than five hours and traffic between both countries through the Causeway and Second Link is estimated at 400,000 crossings both ways daily.
But with a proposed time of 90 minutes, the rail link would clearly open up all sorts of opportunities, and not just for people looking to take advantage of the wage rates in Singapore, which are some 250
per cent higher than in Kuala Lumpur. And then there’s the large matter of freight.
Collingridge says that KL is an inexpensive place for companies to set up operations, but Malaysia is more about the skills it can offer.
“A lot of electronic businesses that first went to China have come here. China may be cheaper in the middle and the north there, but the logistics of that means it’s not viable. If you want value-added electronics, then Malaysia is the place. All of Dyson’s global production comes out of here, for instance,” he says. “This is a regional centre, so if you want China you go to China, but if you are looking at elsewhere in the region, then Malaysia has a very good sell.”
InvestKL has had successes in encouraging multinational corporations to relocate to Malaysia, says Tim Saw, including Japanese engineering and electronics conglomerate Hitachi Systems, Germany’s industrial gases and engineering company Linde, British business services group Rentokil Initial, Zurich Insurance, US food giant Cargill and the world’s largest oilfield service company, Schlumberger.
“Business speaks with its feet,” says Collingridge. “If it likes what it sees, it comes in. If not, it goes somewhere else. Dyson and British Telecom have both increased their size in the past two or three years, and also the Weir Group [engineering] and Petrofac [oilfield services].”
The aim for the government is to get the whole population earning at least US$15,000 each a year by 2020, and in Kuala Lumpur that average has probably been achieved, but the greater KL region of more than seven million still has a way to go – and the population of the country as a whole is 30 million. In the meantime, the government has continued moves to reform the tax base and introduce a general sales tax of 6 per cent.
Tourism plays an important part in that. YTL Hotels owns some 20 properties across Malaysia including the Majestic Hotel, dating from 1932 and close to the historic centre. The company is part of the larger Malaysian conglomerate YTL, which has interests in everything from utilities to rail, and built the KLIA Ekspres out to the airport. Chief executive of the Hotels Division, Mark Yeoh, says the country is doing well at attracting both business and leisure visitors, and that repeat visits are high.
Accommodation prices in KL are a significant attraction, with the city coming in at 115th in Mercer’s Cost of Living Survey 2014, well below city-state Singapore and Hong Kong, which ranked fourth and third, respectively.
Confidence in KL also comes from new services into the city. Despite the well-publicised troubles of the national carrier, the new Malaysia Airlines chief executive, Christoph Mueller, confirmed that the route between Kuala Lumpur and London is considered a “flagship route”, adding that the carrier is committed to retaining the double daily superjumbo A380 service.
In June this year, British Airways re-established a daily service from London Heathrow to Kuala Lumpur. And it’s not just British Airways increasing services. The Middle East carriers also have frequent services, and Etihad Airways signed a global partnership agreement with Tourism Malaysia to boost inbound tourism to the country, establishing joint marketing activities targeting Malaysia’s leading inbound visitor markets, including Europe – particularly the UK, Germany, France and Italy – the US, and of course the Middle East (UAE, Saudi Arabia, Egypt, Oman, Bahrain, Qatar and Kuwait).
Research by Tourism Malaysia revealed that in 2014 there were more than 1.2 million visits from these key markets, a 10 per cent increase compared to 2013.
Andrew Ward, vice president of marketing at Etihad Airways, says that Etihad has carried more than one million passengers to and from the country since 2007. It now flies twice daily between its hub in Abu Dhabi and KL, with onward flights code-sharing with Malaysia Airlines (soon to be rebranded) onto holiday destinations such as Langkawi and Penang, Johor Bahru and Borneo-Sabah.
Chong Yoke Har, deputy director general (planning) at Tourism Malaysia, says that the Etihad Airways agreement will help Malaysia achieve its strategic goal of earning MYR168 billion (US$45 billion) from the targeted 36 million tourist arrivals by 2020. Combined with the aim of attracting multi-national companies, it seems KL has a plan it is in the middle of executing.
“It takes only four to six hours to reach key Asian business centres such as Hong Kong, Shanghai and Tokyo,” says Zainal Amanshah, chief executive of InvestKL. “And the new high-speed railroad will connect Greater Kuala Lumpur to Singapore in 90 minutes.”
He adds that greater Kuala Lumpur is fast becoming the regional financial centre in ASEAN. ‘‘Many local and foreign banks have regional headquarters in the city, which provides multinational companies with greater flexibility in financing and international trade.”
Of course, Malaysia isn’t alone in this intense central planning – its neighbour, Singapore, has achieved its remarkable success in much the same way.
Time will tell if it’s a strategy that also works for Malaysia. But all the signs are there that KL is fast becoming a place to watch.
Kuala Lumpur International Airport (KLIA) is the third-busiest airport in ASEAN by international cargo traffic, and the fourth-busiest by international passenger traffic.
It is efficient and clean, with plenty of natural light, and there’s a rapid monorail that takes you from satellite terminal A to the main terminal and immigration. If there’s one disadvantage to the airport, it is how far it is from the centre of KL. However, the KLIA Ekspres (sic) service, built in 2002 and now extended to connect the new (2014) KLIA 2 budget terminal, gives all passengers the same quick journey – 28 minutes from KLIA main terminal – into the centre of town, with free wifi onboard.
My lasting memory from previous visits to Kuala Lumpur centred around its heavy traffic and the near impossibility of reaching appointments on time. In the rush hour, it can sometimes seem that the entire population – pushing two million when the offices disgorge their commuters – is in a traffic jam, and this is made worse by the construction work taking place to implement what hopefully will act as a partial solution – a new Mass Rapid Transit (MRT) rail system of, initially, 31 stops on Line 1, and a further 56 stops for Line 2 (Line 3 awaits a formal announcement).
In the meantime, the best advice for getting around town is to use the various rail options – after the airport link, I tried the monorail and the light rail system and found them infinitely better than relying on taxis.
When I did get in a taxi, the long delays meant interesting chats with the drivers as we sat in stationary traffic and watched mopeds speed past. This ability to interact with foreigners is just one of Malaysia’s strengths. Locals speak Malay, English, and then, depending on their origin, perhaps Hindi or Tamil, or Mandarin.
For the UK, this is a particular advantage, as pointed out by Tony Collingridge, director of UK Trade & Investment in Malaysia.
“It’s not just an ability to speak English. There are now 60,000 people in Malaysia studying British educational qualifications, the highest anywhere in the world outside the UK,” he says. “There are 16,000 Malaysians in the UK, there are five UK university campuses here, and 80 UK educational establishments with a presence here.”
Collingridge sees this as a wider attraction of the city for business. “Malaysia is a Commonwealth country with huge historic ties with the UK. The educational, legal and government system are very similar and familiar, which means that companies can come to Malaysia and do business in a way that they understand. And that is not the case in other markets in Asia,” he says.
That well educated population is also welcoming to foreign companies, according to Tim Saw, InvestKL’s director of communications.
“There are several initiatives for attracting businesses because it is seen as a way of employing and training up Malaysians,” he says, citing the ease of obtaining work permits as one concrete example.
In addition, while corporate tax rates can be as high as 25 per cent, various incentives can push this as low as 5 per cent, or even zero, depending on whether companies are setting up a regional hub.
Returning to KL you will also notice the skyscrapers – many 60 storeys-plus – springing up all over the city to cater in part for these companies, encouraged by Kuala Lumpur’s mayor Ahmad Phesal Talib, who describes them as “Towers of Excellence”. The most famous of these, the twin Petronas Towers, provide an excellent vantage point for checking out the new towers.
They are on every tourist’s itinerary, but booking an online ticket ensures queuing is kept to a minimum, and the experience also gives a good sense of KL’s organisation, both on a micro and macro scale. The micro part comes in the organisation of it all as you are shepherded from one place to the next, along with school groups and tourists.
The macro part is clear both at the 41st floor sky deck connecting the two towers – a good vantage point to check out the solar panels helping to power the Suria KLCC shopping centre and Philharmonic Hall below – and higher still on the 86th floor observation deck, from which the park surrounding the towers can be seen most clearly, a feature set to continue with new construction as developers are required to set aside 10 per cent of land for green space.
The infrastructure works aren’t all high-rise, however. Kuala Lumpur takes its name from being at the confluence of two rivers, the Gombak and the Klang, and these are gradually being rehabilitated, not least through the River of Life project, which is opening up cycle tracks and paths alongside the rivers in the centre of town.
Malaysia is big on planning, and in May, Prime Minister Najib Razak unveiled the latest five-year economic development plan with the intention of Malaysia achieving developed economy status by 2020. The 11th Malaysia Plan (11MP), which is the final one in the lead-up to the 2020 goal, includes updated forecasts for the country’s economy and its finances, as well as new infrastructure projects.
The most anticipated new project is the US$11 billion, 340km Kuala Lumpur to Singapore fast rail link, with seven stops in the country. It’s certainly not going to be an easy proposition, not least because the airlines flying between the two cities aren’t keen on seeing their traffic disappear.
Civil Aviation Authority of Singapore figures show air traffic between the two countries as 7,500 people leaving Singapore for Malaysia daily, the majority of whom are heading for KL. That doesn’t include other crossing points – a fast drive can take you there in less than five hours and traffic between both countries through the Causeway and Second Link is estimated at 400,000 crossings both ways daily.
But with a proposed time of 90 minutes, the rail link would clearly open up all sorts of opportunities, and not just for people looking to take advantage of the wage rates in Singapore, which are some 250
per cent higher than in Kuala Lumpur. And then there’s the large matter of freight.
Collingridge says that KL is an inexpensive place for companies to set up operations, but Malaysia is more about the skills it can offer.
“A lot of electronic businesses that first went to China have come here. China may be cheaper in the middle and the north there, but the logistics of that means it’s not viable. If you want value-added electronics, then Malaysia is the place. All of Dyson’s global production comes out of here, for instance,” he says. “This is a regional centre, so if you want China you go to China, but if you are looking at elsewhere in the region, then Malaysia has a very good sell.”
InvestKL has had successes in encouraging multinational corporations to relocate to Malaysia, says Tim Saw, including Japanese engineering and electronics conglomerate Hitachi Systems, Germany’s industrial gases and engineering company Linde, British business services group Rentokil Initial, Zurich Insurance, US food giant Cargill and the world’s largest oilfield service company, Schlumberger.
“Business speaks with its feet,” says Collingridge. “If it likes what it sees, it comes in. If not, it goes somewhere else. Dyson and British Telecom have both increased their size in the past two or three years, and also the Weir Group [engineering] and Petrofac [oilfield services].”
The aim for the government is to get the whole population earning at least US$15,000 each a year by 2020, and in Kuala Lumpur that average has probably been achieved, but the greater KL region of more than seven million still has a way to go – and the population of the country as a whole is 30 million. In the meantime, the government has continued moves to reform the tax base and introduce a general sales tax of 6 per cent.
Tourism plays an important part in that. YTL Hotels owns some 20 properties across Malaysia including the Majestic Hotel, dating from 1932 and close to the historic centre. The company is part of the larger Malaysian conglomerate YTL, which has interests in everything from utilities to rail, and built the KLIA Ekspres out to the airport. Chief executive of the Hotels Division, Mark Yeoh, says the country is doing well at attracting both business and leisure visitors, and that repeat visits are high.
Accommodation prices in KL are a significant attraction, with the city coming in at 115th in Mercer’s Cost of Living Survey 2014, well below city-state Singapore and Hong Kong, which ranked fourth and third, respectively.
Confidence in KL also comes from new services into the city. Despite the well-publicised troubles of the national carrier, the new Malaysia Airlines chief executive, Christoph Mueller, confirmed that the route between Kuala Lumpur and London is considered a “flagship route”, adding that the carrier is committed to retaining the double daily superjumbo A380 service.
In June this year, British Airways re-established a daily service from London Heathrow to Kuala Lumpur. And it’s not just British Airways increasing services. The Middle East carriers also have frequent services, and Etihad Airways signed a global partnership agreement with Tourism Malaysia to boost inbound tourism to the country, establishing joint marketing activities targeting Malaysia’s leading inbound visitor markets, including Europe – particularly the UK, Germany, France and Italy – the US, and of course the Middle East (UAE, Saudi Arabia, Egypt, Oman, Bahrain, Qatar and Kuwait).
Research by Tourism Malaysia revealed that in 2014 there were more than 1.2 million visits from these key markets, a 10 per cent increase compared to 2013.
Andrew Ward, vice president of marketing at Etihad Airways, says that Etihad has carried more than one million passengers to and from the country since 2007. It now flies twice daily between its hub in Abu Dhabi and KL, with onward flights code-sharing with Malaysia Airlines (soon to be rebranded) onto holiday destinations such as Langkawi and Penang, Johor Bahru and Borneo-Sabah.
Chong Yoke Har, deputy director general (planning) at Tourism Malaysia, says that the Etihad Airways agreement will help Malaysia achieve its strategic goal of earning MYR168 billion (US$45 billion) from the targeted 36 million tourist arrivals by 2020. Combined with the aim of attracting multi-national companies, it seems KL has a plan it is in the middle of executing.
“It takes only four to six hours to reach key Asian business centres such as Hong Kong, Shanghai and Tokyo,” says Zainal Amanshah, chief executive of InvestKL. “And the new high-speed railroad will connect Greater Kuala Lumpur to Singapore in 90 minutes.”
He adds that greater Kuala Lumpur is fast becoming the regional financial centre in ASEAN. ‘‘Many local and foreign banks have regional headquarters in the city, which provides multinational companies with greater flexibility in financing and international trade.”
Of course, Malaysia isn’t alone in this intense central planning – its neighbour, Singapore, has achieved its remarkable success in much the same way.
Time will tell if it’s a strategy that also works for Malaysia. But all the signs are there that KL is fast becoming a place to watch. 
