MATRADE To Manage RM150 million PSE Fund

The local professional services sector is expected to benefit immensely from the new Professional Services Export (PSE) Fund, which was launched by the Malaysian Government under the Ninth Malaysian Plan (RMK9). Through the PSE Fund, a total of RM150 million in funds have been allocated to assist the professional services sector to become more export oriented – further underlying the Government’s commitment towards this sector.

The PSE Fund is seen by many as a key initiative to encourage the export of professional services and strengthen the presence of the Malaysian professional services sector in the global arena. But above all, the Fund is poised to enhance Malaysia as a competitive and dependable supplier of professional services.

At a glance, the Fund’s main objectives are:
– To encourage Malaysian professional services providers to bid for overseas projects.
– To expand the exports of professional services, through enhancing visibility and increasing awareness of
the expertise of Malaysian professional services providers in the global market.
– To brand the Malaysian professional services industry as internationally competitive, competent and reliable.
– To gather market intelligence through feasibility and related studies, assist Malaysian companies in their
bids for overseas projects as well as create new markets for Malaysian technologies and products.

The PSE Fund falls under the purview of the Ministry of International Trade and Industry (MITI) and is managed by the Malaysia External Trade Development Corporation (MATRADE). In her speech during the launch of the Fund, Datuk Seri Rafidah Aziz, Minister of MITI, emphasised that the specific purpose of the Fund is to extend the global outreach of Malaysian professional services providers.

The introduction of this Fund is also in line with the objectives of the RMK9 and Third Industrial Masterplan (IMP3) which is to boost the contribution of the non-government services sector in the economy. Non-Governmental services accounted for 50.5% of the country’s Gross Domestic Product (GDP) in 2005. Under the IMP3, the sector is expected to grow at a rate of 7.5% over the next 15 years, to reach 59.7 per cent of the GDP by 2020.

Datuk Seri Rafidah Aziz also said that the projections are certainly achievable given the comprehensive strategies and policy measures that are in place to promote growth in the following eight targeted services sub-sectors as identified in the IMP3:

(1) Business and professional services (5) Construction services
(2) Integrated logistics services (6) Education and training
(3) ICT services (7) Health services
(4) Distributive trade (8) Tourism services

The Malaysian professional services providers that stand to benefit include accountants, auditors, architects, agriculturists, banking & finance professionals, economists, engineers, IT consultants, surveyors, lawyers, management consultants and medical & healthcare professionals.

Mechanics of the PSE Fund
The PSE Fund provides grants to professional services providers to meet the costs of preparing and submitting tender bids for eligible overseas projects. Grants secured from the PSE Fund are not for the purposes of carrying out / implementing the project.

There are 2 types of grants: 
a. A Matching Grant is offered to Malaysian professional services providers to meet 50% of the costs of preparing and submitting tender bids for eligible project studies. These include feasibility studies, privatisation studies and studies relating to project formulation and project management.

b. A Conditional Grant is offered to meet 50% of the costs incurred by Malaysian professional services providers for tender bids relating to the preparation and submission of tender bids for ‘Design’, ‘Design-Build’, ‘Design-Build-Operate’ and ‘Design-Build-Operate-Maintain’ projects.

These projects generally involve Malaysian professionals being engaged by an entrepreneur or contractor, the principal, bidding for a particular project. In such a case, Malaysian professional services providers applying for a Conditional Grant must provide a copy of an agreement with the principal or other documentary evidence to support their grant applications. The award of this grant is subject to the condition that reimbursement of the approved grant expenditure items by the PSE Fund can only be made in the event of the principal not winning the tender bid.

The difference in the grants is to cater to the wide scope and nature of international projects. Grants could be secured to support a Malaysian firm or a consortium representing a number of Malaysians in a single bid.

Future Opportunities
Apart from enhancing the chances of success for Malaysian professional services providers in the bidding process for overseas projects, the PSE Fund would also serve as a catalyst to generate significant increase in the export of Malaysian goods and services, especially in new emerging markets. Establishing and enhancing long-term relationships and vital contacts with their local counterparts could create new avenues for Malaysian exports.

Companies participating in foreign tenders through the assistance of the Fund could provide timely market intelligence to assist already exporting Malaysian companies with their bids for overseas projects and/or those seeking to export their services overseas.

It is hoped that those who take advantage of the PSE Fund would further strengthen the already good reputation of Malaysian professional services providers in various targeted countries in ASEAN and OIC. The PSE Fund would also serve to assist in positioning Malaysia’s professional services and downstream activities as the preferred choice by the host country, if the development project goes forward.

matrade_logoUltimately, the country is likely to benefit from the Fund as the multiplier benefits and the forward linkages
generated by the Fund are likely to have a positive impact on the economy.

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