Towards the Furthering of Export Promotion and
Industrial Development of Egypt
—Looking at Japan’s Experiences
Keynote speech by Osamu Watanabe, Chairman and CEO of JETRO
at the Management Development Center, Cairo, Egypt
on June 16th, 2004
1. Introduction
Your Excellencies honorable Prime Minister Ebeid, Foreign Trade Minister Dr.
Boutros-Ghali—and the dearest people of Egypt—it is a great honor and privilege for me
to pay this my first visit to Egypt, a country I have long wished to visit. I would also like to
offer my sincere gratitude to Prime Minister Ebeid for extending an invitation to visit this
beautiful and historic land. I have to admit that, despite a lifetime spent in public
service—and my current position as Chairman and CEO of the Japan External Trade
Organization (JETRO)—this trip represents my first visit not only to Egypt but to the
Middle East as well. Thus, it is with a mixture of excitement and pleasure that I begin my
first Middle East visit here in the land of the Pharaohs.
Encounter between Japan and Egypt 140 Years Ago
The relationship between Japan and Egypt has a fairly long history, dating back to the
Edo Period when Japan was still a country of “Samurai” warriors. The Tokugawa
Shogunate had been keeping the country in isolation for over 250 years, when
Commodore Perry’s black ships arrived from America in 1853 and strongly urged the
Shogunate to open the country. This event stirred up fierce controversy, splitting public
opinion in two and, after a period of civil war, led to the restoration of imperial power—the
Meiji Restoration, which marked the beginning of modern Japan. And it was in 1864,
amid this turbulence, that the Tokugawa Shogunate dispatched an envoy to France,
which paid a visit to Egypt before reaching its final destination. The envoy of 34 people
visited the Pyramids of Giza and the Sphinx. A picture of the envoy, taken in front of the
Sphinx, still remains; the group, all clad in Samurai attire, carried Japanese swords and
wore their hair in top knots (just like the sumo wrestlers). I cannot help but being moved
when I look at the picture which, to me, symbolizes the dawn of Japan. More than 140
years later, I am somewhat traveling in the footsteps of that first envoy, who helped pave
the way for modern Japan, as I too experienced the thrill and emotion of visiting Giza for
the first time the other day. I was overwhelmed by the immense history staring out from
the area’s massive stone monuments.
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Looking to the 21st century, Egypt has been working to give new direction and force to its
export promotion activities, as seen in the complete reorganization of the Export
Promotion Center, which will be re-established in early July as the Egyptian Center for
Export Development (ECED). It is a great honor and pleasure that I have been given
this opportunity to share with you the experiences of Japan and JETRO, which has a
long history in the area of export promotion.
Japan’s Initiatives in a Turbulent Middle East
Egypt is universally recognized as a leader among Arab states, with Cairo playing host to
the Arab League headquarters. This leadership role is not made easy with the
turbulence and unease currently facing the Middle East.
After my visit to Egypt, I will travel to Jordan and the United Arab Emirates. I am very
much looking forward to seeing and understanding the facts and reality of this unique
part of the world with my own eyes.
I’d now like to talk about some of the initiatives Japan is taking in the Middle East.
- Iraq
It is the fundamental policy of the Japanese government to dedicate itself to the
reconstruction of Iraq. Based on this policy, the Japanese government dispatched
Self-Defense Forces to the Southern Iraqi city of Samawah, with the aim of providing
humanitarian aid, such as facilitating safe drinking water and restoring primary school
facilities that were damaged. The Japanese government was first among donors
gathered at last October’s Madrid Conference on Reconstruction in Iraq to announce its
financial assistance package, which totals up to US$5 billion, and will go toward helping
the country reconstruct vital areas of its economy, such as electricity infrastructure,
health care, and educational facilities.
- Middle East Peace Process
In line with United Nations Security Council resolutions, the Japanese government firmly
supports peaceful coexistence of the “two states” Israel and Palestine. Japan Foreign
Affairs Minister Yoriko Kawaguchi, during her visit to the Middle East in June 2002,
announced the “Japanese Roadmap of Assistance to the Palestinians”. The roadmap
includes Japan’s pledged assistance toward reforming the Palestinian Authority, through
offering urgent humanitarian aid and human resource development, as well as the
building of a self-sustainable economy and society. As further evidence of Japan’s
proactive commitment to the Middle East peace process, Ms. Kawaguchi, in April 2003,
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mapped out Japan’s initiatives aimed at building mutual trust between Israel and
Palestine.
- Building a Fresh Japan-Middle East Relationship
Japan’s policies toward the Middle East have been primarily focused around the stable
supply of energy, namely oil. Through discussions at the International Energy Forum,
trust between the two sides has been built around this oil producer-consumer
relationship. It is my feeling that the partnership between Japan and the Middle East
should extend beyond just trade and embrace the cultural and societal uniqueness of
both Japan and the varied countries of the Middle East. Such a partnership would, by
course, ideally contribute to the region’s economic progress and overall stability. As a
first step towards this move, Japanese Prime Minister Junichiro Koizumi and President
Mubarak agreed, during Mr. Koizumi’s visit to Cairo in May 2003, to establish a
Japan-Arab Dialogue Forum, which has already been held twice since last year. It is
my sincere hope that the Japan-Arab partnership will be strengthened through such
dialogues between both sides, on topics ranging from culture to socioeconomic
development.
2. Building a Nation in the Wave of Economic Globalization
Global Promotion of FTAs and EPAs
The world economy is moving toward globalization at an incredible rate.
The US, for example, is working to broaden NAFTA into a common market that
encompasses both American continents—and in Europe, where the European Union
now numbers 25 countries. This trend is also being witnessed here in the Middle East,
where FTAs and bilateral association agreements between Arab nations and the EU are
progressing toward conclusion.
Similarly, economic integration of the East Asian region, encompassing Japan, China,
South Korea and ASEAN (or the Association of Southeast Asian Nations,) is progressing
rapidly, and we are on a very clear path toward establishing the East Asia Free Business
Area.
Many countries in the Middle East are making efforts to foster new industries, liberalize
areas of their economy, consolidate economic legal structure, and conclude FTAs with
partners both within and outside the region. I understand that, as Egypt works to keep
pace with globalization, the country’s Five-year Plan for Socio-economic Development,
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which began in 2002, identified export promotion as the key solution to two issues facing
the Egyptian government—namely, the deficit in balance of payments and a high rate of
unemployment. I think this is a very well timed and pertinent move. We should keep
in mind that globalization is placing us all under fierce competition, and that we must
work hard to survive this competition.
Necessity of Two Measures
In order to do this, a country must first prepare itself to work efficiently and effectively
under a strong initiative for export promotion—one that is unanimously backed by both
the government and private sectors.
Secondly, a country needs to have export industries that can compete in the global
market (this is an essential prerequisite for export promotion). Private sectors need to
work hard to improve their competitiveness, and governments must offer measures to
support these efforts.
Let’s together go through Japan’s experience in this area, and carefully consider these
two points.
3. Export Promotion Policy of Postwar Japan
As you know, Japan lost WWII and, with it, everything. All we had left was a land
devastated, on which we had to start from scratch to rebuild our nation.
Japan suffered a shortage of effective demand and an increase in accumulated stock,
and there appeared no other way to reactivate the economy than through export
promotion. At that time, however, Japan had very little information on overseas markets,
and no instrument to collect and analyze the much needed information. It was truly a
difficult period for Japan—the country had no choice but to conduct what can only be
termed as “blindfold trade”.
Establishment of JETRO
To overcome these difficulties, the Japan External Trade Recovery
Organization—JETRO’s predecessor—was set up in 1954 as the nation’s first export
promotion organization to conduct all activities related to trade promotion, such as
overseas research projects, trade mediation services, participation in international trade
fairs and promotion of Japanese products to the overseas markets. Four years later, in
1958, the Japan External Trade Organization Law was enacted and JETRO was
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re-organized as a statutory body.
As I mentioned earlier, JETRO was set up originally to serve as an overseas market
research body. In the 1960s, JETRO centered its efforts on “Export Marketing Surveys”,
which were conducted to 1) cultivate new export markets, 2) increase exports, and 3) to
remove factors inhibiting exports, covering a wide range of products, such as textiles,
machinery, chemicals, metal goods, watches, pharmaceuticals, etc.
JETRO Cairo was set up in February of 1955. At that time, His Excellency Dr. Ebeid was
running a research firm, and actually contributed to JETRO market research. I have
learned that it was through this experience that he first started to develop a deep
understanding of JETRO’s export promotion activities.
Overseas offices played an important role in these Export Marketing Surveys. JETRO
representatives in each office, with help from local research firms, would spend much of
their time on site visits or on the street gathering information, using their own eyes and
ears. Such representatives, after years of assignment in a country, became invaluable
experts on the country and its markets.
JETRO’s Export Marketing Surveys were fully utilized by both government and private
sectors.
Establishment of the Export Council
With JETRO as the first pillar of Japan’s export promotion, the second pillar, the Export
Council, was established in 1954 as the country’s supreme body to deliberate important
issues concerning export policy, export targets, and to coordinate between relevant
ministries and organizations. The council was chaired by the prime minister and
comprised of relevant ministers, the Bank of Japan governor and the Export-Import Bank
of Japan governor, as well as leaders of industrial circles.
A total of 12
industry-classified councils, each having numerous working groups to take care of
specific topics, were set up to supplement the Export Council. This pyramid system,
which literally involved the whole nation, worked elaborately: first, an industry-classified
council set detailed export targets for the industry and discussed the means to attain
these goals; conclusions were then brought up to higher-level meetings for further
examination; and finally, approval by the Export Council. To motivate the private sector
towards export promotion, the government introduced an award to recognize companies
that had greatly contributed to the country’s exports. Awards were handed to recipients
personally by the prime minister or ministers.
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Trade Council Classified by Overseas Commodities
In addition to the Export Council, the “Trade Council Classified by Overseas
Commodities” was set up in 1964—another distinctive device that Japan, this time,
deployed outside the country. This overseas council was responsible for turning
promotional policies into actual measures: under the leadership of senior officials in the
Ministry of International Trade and Industry (or MITI), staff members of diplomatic
establishments abroad and overseas representatives of JETRO and industrial
organizations—all on the front line of export markets—sat down to discuss down-to-earth
strategies for promoting a specific product to a specific market. The council provided a
steady stream of input that was invaluable to export promotion measures, which, thanks
to this stream, became more fine-tuned and practical than ever before.
Distinctive features of Japan’s Export Promotion Policy
Such policies, formed and implemented through collaboration between government and
private sectors, helped Japan to expand its exports from US$2 billion in 1955 to over
US$10 billion in 1967, and US$25 billion in 1971.
Looking back on the skeletal structure of Japan’s export promotion policy that I have just
described, I think we can pick out the following four distinctive features.
The first point is that there was a close and consistent collaboration and exchange of
information between MITI, JETRO and Japan’s industries.
The second point is that we took an industry/product-wise approach when addressing
export promotion. Numerous industrial organizations played central roles in this
approach. Take ceramics for example. In Japan, there is a ceramics producers’
association, a ceramics exporters’ association, a ceramics design center, and various
other groups for companies in the trade. Such associations would come up with
well-thought-out strategies for export promotion, based on market information that they
gathered on their own and through active exchanges with counterparts in their export
markets. What was impossible for an individual company, due to lack of resources and
knowledge, was made possible for them by combining forces under industrial
associations.
My third point is that Japanese companies were quick to understand their export markets,
allowing them to offer products compatible with each market. Still, Japanese products
at this time were rated “cheap and low quality” on international markets, so providing the
right products to the right market was just part of the battle. With government backing,
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private sector companies introduced new technologies that allowed them to offer high
quality goods at low prices. Markets took notice. Japanese products began selling
under “Japan Brand,” which became a symbol for quality and reliability. The country
also introduced the Export Inspection Law in 1957 to keep this favorable reputation intact,
and also encouraged firms to upgrade product design.
My fourth and the last point concerns the strong will and patience of private sector
companies. Needless to say, private companies are the central players in export
promotion. To succeed in export promotion, as we all know, one must understand the
needs of the targeted market.
Take international exhibitions for example: it is extremely rare that business deals are
concluded simply by taking part in a trade fair. When participating in exhibitions or
business delegations, you should not expect immediate results, but should try using
such opportunities, at least a few times, to get used to the market.
You may have heard about “Sogo Shoshas”, or Japan’s general trading houses, such as
Mitsui, Mitsubishi, Sumitomo or Itochu. The Sogo Shoshas have been sending their
staff to every corner of the earth, marketing and promoting Japanese products. Even
Sony or Toyota, when they first tried to tap into the American market, were turned away.
But they certainly didn’t give up. Both the Sogo Shoshas and manufacturing companies
spent over ten painstaking years trying to gain a foothold in American markets. We
must keep in mind that merely setting up a trading house doesn’t automatically lead to
export success. It takes tremendous efforts by its people.
4. Industrial Policy to Improve Competitiveness
Another key to succeeding in export promotion is to nurture industries that have potential
for becoming highly competitive in the global market.
During the postwar reconstruction period, Japan had to concentrate resources such as
materials and capital into coal mining, steel and other priority sectors that held the key to
rebuilding the economy. It was only after 1960 that Japan could afford to set industrial
development policy in tune with export promotion.
The 1960s was also a time when global trends toward free trade encouraged Japan to
open up its markets and prepare its industries for global competition. In 1963, in
response to this situation, MITI laid down a long term vision “Vision of the 60s”
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concerning industrial structure and, based on this vision, Japan started to nurture heavy
and chemical industries.
Developing Strategic Industries
- Car Industry
Although Japan tops the world today in car production, it was a very different story in the
1950s, when Japan was largely a producer of cargo trucks. At that time, when Japan
was producing only a limited number of cars (only 1,600 in 1950), high-level government
figures didn’t see the need for developing a car industry in Japan, based on the country’s
lack of experience in the industry and the fact that most Japanese, at that time, couldn’t
afford cars themselves. There was a strong voice, however, coming from MITI
strongly advocating the establishment of a car industry in Japan, seeing the area as
essential for the country’s economic development. MITI took the initiative of seeking
out and introducing new technology and know-how from European carmakers, greatly
furthering Japan’s domestic car production industry. By 1960, the country was
producing more than 80,000 cars a year. MITI’s vision and determination helped the
country make Japan’s car industry what it is today.
- The Electronics Industry
The electronics industry is another area that is readily identifiable with Japan, with such
world-class brands as Sony and Panasonic. As with the car industry, Japan severely
lagged behind the US and Europe in the electronics field after WWII. In the 1950s,
when television production was seen as a very high-potential industry, Japan was
producing a limited quantity—just 1,200 sets in 1953. What’s more, the cost of a TV
then was six times the average monthly income of Japanese people. But, as in the car
industry, this did not deter Japan. Japanese companies again looked to Europe for
advanced technology and production expertise, calling upon such companies as the
Netherlands’ Phillips.
Developing Parts Industry
When a country is set to develop a machinery or electronics industry, it must first nurture
the supporting industries, such as parts or component industries. In Japan’s case, the
government took the initiative to upgrade each sub-sector of the parts industry and
vitalize Small and Medium-sized Enterprises (or SMEs), by encouraging them to
formulate plans for development and modernization on their own, and supported their
efforts through low interest loans and tax incentives for the approved plans. This is
another example of Japan’s unique approach to industrial development.
The government’s aim of shifting industrial structure toward heavy machinery and
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chemical industries was achieved through 1) healthy entrepreneurship in the private
sectors 2) an appropriate government vision to support this spirit and 3) improvement of
tax and financial systems. Japanese cars, steel and electrical home appliances
marched on in the global market, gaining Japan considerable market share. These
things in turn helped significantly raise the standard of living, at least materially, of the
nation, and further helped Japan make great strides in achieving its goal of catching up
with the US and Europe. But in the 70s, as factories accumulated and populations in
the Pacific-rim Industrial Belt grew, pollution and environmental concerns became a
serious issue.
In 1971, MITI issued a “Vision of MITI Policies in the 1970s,” and set up trade and
industry policy to accommodate Japan’s shift towards a knowledge-intensive industry
from one centered on heavy and chemical industries, also recognizing that Japanese
people, at that time, placed priorities on two areas of their life—decreased environmental
burdens and shorter working hours. MITI, in response to this call, conducted an
initiative to foster precision equipment assembly (computers and numerical control
machinery tools industries, etc.) and fashion industries. Japanese government poured
substantial subsidies into the technological development area to promote
computer-related R & D activities. The government and private sectors both strove
hard for stronger industry competitiveness, also catching up with the wave of
liberalization of global trade and economy.
Characteristics of Japan’s Industrial Policy
This is an overview of Japanese policies undertaken for industry development.
there are five key points for Japan’s success.
I think
Firstly, MITI has issued a trade and industry policy vision every ten years since the
1960‘s, identifying strategic industries for which the Japanese government conducted
action plans to strengthen competitiveness. The government and private sectors
combined their efforts to work toward the visions laid out by MITI.
Secondly, both the Japanese government and private sector took initiatives to turn this
policy vision into a reality: firms in strategic industries eagerly introduced advanced
foreign technologies and promoted R & D activities—and the Japanese government
poured substantial subsidies into these technological development areas to further
support private sector efforts.
Thirdly, under the government’s guidance, industrial organizations from parts and
material industries, which support these strategic industries, made their own
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development and modernization plans. The government approved these plans and
generously supported them through favorable financial and taxation policies.
Fourthly, each company maintained favorable labor-management relations, and
employers and employees worked closely with each other in the common goal of
effectively promoting strategic industries.
Lastly, Japan was able to sustain a young, well educated workforce by increasing
enrollment in higher education and employing hard-working high school graduates.
This excellent and steady supply of invaluable human resources was the real driving
force behind the growth and expansion of the country’s strategic industries.
5. Egyptian Initiatives towards Export Promotion
I would now like to share my views on recent Egyptian policies for export promotion.
(1) Egyptian institutions to promote exports look far more developed than the ones Japan
had when it began promoting exports: the Ministry of Foreign Trade, with six sectors;
the Commodity Council, together with three executive arms of the foreign trade
ministry dealing with economic and trade relations, including the Egyptian
Commercial Service (which has 65 overseas offices and 150 staff); the General
Organization for Export and Import Control (GOEIC); and the General Organization
for International Exhibitions and Fairs (GOIEF) (comprised of hundreds of staff, who
hold trade exhibitions and fairs at home and abroad)–all of these bodies are
vigorously working to promote exports.
The key point here is to determine if these governmental organizations are actually
working closely with each other in the common goal of export promotion and giving
practical and useful support to private sector companies. Through these efforts,
mutual trust between the government and private sector companies can be fostered.
(2) Looking at Egypt’s present economic situation and trade issues, export promotion
presents a very serious challenge for the country. I wonder if this challenging issue
penetrates throughout the private sector, and is acknowledged as a national issue by
both the government and private sectors. This kind of issue should be resolved by
private sector-led initiative, with its determination and passion as well, and the
Egyptian government should support them with various forms of incentives and lead
them towards resolution.
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(3) Private sector competitiveness should also be considered in order to promote exports.
If Egyptian private sector firms do not have a competitive edge that is strong enough to
export their goods to overseas markets, the government should set up industrial
policies to foster areas that have clear potential for exporting products—and work to
strengthen export competitiveness in these areas. As I mentioned earlier, Japan’s
thorough and effective implementation of industry development policy led to successful
export promotion in the post-war era. The biggest challenge facing Egypt lies in this
point—the Egyptian government must carry out its policies for industrial development
with strong leadership and effectiveness.
In connection with these issues, foreign direct investments in Egypt are made mainly in
the energy and food industries—the two major fields that are most closely linked to the
resources available in the country. Since a considerable number of companies in
Europe and the US have already made investments in the Egyptian food industry, it
may be a good idea to concentrate your efforts in promoting more investment and
technology transfer in this field, for example by offering special incentives for investors
in this industry.
Some Egyptian food businesses, like Vitrac, a manufacturer of Jams, and Ottoman, an
herb company, have already made their way into the Japanese market via JETRO’s
support programs. We may expect to see more examples of such business alliances,
including capital tie-ups, between Egypt and Japan in the near future.
Also, good industrial design is very closely connected to the strength of a country’s
exports.
Consumers and businesses look for products that are well-priced,
well-made—and well designed. When presented with a choice between, say, five
products of equal price and quality, design becomes the determining factor. Japan
recognized early on the importance placed on good design and sent researchers
abroad and invited foreign industrial designers to Japan, hoping to raise the level of
design in Japanese products. The Japanese government also established “Good
Design Awards,” held export design fairs, and aggressively marketed Japanese
products at home and abroad via a wide range of media. These efforts led to the
establishment of “Japan Brand,” as I mentioned earlier, which became a symbol of
quality and good design. Such broad initiatives in promoting unique and good industrial
design, if taken in Egypt, would go far in helping the country establish brand awareness
of Egyptian-made products—well beyond Egypt’s borders.
Fostering Small and Medium-sized Enterprises (SMEs)
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(4) Japan’s dual economic policy of industry development and export promotion fostered,
almost as a matter of course, the strengthening and proliferation of SMEs in Japan’s
economic strata. The names of many large Japanese companies are household
words the world over. But the reality is that the smaller companies—the SMEs and
middle-ranking companies—are the real driving force in the Japanese economy. Of the
more than 320,000 companies in Japan, nearly 99% are SMEs (when I refer to SMEs, I
mean companies with 300 or fewer employees). Furthermore, 72% of Japan’s
workforce is employed by SMEs, and 51% of shipment value is represented by SMEs.
Given such impressive figures, it is easy to see the importance for governments to do
everything in their power to foster the growth of SMEs. The Japanese government
has been very active in its support of SMEs, instituting policies that are both generous
and comprehensive toward them, providing support in key areas like finance and
credit-guarantee systems and even offering management consulting.
According to a recent survey conducted by the Japan Cooperation Center for the
Middle East, Egypt is strong in the field of IT software and media content development.
As a cultural hub in the Arab region, Egypt might be able to position itself as the
transmission source of information and content, in the Arabic language, to the entire
region.
The government of Thailand and many other countries in Asia are now pushing hard
the concept of “One Village One Product”, in order to vitalize their local economies.
The “One Village One Product” movement is an idea to let local people take up a
product or industry distinctive to their region—such as furniture, food or
handicrafts—and cultivate it into a world-class product. Government support, in the
form of technical guidance, financial assistance—or a combination of such
schemes—is extended to those regions most eager to participate.
Promoting Foreign Direct Investment
(5) In order to strengthen the competitiveness of Egyptian industries, it is essential for
Egypt to promote foreign direct investment (FDI) by foreign private sector firms. A
common strategy seen in East Asian countries, such as those in China and ASEAN, is
to open their markets to FDI. These nations have successfully developed their own
manufacturing industries as a result of putting FDI as a key area and promoting exports,
which helped them achieve economic growth. For example, China is attracting the
world’s attention with its economic surge, but in fact, foreign affiliated companies are
responsible for about half of China’s exports. It could also be said that attracting
blue-chip companies to invest in Egypt is another approach towards export promotion.
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The point here is how to attract foreign firms to Egypt when the whole world is
competing for FDI. The answer to this question, for Egypt, is rather simple: the
country needs to convince foreign firms that Egypt is a country where they can make a
profit. However, saying is one thing, doing is another. The country faces a long list
of important tasks that need to be taken care of, such as development of supporting
industries, education of a young and capable workforce, strong efforts by the
government to invite FDI, offer tax incentives and improvement of the investment
environment as a whole. Some Japanese companies, in fact, are considering
investing in Egypt, and view the Middle East as an area of high potential. It is
important for the Egyptian government to aggressively invite such companies,
promising them the utmost support and offering attractive incentives. If FDI by such
companies proves successful, more companies will join the bandwagon. Furthermore,
foreign companies who make profits in Egypt will bring tax revenue and jobs to the
country. Asian countries represent good examples of inviting FDI in this way. I
would like to strongly encourage you to establish new incentive policies aimed at
creating a world-class competitive business environment for foreign firms.
6. Expectations for ECED
Need for National Commitment
Coming back to the re-establishment of ECED, I would like to reiterate that export
promotion is an extremely challenging task. No matter how hard a government tries to
stir-up enthusiasm, little progress will be made if there is no interest or willingness in the
private sector. Similarly, the private sector’s drive for exports should not be hindered by
government interference. Only a perfect blend of government and private sector
cooperation can bring about the desired effect.
I have already spoken about JETRO’s experiences. I would now like to present another
example—this time regarding a much younger export promotion organization that, with
JETRO’s support and through much of their own efforts, became an essential tool in the
Malaysian government.
Malaysia’s Experience
The Malaysia External Trade Development Corporation, or MATRADE, was established
in 1993. During the organization’s early years, between 1994 and 1999, JETRO, upon
request from the Malaysian government, supported MATRADE with its capacity and
organization building. In the early 90s, Malaysia was trying to diversify its economy,
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which at that time was heavily dependent on the export of primary products, such as oil
and natural rubber. As a measure to push through this drive and reduce the current
account deficit, the government decided to position the nurturing of export-oriented
manufacturing industries as a top priority issue, as outlined in the 1991 “Sixth Malaysia
Plan”. Following this policy, the then Malaysia Export Centre was re-established as
MATRADE in 1993. I see many similarities between this story and what is taking place
in Egypt with ECED.
The Malaysian government and JETRO, when working on starting MATRADE, agreed
that the most important function of the organization should be the collection, analysis and
dissemination of market information, and that MATRADE should be sensitive to the
needs of the Malaysian government and the private sector, as well as trends in overseas
markets. For MATRADE, it was also decided to put everything under one roof—all
export-promotion-related schemes, such as overseas research, exhibitions and trade
missions, which before were handled by different organizations. The decision turned
out to be a good one, as the schemes are now run more efficiently and effectively.
Due to the lack of manpower and experience, MATRADE admittedly went through a hard
time during its first few years. However, they gradually picked up strength in research
and information services, and their library shelves began to fill with valuable information
on overseas markets. As the agency started to deliver services that were directly linked
to the benefit of companies—such as participation in international trade fairs or trade
enquiry services—the reputation of MATRADE grew. Five years after the launch of
MATRADE, they conducted a feedback survey among their clients: 80% of the
respondents said that they found MATRADE’s services valuable to their businesses.
This remarkable figure shows how much effort the organization has spent in
understanding the needs of Malaysian companies—and how this hard work has paid off.
MATRADE today has become a think tank for the government in the field of trade
promotion. In fact, their staff write speeches on external trade for the prime minister and
ministers. The agency also prepares many important official papers on international
trade. Indeed, the organization has grown into an indispensable body for the country’s
trade promotion.
I believe that the successful launch of MATRADE would not have been possible without
the strong will and leadership of Prime Minister Mahathir Mohamad, whose
determination to lead the country toward an export-led economy and firm belief in reform
pushed through the tough restructuring of the organization.
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Support from JETRO
I promise that JETRO will offer its maximum support to the new ECED. In close
collaboration with the Japan International Cooperation Agency, or JICA, JETRO is
planning to dispatch a veteran advisor to ECED, who will work strictly in the area of
advising on export promotion policy. We are also ready to cooperate in human
resource development, for example, by offering a training course in Japan for ECED staff
to study the ins and outs of export promotion. JETRO Cairo will be extending all
possible support to help ensure the successful take off of ECED.
As I mentioned at the opening of my talk, cordial exchange between Egypt and Japan
dates back over 140 years. It is my sincere hope that the economic relationship
between the two countries will be further deepened through cooperation in the common
priority issue of export promotion.
Thank you very much.
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