Reactivating the Russian-Malaysian Cooperation

Russia is blessed with vast natural resources such as oil and gas, iron and steel as well as wood and forestry. Today, Russia is among the world’s leading producers of oil and natural gas and a top exporter of metals such as steel and primary aluminium. Russian companies are also trendsetters of technology in niche industry segments such as aerospace, energy generation, machinery and equipment, weapon and military, given their intense focus on research and development activities.

Over the years, Russia and Malaysia have established a long and rewarding partnership. The two countries continue to develop mutually beneficial bilateral relations.

This is reflected by the growth of bilateral trade between both nations by more than 7 per cent to RM12.8 billion in 2019.

This is further highlighted by Russia’s position as the largest investor in Malaysia’s manufacturing sector from the Commonwealth of Independent States (CIS) member countries.

Furthermore, the establishment of the Joint Russian-Malaysian Commission on Economic, Scientific, Technical and Cultural Cooperation was an important step in boosting investment flows. The first meeting of the intergovernmental commission which took place in Moscow in October 2019 gave a new pulse to the bilateral relations, further enhancing interactions between the countries.

The Senior Russian government authorities and private sector representatives have actively joined exhibition events in Malaysia. For example, a wide range of Russian high-tech companies participated in the Langkawi International Maritime and Aerospace Exhibition, Defense Cervices Asia and the Malaysia Oil and Gas Services Exhibition.

Notably, in November 2019, a large-scale business mission of Russian companies to Malaysia was organised in tandem with the Russia Trade and Business Investment Forum. Under the auspices of the Ministry of Industry and Trade of the Russian Federation, over 40 Russian companies visited Malaysia, and the delegation was represented by esteemed players in the field of aircraft construction, shipbuilding and railway transport.

During the Forum, modern models of civil aircraft, helicopter technology, sea and river vessels, locomotives and wagons, air navigation equipment, air and sea traffic control systems, as well as information and physical infrastructure security solutions, were presented.

With the support of the Ministry of International Trade and Industry (MITI) and the Malaysian Investment Development Authority (MIDA) on the sidelines of the business mission, a briefing for Russian companies was held. The topics covered during the briefing include measures to facilitate the investment and localisation of foreign companies as well as special tax and tariffs preferences.

This undertaking witnessed fruition a few months later with the registration of new Russian companies in Malaysia. These companies were from the high-tech spheres such as telemedicine, smart city, Industry 4.0, cybersecurity and 5G data transmission. Staying true to its reputation of being a “single window” agency to coordinate all investment-related activities in Malaysia, officials from MIDA closely facilitated the Russian companies, offering prompt and reliable assistance while displaying high levels of professionalism.

It is important to note that Russian companies investing in Malaysia are not merely providing black-box solutions. They are ready to assist Malaysian partners in creating joint systems of informational security and protection of critical infrastructure by cooperating in R&D, engineering education and training.

Additionally, with Russian companies’ focus on the most promising and breakthrough technologies such as advanced digital production technologies, industrial Internet of Things, robotics, big data analysis, neuro-technology and artificial intelligence, systems of the distributed registry as well as virtual and augmented realities collaborations with Malaysian partners will prove to be valuable. Among the latest pursuits involve creating technological partnerships in the field of 3D printing and aerial drones.

There are already successful examples of Russian-Malaysian business collaborations, such as the production of energy efficiency, high-speed data transmitters, smart lighting, as well as traffic monitoring systems. These locally produced products are being introduced globally, particularly to the Russian, European and ASEAN markets.

Currently, the Trade Representation of the Russian Federation in Malaysia, together with MIDA, is preparing the ground for future cooperation for both countries’ technological ecosystem. Among the potential area of collaboration include the management of companies within free economic zones, industrial clusters and technological parks. The highlight of this venture will be the establishment of a Russian-Malaysian High-Tech Centre in Malaysia. It will be a permanent B2B platform to demonstrate advanced Russian developments focusing on e- government, cybersecurity, smart cities, Industry 4.0, unmanned vehicles (aerial, automotive and marine) and artificial intelligence solutions.

As both nations strive to further develop bilateral relations, the Malaysian-Russian BusinessCouncil headquartered in Kuala Lumpur and the Russian-Malaysian Business Council headquartered in Moscow are taking the instrumental role and proactive approaches.

The two organisations actively facilitate business dialogues between the entrepreneurial communities of both nations by regularly holding business matching, forums and meetings. Given the present business climate surrounding the COVID-19 pandemic, virtual forums have also become an increasingly popular tool to build investors’ confidence and update stakeholders.

Despite the positive trends in bilateral trade and economic relations, the full potential of cooperation between Russia and Malaysia have yet to be developed. Moving forward, the Trade Representation of the Russian Federation in Malaysia will continue to take every effort to activate and develop the cooperation between Russia and Malaysia.

For additional information about Russian-Malaysian business activities or to submit proposals for future undertakings, please contact [email protected].