KL seeks to become Asia's top outsourcing center

KL seeks to become Asia's top outsourcing center

Eileen Ng, Agence France-Presse, Putrajaya, Malaysia

Malaysia will seek to lower the cost of business to remain
competitive as one of the region's top outsourcing centers and
bolster growth in its eight-year-old high-tech zone, Prime
Minister Abdullah Ahmad Badawi said on Wednesday.

Abdullah said global demand for outsourcing had risen
dramatically, with business process outsourcing alone expected to
create a global industry worth an estimated US$500 billion by
2008.

A global survey by U.S. consultancy firm AT Kearney listed
Malaysia as the third most attractive offshore location in terms
of cost and skills behind India and China.

Abdullah said outsourcing operations had emerged as one of the
largest sectors in Malaysia's Multimedia Super Corridor, spawning
investment of more than one billion ringgit by 49 companies and
some 8,000 new jobs in the special zone south of Kuala Lumpur.

The sector would play a key role in the zone's second phase of
development from 2004 to 2010, creating at least 100,000 new jobs
by the end of the period, he said.

"Malaysia must move quickly and take advantage of this
opportunity to build a stronger brand name for itself around its
offshore capabilities," he said in a keynote address at a two-day
regional outsourcing conference.

Abdullah said the Multimedia Super Corridor (MSC), launched in
1996 as Asia's answer to California's Silicon Valley, has
expanded rapidly with new "cyber-cities" being established in
several states.

But he urged the industry to boost the quality of their
products and services amid stiff regional competition.

"I am happy with the MSC as a brandname. It's a popular brand
and well known but the quality of products and services can
improve," he told reporters later.

"We don't know if Malaysia is going to be Asia's Silicon
Valley or not but we are working very hard. We cannot run away
from competition. We have invested a lot and we must continue to
do all we can to attract the best brains, the best talent to be
involved in this industry."

Earlier, Abdullah said the government would seek to boost the
efficiency of its public delivery system to lower the cost of
operations and look at ways to lower training costs to woo more
companies to the Multimedia Super Corridor.

To encourage local companies to venture overseas, he said the
government would seek to engage them in global-level projects to
build their capabilities, lower their financing costs and make it
easier for them to access foreign talent.

The Multimedia Super Corridor was developed by Abdullah's
predecessor Mahathir Mohamad, who retired last October after 22
years in power, as part of a plan to turn Malaysia into a
developed nation by 2020.