Five game changers for Labuan
Published on: Friday, November 11, 2016
Labuan: The Economic Planning Unit (EPU) has identified five major industries that could become a game changer for Labuan's economic growth. Minister in the Prime Minister's Department Datuk Abdul Rahman Dahlan categorised the industries as financial services, oil and gas (O&G), tourism, halal development, and fishing. He said the five major growth industries were turning the island into an ideal location for investments.
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"Overall, due to its natural endowments, strategic location and investment by the government, I believe that Labuan is a region ripe for growth. "This is on top of the fact that we are part of the BIMP-EAGA (Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area), providing us access to a bigger market and greater inter-country synergies," he said at the Asian Business Conference 2016 here Thursday. Citing financial services industry as the first key industry, he said Malaysia's thriving Islamic finance ecosystem was facilitating Labuan into becoming one of the key offshore Islamic financial centres in the region. "As at August 2016, the Labuan International Business and Financial Centre (IBFC) managed to attract 13,000 companies, 209 insurance companies, 54 banks and 374 leasing companies," he said.
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Rahman, who is Minister in charge of the EPU, said despite the challenging global financial market conditions, Labuan's financial industry managed to record moderate growth across all its key segments. "Naturally, we owe this to our strong financial infrastructure. The pre-tax profit of the Labuan banking sector jumped from US$461 million in 2014 to US$620 million in 2015 due to the improved quality of assets, while Islamic financing also increased by 55.6 per cent to US$1.8 billion in 2015.
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"Increasing efforts have been taken to create awareness of Labuan IBFC's wealth management products, especially in the areas of trusts, foundations and private funds," he said. Labuan IBFC's is enhancing the island's attractiveness as a wealth management hub for high net-worth individuals, corporations and families, he said, adding that, "Our thrust towards wealth management is part of the strategy to reposition Labuan as a 'mid-shore' centre." "This means it offers both the ease of doing business found typically in offshore centres, and the high international standards of regulation and supervision traditionally found in onshore operations. "In line with our overall strategy, the Labuan Financial Services Authority will be undertaking three key policy initiatives in 2017: ensuring legal requirements remain relevant, increasing ease of reporting and data exchange, and improving compliance by financial institutions. "Our strong track record in Labuan and repositioning efforts will put us in good stead to maintain our excellent reputation and performance," he said. Citing the O&G as the second key industry for Labuan, he said the upstream segment served as a receiving terminal for crude oil and gas produced offshore, as well as an important supply base to support offshore production. "In the downstream segment, Petronas Chemicals Methanol is the largest methanol producer in Southeast Asia and fourth largest in the world," he added. He said the large oil and gas sector is central to Labuan's import and export industry as exported petroleum and oils products account for roughly two thirds of total exports worth RM6.8 billion. "Moving forward, we will focus on the efficient-cost management of the players, strengthening strategic alliances and promotion of regional cooperation to better utilise the assets. On tourism, the third growing industry on the duty-free-island, he said Labuan was endowed with picturesque beaches, pristine islands, world-class hotels and rich history. Rahman said hotels in Labuan had attracted 673,000 guests in 2015, nearly seven times the local population. "However, this is only a fraction of the six million visitors Sabah receives annually. "We believe that potential synergies and greater connectivity with the mainland will increase our market size and bring about a positive economic multiplier effect to the island," he said. On the growth of the halal industry, the fourth key industry on the island, he said the Labuan Halal Hub, one of the 21 halal parks in Malaysia, would benefit from growing global trade of halal products as a result of rising world's Muslim population. Rahman said fishing, which was the fifth key industry in Labuan, it had the potential to be up-scaled by capitalising on existing infrastructure to cater to deep-sea fishing, especially tuna fishing. He said the Tuna Industry Development Strategic Plan found that tuna fishing industry could generate about RM500 million in revenue, with Labuan being the potential centre for a large-scale tuna industry. "In the 11th Malaysia Plan, RM20 million has been allocated for the upgrading of Labuan's fishery complex to transform it into a fishing city. Stay up-to-date by following Daily Express’s Telegram channel.
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