Spanish companies see Malaysia as gateway to Asean market

Spanish ambassador to Malaysia Maria Bassols, in an exclusive interview with The Edge Financial Daily, said Spanish companies’ interest in Malaysia has accelerated since the global financial crisis in 2008.

“Since early this year we have seen quite a number of Spanish companies coming in to enquire about setting up operations in Malaysia.

“As a result of the crisis, Spanish companies are becoming much more international and a lot of their business is now outside of Spain. We have seen this happen since 2007 but what we have not seen, what is new, is this speed of acceleration.”

To date, the amount of investments committed by Spanish companies in Malaysia stands at US$1.3 billion (RM4.05 billion) compared with RM200 million invested up to 2008.

This trend is reflected in trade between both countries. Last year, Malaysia’s exports to Spain fell by 16.1% to RM2.17 billion from RM2.52 billion a year earlier.

However, Spanish imports into the country increased 20% to RM1.56 billion from RM1.30 billion in 2011.

The declining exports will eventually reverse since the drop last year was more pronounced due to the European debt crisis, said Bassols.

Although recent economic data shows that Spain’s economy contracted by 1.4% last year from a 0.4%growth in 2011, Bassols believes that there are already signs that the country is on the road to recovery.

“There are already signs that we are on track.

To address imbalances in its economy, Spain has proposed a wide range of structural reforms which include boosting employment, public finance, and competition among its energy, telecommunications and transportation sectors as well as measures designed to improve its corporate sector.

“I would say we’re in a much better place than we were before. We have a leaner and meaner banking sector which has been subjected to a rigorous stress test which we think is better than others,” she added.

For example, since the start of the year, Spanish credit institutions have been required to increase their minimum core capital requirements to 9% from a minimum 8% previously. An aggressive clean-up of their bank’s balance sheets has been done in tandem with other banking reforms.

Meanwhile, in a bid to curb Spain’s raging youth unemployment which has soared to 55%, Prime Minister Mariano Rajoy unveiled a catalogue of 100 individual measures last week.

The government, backed by the European Union, has earmarked €3.5 billion (RM14.27 billion) over four years to stem unemployment among young people in the country.

This article first appeared in The Edge Financial Daily, on March 18, 2013.