Characteristics of and Factors Affecting Foreign Direct Investment in the Malaysian Furniture Industry

This study was undertaken to asses the characteristics of foreign direct investment (FDI) in the Malaysian furniture industry. This study answered three specific objectives namely, to evaluate the characteristics of FDI in the Malaysian furniture industry from 1985-2004, to compare the characteristics of FDI in the Malaysian furniture industry during first Industrial Master Plan (IMP) (1986-1995) and second IMP (1996-2004), and lastly to determine the factors affecting FDI in the Malaysian furniture industry. Secondary published data on furniture investments were collected from the Malaysian Industrial ~ e v e l o ~meAn tu thority (MIDA). The value of investments were deflated by the Malaysian consumer price index (CPI) obtained from the International Financial Statistics (IFS, 64), published by the International Monetary Fund (IMF), whereby the year 2000 was treated as the base year (2000=100). Descriptive analyses were employed in order to analyse the trend of investment according to the period of study identified in the research objectives. The study was then followed by questionnaire survey and open-ended interviews of identified foreign manufacturing companies. Rank order analysis was applied to rank the locational factors affecting the decision of FDI in the Malaysian furniture industry. The results showed that from 1985 to 2004, investment in the Malaysian furniture manufacturing had mixed performance from both domestic and foreign sources of investment. Of the 661 projects approved for establishment, 340 projects or 51 percent were accounted from foreign investment. Throughout the period of study, the capital ownership was controlled by domestic investment with 63 percent share of the total real equity. On the other hand, in terms of ownership equity, the foreign investment had better control, having 53 percent of total real equity. With respect to fixed assets investment, the domestic investors were much more aggressive in purchasing and acquiring fixed assets. In terms of employment opportunities, foreign projects had provided 50,219 employments or 53 percent share of the total 9 1,O 19 employments in the furniture manufacturing projects. Over the period of study, furniture manufacturing projects have been found to be more capital-intensive and less labour-intensive a shown by the increased of capital investment per employee (CIPE) ratio. The major sources of FDI in the Malaysian furniture industry, for the past 20 years were from Taiwan, Singapore and Japan. The results on the comparison of the investment in the Malaysian furniture industry between two IMP periods showed a declining trend of foreign investment during the second IMP period. The domestic investment in the furniture manufacturing however continued to be on a positive trend. This suggested that the foreign furniture manufacturer is in the stage of consolidation. In terms of CIPE ratio, although there had been an increasing trend during the second IMP period, however the foreign furniture projects were still below the RM55,OOO threshold set by the government. This indicates that foreign furniture projects was still labour-intensive in nature. Despite of decreased value of investment fiom the major sources of FDI in the Malaysian fbrniture industry during the second IMP period, however new sources of investment from other country during the second IMP showed that the Malaysian furniture industry is still attractive for foreign investors. Hence, the new structured policy must provide competitiveness in terms of cost, as new locations in Southeast Asia are available. The survey analysis concluded that the stability of the government, investment guarantee agreement with the country, freedom to remit earning and interest royalties, freedom to repatriate capital, availability of skilled labour force, prevalence of peaceful industrial relations, reliable supply of power, water and gas, transportation and communication facilities, support of banking and insurance services, external demand and export market potential, tariff and trade protection, tax incentives, efficiency of public sector, economic stability and exchange rate stability are the most important factors affecting FDI in the Malaysian furniture industry. The analysis on traditional economic determinants of FDI such as low cost labour and availability of raw material had showed that these factors were less important while skilled labour was decisive in affecting FDI in the Malaysian firniture industry. Therefore, effective training especially from local training institutions has to be intensified in order to produce a well-educated and skilled work-force for the industry

Structure and Characteristics of Fuelwood Supply Chain in Yobe, Nigeria

Fuelwood commercialization activities provide a source of livelihood in Nigeria. Despite its economic significance, the industry has been kept out of the formal economies due to a lack of supportive data on the structure and characteristics of the industry. This study investigates the structure of the supply chain and examines the chain actors' roles and functions to understand the issues within the supply chain activities. Data were collected through key informants' interviews and observations. The study found that fuelwood business activities were conducted formally by licensed actors and informally by non-licensed actors. Benefits received and issues experienced by actors were related to the formality of the business. Heavy reliance on natural forests for fuelwood production among chain actors can add pressure on the forest resources and ecosystem. Therefore, significant intervention is needed for the industry which includes policy and programs related to fuelwood plantation and management, government support, licensing education, and collaborations among all stakeholders to improve supply chain activities. &nbsp

The global palm oil sector must change to save biodiversity and improve food security in the tropics

Most palm oil currently available in global markets is sourced from certified large-scale plantations. Comparatively little is sourced from (typically uncertified) smallholders. We argue that sourcing sustainable palm oil should not be determined by commercial certification alone and that the certification process should be revisited. There are so-far unrecognized benefits of sourcing palm oil from smallholders that should be considered if genuine biodiversity conservation is to be a foundation of 'environmentally sustainable' palm oil production. Despite a lack of certification, smallholder production is often more biodiversity-friendly than certified production from large-scale plantations. Sourcing palm oil from smallholders also alleviates poverty among rural farmers, promoting better conservation outcomes. Yet, certification schemes - the current measure of 'sustainability' - are financially accessible only for large-scale plantations that operate as profit-driven monocultures. Industrial palm oil is expanding rapidly in regions with weak environmental laws and enforcement. This warrants the development of an alternative certification scheme for smallholders. Greater attention should be directed to deforestation-free palm oil production in smallholdings, where production is less likely to cause large scale biodiversity loss. These small-scale farmlands in which palm oil is mixed with other crops should be considered by retailers and consumers who are interested in promoting sustainable palm oil production. Simultaneously, plantation companies should be required to make their existing production landscapes more compatible with enhanced biodiversity conservation

Export performance of tropical timber products certified by the Malaysian Timber Certification Scheme

A study on the export performance of timber products certified under the Malaysian Timber Certification Scheme (MTCS) was conducted from 2003 to 2015. The objectives were to analyse the trend and growth of certified timber products (CTP) and to determine the factors that influenced their export using Generalised Linear Models (GLM). The annual growth of CTP export had a fluctuating trend. The compound annual growth rate (CAGR) within the study period was estimated at 31%. The average annual growth rate (AAGR) estimated using log-linear regression analysis was 22%. The primary markets for CTP export were European countries, accounting for nearly 83% of exports over the study period. The Netherlands seemed to be the main destination for almost half (40%) of the CTP. The major product was sawn timber (59%), followed by plywood (31%). GLM revealed that the export trend of CTPunder the MTCS increased with the number of Chain-of-Custody (CoC) certificate holders. More active involvement in the MTCS CoC certification scheme by industry players could promote the growth of Malaysia’s sustainable timber trade

Glowing mushrooms

Have you ever ventured into the forest at night and saw glowing mushrooms on top of some wood surfaces? The glow or greenish lights from bioluminescent mushrooms come from a light-emitting substance called luciferin

Socio-ecological perspectives of engaging smallholders in environmental-friendly palm oil certification schemes

The majority of smallholders in palm oil producing countries are not involved in palm oil certification schemes. The schemes are jointly developed by environmental NGOs, government agencies, and plantation companies without the input of smallholders. The inclusion of smallholders into palm oil certification schemes is necessary as they constitute 40% of land use coverage for global palm oil cultivation. This paper argues for the need to understand the smallholders’ socio-ecological perspectives to design a realistic and acceptable scheme. Three hundred independent and managed smallholders in Peninsular Malaysia were interviewed to collect information on the groups’ knowledge, perception, expectation and willingness to participate in the certification scheme. The study showed that the smallholder groups (more than 90% of the respondents) were keen to participate in the certification scheme if there is a premium pricing for oil palm yield and the certification cost is affordable. The study also indicated that smallholders need to be educated on biodiversity conservation and provided with financial and technical incentives to boost smallholders’ participation. The paper concludes that understanding the socio-ecological background of smallholders is instrumental to designing a holistic certification scheme that will successfully conserve biodiversity in the agricultural production landscape without neglecting the plight of smallholders

The global palm oil sector must change to save biodiversity and improve food security in the tropics

Most palm oil currently available in global markets is sourced from certified large-scale plantations. Comparatively little is sourced from (typically uncertified) smallholders. We argue that sourcing sustainable palm oil should not be determined by commercial certification alone and that the certification process should be revisited. There are so-far unrecognized benefits of sourcing palm oil from smallholders that should be considered if genuine biodiversity conservation is to be a foundation of ‘environmentally sustainable’ palm oil production. Despite a lack of certification, smallholder production is often more biodiversity-friendly than certified production from large-scale plantations. Sourcing palm oil from smallholders also alleviates poverty among rural farmers, promoting better conservation outcomes. Yet, certification schemes e the current measure of ‘sustainability’ e are financially accessible only for large-scale plantations that operate as profit-driven monocultures. Industrial palm oil is expanding rapidly in regions with weak environmental laws and enforcement. This warrants the development of an alternative certification scheme for smallholders. Greater attention should be directed to deforestation free palm oil production in smallholdings, where production is less likely to cause large scale biodiversity loss. These small-scale farmlands in which palm oil is mixed with other crops should be considered by retailers and consumers who are interested in promoting sustainable palm oil production. Simultaneously, plantation companies should be required to make their existing production landscapes more compatible with enhanced biodiversity conservation.This study was supported by Universiti Putra Malaysia Grant (GP-IPM/2014/9450000

Promoting landscape heterogeneity to improve the biodiversity benefits of certified palm oil production: Evidence from Peninsular Malaysia

The Roundtable on Sustainable Palm Oil (RSPO) is responsible for the certification of palm oil producers that comply with sustainability standards. However, it is not known whether RSPO-certified plantations are effective in maintaining biodiversity. Focusing on Peninsular Malaysia, we show that both RSPO-certified plantations and uncertified large-scale plantations are characterized by very low levels of landscape heterogeneity. By contrast, heterogeneity measures were many times higher in palm oil producing smallholdings, despite their lack of RSPO certification. The low heterogeneity of large-scale oil palm plantations, including those certified by the RSPO, is likely to severely limit their value for biodiversity conservation. Uncertified smallholdings, in contrast, are much more heterogeneous and therefore hold substantially greater promise for the integration of palm oil production and biodiversity conservation than large-scale plantations. With oil palm agriculture further expanding, certification schemes should mandate producers to improve biodiversity conservation through landscape management that promotes greater landscape heterogeneity

Attitudes and willingness of local communities towards natural urban forest conservation in a rapidly developing Southeast Asia city

Habitat fragmentation is a major threat to natural forests, causing unprecedented biodiversity loss and habitat destruction. To date, the social-economic factors affecting the conservation of fragmented urban forest remnants have been rarely investigated, particularly in the tropics. The objective of this study is to understand the attitudes and willingness to conserve natural urban forests in local communities living nearby. We interviewed 450 respondents living near three natural urban forests in Greater Kuala Lumpur, Malaysia, using a structured questionnaire. We found that the majority of the respondents had a positive attitude towards natural urban forest conservation. Local communities had high willingness to conserve these natural urban forest patches. The main contributing factors to attitudes and willingness were the presence of forest patches in their neighbourhood, education level, and length of stay. The relationships between urban forests and humans are complex, as this study demonstrates. Regardless of patch size, the local communities were concerned about the conservation of natural urban forest patches and their ecological integrity. Our findings can inform policy-makers to support better planning of urban green spaces and biodiversity conservation, which are especially important for cities in low and middle income countries in the Global South