TRADE IN TECHNOLOGY
7.3 TRADE IN SERVICES
7.3.2 Main Contributors to Payments and Receipts
7.3.2.1 Royalties
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Chapter 7
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TRADE IN TECHNOLOGY TRADE IN TECHNOLOGYPayments
RMMillion
Receipts Balance 10000
15000 20000
1999 2000 2001 2002 2003 2004
Year 12540.2 12302.0
11115.6 10685.2
17448.8 17469.7
5449.0 5789.4 6108.6 6042.3 6575.2
8150.1
-7091.2 -6512.6
-5007.0 -4642.9
-10873.6 -9319.6 -5000
0
-10000 -15000
Figure 7.13: Total Payments, Receipts and Balance in Trade in Services, Malaysia
Source: Bank Negara Malaysia
0 10 20 30 40 50 60
1999 2000 2001 2002 2003 2004
Percent(%)
Royalties Contract & Professional Fee Construction & Engineering Fee 32.2
36.0
42.5
50.4 52.6 53.7
54.5
47.9
36.1
31.6 29.9
27.0
13.2
16.1
21.4 17.9 17.4 19.3
Year Figure 7.14: Composition of Payments in Services Trade, Malaysia
Source: Bank Negara Malaysia
Royalties Contract & Professional Fee Construction & Engineering Fee
Source: Bank Negara Malaysia 0
10 20 30 40 50 60 70 80
1999 2000 2001 2002 2003 2004
55.2
64.0 67.6
64.0 62.2
57.6
44.0
35.0
31.3
34.9 36.6
40.0
0.9 1.0 1.1 1.1 1.2 2.4
Figure 7.15: Composition of Receipts in Services Trade, Malaysia
Percent(%)
Year
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Malaysian Science and Technology Indicators 2006 Report Malaysian Science and Technology Indicators 2006 Report111
Chapter 7
Chapter 7
TRADE IN TECHNOLOGY TRADE IN TECHNOLOGYPayments
RMMillion
Receipts Balance 10000
15000 20000
1999 2000 2001 2002 2003 2004
Year 12540.2 12302.0
11115.6 10685.2
17448.8 17469.7
5449.0 5789.4 6108.6 6042.3 6575.2
8150.1
-7091.2 -6512.6
-5007.0 -4642.9
-10873.6 -9319.6 -5000
0
-10000 -15000
Figure 7.13: Total Payments, Receipts and Balance in Trade in Services, Malaysia
Source: Bank Negara Malaysia
0 10 20 30 40 50 60
1999 2000 2001 2002 2003 2004
Percent(%)
Royalties Contract & Professional Fee Construction & Engineering Fee 32.2
36.0
42.5
50.4 52.6 53.7
54.5
47.9
36.1
31.6 29.9
27.0
13.2
16.1
21.4 17.9 17.4 19.3
Year Figure 7.14: Composition of Payments in Services Trade, Malaysia
Source: Bank Negara Malaysia
Royalties Contract & Professional Fee Construction & Engineering Fee
Source: Bank Negara Malaysia 0
10 20 30 40 50 60 70 80
1999 2000 2001 2002 2003 2004
55.2
64.0 67.6
64.0 62.2
57.6
44.0
35.0
31.3
34.9 36.6
40.0
0.9 1.0 1.1 1.1 1.2 2.4
Figure 7.15: Composition of Receipts in Services Trade, Malaysia
Percent(%)
Year
7.3.2 Main Contributors to Payments and Receipts
This section presents the royalty, contract and professional charges, and construction and engineering fee payments, receipts and balances by the leading contributors.
7.3.2.1 Royalties
The United States remained the largest recipient of royalty payments from Malaysia over the period 1999-2004 but the share in the total has started falling since 2002 (Figure 7.16). Japan, the United Kingdom and Singapore remained important payment destinations over this period. The others category has particularly expanded since 2002 with increasing flows to Hong Kong, Korea and Germany.
As noted earlier, royalty receipts received by Malaysia have been extremely low. The United States contributed most to the royalty receipts exceeding 30 percent in 1999-2003 (Figure 7.17). The share from United States has fallen since 2001 dipping below 10 percent in 2004.
The Japanese share, which was second highest in 2000, has fallen since to dip below 1 percent in 2004. The share from United Kingdom rose strongly in 2004. The others category has expanded sharply throughout the period 1999-2004 to become the leading contributor in 2004. Hong Kong has become a major contributor of receipts to Malaysia accounting for 28.9 percent of total receipts received in 2004.
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TRADE IN TECHNOLOGY TRADE IN TECHNOLOGYThe trade deficit involving royalties with Malaysia remained highest with the United States exceeding over 50 percent in 2002 (Figure 7.18). Although the United States’ percentage share has fallen since 2002 the absolute figures worsened in 2003 and only fell marginally in 2004. The royalty deficit trend appeared similar with Japan while with United Kingdom has risen since 2000. The royalty deficit with Singapore has risen since 2002. These results obviously show not only that payments on royalties (for copyrights, patents, industrial designs and other intellectual properties) have continued to dwarf receipts received but also that the trends against the leading trading partners have not improved significantly.
The evidence in this section simply shows that Malaysia is still highly dependent on foreign technology demonstrating that much of the innovations taking place in the manufacturing sector in the country are not new to the universe.
Deficits in the royalty account grew further in 2002-2004 because of faster growth in payments. The royalty balance involving the main trading partners worsened in 2002-2004 despite some improvements from 2003.
Source: Bank Negara Malaysia
677.1 928.3 1089.1 1028.2
1139 1119
568.8
680.1
677.5
601.5
708
698 212.6 165.9
115
105.8
394
550 83.6 140.5
139
125.8
209 282
118.5 62
358.8 55
587 721.2
0 20 40 60 80 100
1999 2000 2001 2002 2003 2004
Others Singapore United Kingdom Japan United States Figure 7.16 Royalty Payments (RM Million), Malaysia (1999-2004)
Percent(%)
Year
Source: Bank Negara Malaysia
Others Singapore United Kingdom Japan United States
23.3 30.0 38.0
29.2
26.0
17.5 6.7
14.3
3.2
4.9
2.4
1.7 2.4
2.0
8.8 11.6
3.4
38.0
11.6 5.3
10.5 6.4
11.3
10.3
4.2 6.8 8.0
11.4
35.0
125.4
0 20 40 60 80 100
1999 2000 2001 2002 2003 2004
Figure 7.17: Royalty Receipts (RM Million), Malaysia (1999-2004)
Percent(%)
Year
Source: Bank Negara Malaysia
-653.8
-898.3 -1051.1
-999
-1112.8 -1101.2
-562.1
-665.8
-674.3
-596.6
-705.6
-696.2
-210.2
-163.9
-106.2
-94.2
-390.8 -511.9
-72 -135.2
-128.5
-119.4
-198.1 -271.4
-114.3 -55.2
-350.8 -551.9 -595.8
-100 -80 -60 -40 -20
0 1999 2000 2001 2002 2003 2004
Others Singapore United Kingdom Japan United States
-43.6
Figure 7.18: Royalty Balance of Payments (RM Million), Malaysia (1999-2004)
Percent(%)
Year
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Chapter 7
TRADE IN TECHNOLOGY TRADE IN TECHNOLOGYThe trade deficit involving royalties with Malaysia remained highest with the United States exceeding over 50 percent in 2002 (Figure 7.18). Although the United States’ percentage share has fallen since 2002 the absolute figures worsened in 2003 and only fell marginally in 2004. The royalty deficit trend appeared similar with Japan while with United Kingdom has risen since 2000. The royalty deficit with Singapore has risen since 2002. These results obviously show not only that payments on royalties (for copyrights, patents, industrial designs and other intellectual properties) have continued to dwarf receipts received but also that the trends against the leading trading partners have not improved significantly.
The evidence in this section simply shows that Malaysia is still highly dependent on foreign technology demonstrating that much of the innovations taking place in the manufacturing sector in the country are not new to the universe.
Deficits in the royalty account grew further in 2002-2004 because of faster growth in payments. The royalty balance involving the main trading partners worsened in 2002-2004 despite some improvements from 2003.
Source: Bank Negara Malaysia
677.1 928.3 1089.1 1028.2
1139 1119
568.8
680.1
677.5
601.5
708
698 212.6 165.9
115
105.8
394
550 83.6 140.5
139
125.8
209 282
118.5 62
358.8 55
587 721.2
0 20 40 60 80 100
1999 2000 2001 2002 2003 2004
Others Singapore United Kingdom Japan United States Figure 7.16 Royalty Payments (RM Million), Malaysia (1999-2004)
Percent(%)
Year
Source: Bank Negara Malaysia
Others Singapore United Kingdom Japan United States
23.3 30.0 38.0
29.2
26.0
17.5 6.7
14.3
3.2
4.9
2.4
1.7 2.4
2.0
8.8 11.6
3.4
38.0
11.6 5.3
10.5 6.4
11.3
10.3
4.2 6.8 8.0
11.4
35.0
125.4
0 20 40 60 80 100
1999 2000 2001 2002 2003 2004
Figure 7.17: Royalty Receipts (RM Million), Malaysia (1999-2004)
Percent(%)
Year
Source: Bank Negara Malaysia
-653.8
-898.3 -1051.1
-999
-1112.8 -1101.2
-562.1
-665.8
-674.3
-596.6
-705.6
-696.2
-210.2
-163.9
-106.2
-94.2
-390.8 -511.9
-72 -135.2
-128.5
-119.4
-198.1 -271.4
-114.3 -55.2
-350.8 -551.9 -595.8
-100 -80 -60 -40 -20
0 1999 2000 2001 2002 2003 2004
Others Singapore United Kingdom Japan United States
-43.6
Figure 7.18: Royalty Balance of Payments (RM Million), Malaysia (1999-2004)
Percent(%)
Year