Malaysia's Two Fold Strategy for Promoting FDIs

By - CEM Team

Malaysia is seeing a rise in foreign investment, highlighting the success of the government’s efforts to make the country an attractive investment destination. The government’s strategy to enable this has been two fold, with stress on efficient governance and strong bilateral trade relations between Malaysia and its trading partners, evident from Malaysia exploring the possibility of holding a Free Trade Agreement with the Eurasian Economic Union. Between 2009 and 2015, FDI in Malaysia was growing at 22% annually.

Malaysia recorded RM 37.3 billion of approved investments in the services, manufacturing and the primary sectors in Q1 2016 and if fully implemented, these investments could potentially create 39,990 jobs in the country. FDI into the country rose from RM 10 billion in Q1 2015 to RM 12.8 billion in Q1 2016, marking a 28% jump.

A brief on country's Services and Manufacturing sector performance :

Services Sector
The services sector alone saw foreign investments surging by 112.1% from RM 3.3 billion in Q1 2015 to RM 7 billion in Q1 2016.
Foreign participation in distributor trade increased 992% increase from RM 101.5 million in Q1 2015 to RM 1108.7 million in Q1 2016. The growth in retail sector has been impressive too, with Malaysia now ranking 3^rd in the Global Retail Development Index.

Malaysia’s education sub-sector has been investors’ attraction, with its growth pattern. In this sector, there was an increase of 627.7% of foreign investments from RM 19.3 million in Q1 2015 to RM 149.2 million in Q1 2016. In the previous quarter, the Malaysian Investment Development Authority approved a total of 60 global establishments with investments of RM 5.6 billion.
 
Manufacturing Sector
Investment in the manufacturing sector in the previous quarter totalled RM 8.9 billion from 170 projects, generating 19,650 jobs. The transport equipment sector, in particular, has recorded phenomenal growth of 1584% from RM 40.1 million in Q1 2015 to RM 675.7 million in Q1 2016.
“The approach taken by the government is right and gives foreign investors the confidence to continue to invest in Malaysia” said Prime Minister Datuk Seri Najib Razak, expressing hope in Malaysia’s future prospects as an investment destination.
 
Source: The Star