Malaysia Asia’s 5th favourite FDI destination

Malaysia attracted an inflow of US$11.97 billion last year, an increase of 31.5 per cent from 2010.



Malaysia emerged as the fifth most popular destination for foreign
direct investments (FDIs) in Asia last year with inflows of US$11.97
billion (RM37.83 billion), an increase of 31.5 per cent from 2010.

The figures, released by United Nations Conference on Trade and
Development (UNCTAD) yesterday, showed that the manufacturing sector
continued to be the largest contributor to FDI inflows at 44 per cent.

This was followed by the services sector (35 per cent), mining and
quarrying (20.1 per cent) and agriculture, forestry and fishing (0.3
per cent).

"If I am an investor, Malaysia to me is a place of
strength, the country to come to. It is an excellent place to be," said
UNCTAD investment and enterprises division chief, Professor Hafiz
Mirza, who presented the report here yesterday.


The only shortcoming for Malaysia in attracting FDI
would be the size of its small local economy, which makes it necessary
for the country to upgrade its global value chain.

"From the broader perspective, Malaysia is strong in manufacturing and
so the question next is whether it should expand beyond that, like
going into research and development," he said.

Hafiz added that
instead of relying on the country's strength in manufacturing, Malaysia
could start producing new designs for the global market.

He
noted that Malaysia had been very successful in attracting investment
through its policies, adding that under UNCTAD's new FDI Contribution
Index, Malaysia was in a strong position to introduce its new set of
"next-generation" investment policies.

In 2009, FDI inflows to Malaysia was only US$1.45 billion, compared with US$7.17 billion in 2008.

Malaysia was ranked fifth after China, Hong Kong, Singapore and Indonesia.

The UNCTAD figures were disclosed in conjunction with the release of
The World Investment Report 2012, subtitled "Towards a New Generation
of Investment Policies", which was launched by International Trade and
Industry Minister Datuk Seri Mustapa Mohamed.

Hafiz said Malaysia was among the few countries that exceeded UNCTAD's expectations in terms of the FDI Contribution Index.

The index ranks economies on the basis of the significance of FDI and
foreign affiliates for their economies in terms of value added,
employment, wages, tax receipts, exports, research and development
expenditures and capital formation.

The other countries with better-than-expectation performances were Cambodia, Poland, Romania, Thailand and Britain.

Meanwhile, Mustapa said in his speech Malaysia's investment policies
were aligned with UNCTAD's policy framework for sustainable development.

"We made good progress in delivering social development and economic
growth last year under the Government Transformation Programme and the
Economic Transformation Programme," he said.

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