Malaysia posts record FDI in 2013

by **Cals** Fri 14 Feb 2014, 11:14

Business & Markets 2014

Written by Supriya Surendran of theedgemalaysia.com

Friday, 14 February 2014 10:43

KUALA LUMPUR: Malaysia recorded its highest ever foreign direct investment (FDI) last year, attracting RM38.77 billion worth of investments, surpassing the previous record of RM37.32 billion in 2011.

Last year’s FDI was 24% higher than 2012’s figure of RM31.11 billion. The increase was also higher than the FDI seen globally (+11%), in developing countries (+6.2%) and in Southeast Asia (+2.4%), as reported by the United Nations Conference on Trade and Development (Unctad).

The Ministry of International Trade and Industry (Miti) said that in terms of realised private investments (measured in terms of gross fixed capital formation), Malaysia achieved a record RM161.1 billion in 2013.

This was an increase of 14.9% from RM140.2 billion recorded in 2011. It also exceeded the annual average target of RM148 billion under the 10th Malaysia Plan.

“All sectors of the economy registered increases in FDI inflows in 2013. Investments were mainly in the manufacturing (37.6%), service (28.8%) and mining (28.7%) sectors,” Miti said in a statement yesterday.

The ministry also said that in the service sector, the major contributors were financial and insurance/takaful activities and the information and communication sub-sectors, which together contributed 55% of the investments in the service sector for 2013.

“Many large corporations and prominent multinational companies [MNCs] have chosen Malaysia to establish their regional and global operations, integrating their value and supply chain activities to take advantage of the country’s strong ecosystem.

“This trend will gain momentum, given the government’s continued policy advocacy in creating a conducive environment for the business community in Malaysia. Many of these MNCs have also established structured training programmes to transfer their key competencies to Malaysian employees.”

Miti said these FDIs will create high-income employment opportunities for Malaysians in such sub-sectors as business, accounting, finance, IT, engineering, technical and other new service sub-sectors, like designing and analytical sciences, in the long term.

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The record FDI in 2013 came on the heels of the country’s better than expected gross domestic product growth of 4.7%, which beat expectations. The encouraging economic growth was driven mainly by private consumption and exports.

This article first appeared in The Edge Financial Daily, on February 14, 2014.