FDI target on track, Miti expects to attract US$10bil

CYBERJAYA: Malaysia is still on track to achieve its foreign direct investment (FDI) target of US$10bil this year despite the economic crisis in the United States and Europe, said Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir.

“We have FTAs (free trade agreements) that we've been signing with a number of countries in the region. These FTAs are not just limited to trade but also to investment.

“When we have such arrangements, companies from those countries become more aware (about the incentives that we provide) and why it's attractive to invest in Malaysia,” he said after the launch of Shell Business Service Centre (SBSC) here yesterday.

Malaysia recorded US$9.1bil in FDI last year. Mukhriz also said that the International Trade and Industry Ministry (Miti) had been aggressively promoting Malaysia as an attractive investment destination, especially to Japan, South Korea and countries in the Middle East.
Mukhriz and Shell Malaysia managing director for downstream businesses Azman Ismail at the Shell Business Service Centre launch

“These initiatives have borne fruit. Quite a number of serious enquiries are being entertained at the moment, not just through Miti but also through Mida (Malaysian Industrial Development Authority).

“(And) because we have more eggs in the basket, meaning that we are not overtly dependent on one or two sources of investments like the United States and Europe, we think we can mitigate any drop in investments from them, (so) we're still on target,” he said.

Standard & Poor's had, on Aug 5, cut the US long-term credit rating by a notch to AA-plus from AAA, reflecting concerns about the US' budget deficits and rising debt burden. It called the outlook “negative,” indicating that another downgrade is possible in 12 to 18 months.

According to Miti, Malaysian exports to the United States declined by 7.3% to RM4.96bil in June while exports to the European Union dropped by 1% to RM5.79bil in the same month.

Meanwhile, Shell Malaysia intends to expand the number of its knowledge workers at the SBSC to 3,000 by 2013 from 2,100 presently.

The SCBC here is the second largest of six global business service centres, providing business services like information technology, finance operations, human resources, contracting and procurement, customer service as well as supply and distribution.

The SCBC is also the only centre to offer a complete suite of business services, supporting about 90 countries.