Boosting Malaysia’s FDI appeal
09 Oct 2024
MALAYSIA’S economy, reliant as it is on exports, is heavily dependent on Foreign Direct Investments (FDIs).
Little wonder that the government is working very hard on making the country an attractive destination for such investments.
And it shows. In March, the Global Opportunity Index 2024 (GOI) report by the Milken Institute, an American think tank, ranked the country at number 27, even way ahead of China, which is perched at 39.
It is not easy for Malaysia to be among the leading FDI destinations in Asia, especially with economic giants like China and India in the continent.
According to a PwC report, there are more than 5,000 foreign companies from over 50 countries doing business in the country, an evidence that lends support to Milken Institute’s ranking.
But this doesn’t mean Malaysia can rest on its laurels.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz acknowledged as much, though not in those words, to news agency Bernama when commenting on the GOI report.
The recognition by the Milken Institute, he said, would spur the government to deliver better service to investors to make Malaysia a gateway to Asia.
On Monday in Vientiane, where he is attending the 44th and 45th Asean summits, Zafrul outlined three selling points for attracting FDIs into Asean: inclusivity, openness and sustainability.
By this he means trade with all and be friends with all, too. Asean must maintain its neutrality to boost regional investment, he told his peers gathered in the Laotian capital, in the face of geopolitical tensions that are tearing the world apart.
What works for Asean must work for Malaysia.
Geography has blessed us by placing Malaysia in a strategic location, with all 10 Asean member countries within reach by air, sea or road.
Nature has favoured us in more ways than one. Highly skilled workforce is a plus here, too.
But attracting FDI are all of these and more.
The more is about reducing “key pain points along the investors’ journey”, as Zafrul put it to Bernama in March.
This has become more crucial now that more and more countries are competing for the same investment dollars.
Malaysia has aggressive competitors and they are doing very well.
The World Competitiveness Ranking (WCR) by the International Institute for Management Development released in June ranks our neighbours better.
Malaysia ranked 34 out of 67 countries, earning itself a spot behind Thailand and Indonesia for the first time since the ranking began in 1997.
Interestingly, Singapore topped the table, beating Switzerland and Denmark in that order.
Analysts may take issue with the ranking giving much weight to the size of population and gross domestic product, but still the WCR is a good benchmark for identifying areas for improvement.
What is more, it is partly based on what business executives — investors in the final analysis — perceive Malaysia’s competitiveness to be.
This shows that there is still some work to be done in relieving investors’ pain points.
Improving FDI processes to assist investors must be given precedence for Malaysia to remain an attractive investment destination.
Source: Bernama
