Malaysia continues to shine in attracting FDI despite regional competition
11 Sep 2024
Malaysia has steadily attracted foreign direct investment (FDI) while contending with stiff competition from regional players such as Vietnam and Singapore.
KRA Group political risk consultant and director of strategy, Amir Fareed Rahim, noted that while competition persists, recent figures indicate that Malaysia continues to hold a prominent position on the global investment radar.
“In the first half of 2024, the country secured RM160 billion in investments, marking an 18 per cent year-on-year increase, driven by its strong economic fundamentals.
“Low inflation (2.0 per cent), stable interest rates (3.0 per cent) and consistent unemployment figures (3.3 per cent) have made Malaysia an appealing destination for investors,” he told Bernama.
He noted that, crucially, over half of these investments were allocated to sectors identified under the National Investment Aspirations (NIA), with RM60.1 billion directed towards the manufacturing sector.
“This boost is expected to create over 33,000 high-value jobs in management, technical and skilled labour positions.
“The global semiconductor upcycle has played a role in this growth, but Malaysia’s robust ecosystem and government policies have also been instrumental in attracting investors to this key industry,” he said.
Amir emphasised that to build on this momentum, the government must focus on maximising the spillover effects of these investments to ensure that local industries, particularly micro, small, and medium enterprises (MSMEs), benefit from the growth.
“This will not only help the economy but also foster inclusive development, a key measure of success.
“The Malaysian government’s clear economic priorities, supported by blueprints like the New Industrial Master Plan (NIMP) 2030 and the National Energy Transition Roadmap (NETR), continue to provide investors with confidence in Malaysia’s long-term growth trajectory,” he said.
Amir stressed that developing a strong talent pipeline is crucial for sustaining future growth.
“Positioning Malaysia as a research and development hub for industries such as electronics and electrical engineering is key.
“This will require continued investment in world-class universities and research centres that blend local and international expertise,” he said.
Regarding geopolitics, Amir observed that Malaysia’s neutrality in foreign policy is increasingly viewed as an asset in a fragmented global landscape, helping to maintain investor confidence.
“Domestically, achieving the RM11.5 billion savings target from subsidy rationalisation without political backlash will be a test of the government’s ability to navigate delicate issues,” he said.
With Malaysia set to chair the Association of Southeast Asian Nations (ASEAN) in 2025, Amir highlighted that the focus would be on leveraging strengths in the digital economy, green technology and manufacturing.
“Maintaining political stability and consistent policy messaging will be crucial in attracting long-term investment.
“As Malaysia positions itself as a stable, transparent, and business-friendly economy, its strategic foreign policy and trade positions will play a pivotal role in sustaining investor confidence and driving future growth,” he added.
Source: Bernama
