Mukhriz: Malaysia must move on despite drop in FDI
By Rahmah Ghazali
KUALA LUMPUR: International Trade and Industry Deputy Minister Mukhriz Mahathir today said it is time the country "moved on" in order to recover from the record plunge of 81% in foreign direct investment (FDI) in 2009.
This is despite the note of “caution” sounded by CIMB managing director Nazir Tun Razak, who said the plunge needed to be studied carefully.
The World Foreign Investment Report 2010 released by the United Nations showed that FDI in Malaysia declined 81% last year, trailing behind countries in the region like the Philippines, Vietnam, Thailand, Indonesia and Singapore.
Mukhriz conceded that the report showed a significant drop in the country's FDI, but said that other countries too were affected.
He was responding to Penang Chief Minister Lim Guan Eng (DAP-Bagan) in a supplementary question at the Dewan Rakyat today.
According to Mukhriz, the government had formulated various policies from the mid-2009 including the New Economic Model, 10th Malaysia Plan, Government Transformation Plan and Economic Transformation Plan, to attract foreign investment.
This was reflected in the first half of 2010 financial year, which saw foreign investors taking a new look at the country.
"We do not want to look at what happened in 2009, we want to look at what is happening this year," Mukhriz said.
High-value investors
He also dismissed allegations that foreign investors were shying away from the country because of growing racial sentiments, as claimed by Lim.
"I see high-value investors coming to this country. It shows that they have no problem with what is happening in the country... they still see Malaysia as an exciting investing destination that meets their taste," said Mukhriz.
Nazir has said that the declining FDI flow needed to be studied carefully before jumping to conclusions.
“It doesn’t mean that lower net investment flow is necessarily bad. We need to look at the quality of the investments and look at the facts in terms of the timing of investments,” Nazir, the younger brother of Prime Minister Najib Tun Razak, was quoted as saying.
He also was reported to have said that possible factors that contributed to lower FDI figures were CIMB and Maybank's "huge" investments in Indonesia.
But this wasn't necessarily a bad thing, he said, because, in the long term, it is beneficial for Malaysia that Maybank invests and earns return from Indonesia.
Earlier in his reply to Dr Muhammad Leo Michael Toyad (Mukah-BN), Mukhriz said the government had approved 390 manufacturing projects involving foreign investments valued at RM22.1 billion in 2009 (see Table 1).
Meanwhile, 239 manufacturing projects involving foreign direct investments valued at RM9.6 billion were approved from January to July 2010 (see Table 2).
http://www.freemalaysiatoday.com/fmt-english/news/general/11458-mukhriz-malaysia-must-move-on-despite-drop-in-fdi
