TMI: Malaysia third for FDI in Asean, fifth in Asia..... By Lee Wei Lian

Malaysia third for FDI in Asean, fifth in Asia

By Lee Wei Lian

July 06, 2012

Mustapa said Malaysia’s investment policies ran parallel with the UNCTAD framework for sustainable development. — File pic

KUALA LUMPUR, July 6 — Malaysia recorded the third-highest level of foreign direct investment (FDI) in South East Asia last year, behind Singapore and Indonesia, and was fifth-highest in Asia, according to the United Nations Conference on Trade and Development (UNCTAD).

China had the highest level of FDI at US$124 billion (RM391 billion), followed by Hong Kong (US$83 billion), Singapore (US$64 billion), Indonesia (US$19 billion) and Malaysia (US$12 billion).

Malaysia was also the fifth-largest source of FDI in Asia, with outflows reaching US$15 billion, behind South Korea (US$20 billion), Singapore (US$25 billion), China (US$65 billion) and Hong Kong (US$82 billion).

UNCTAD said in a report that FDI inflows to the region as a whole had hit a new record, rising 14 per cent to US$336 billion, or 22 per cent of the global total, compared to just 12 per cent before the global financial crisis.

The agency warned, however, that global FDI was losing momentum this year and will settle at about US$1.6 trillion, before increasing to US$1.8 trillion and US$1.9 trillion in 2013 and 2014, respectively.

“Investor uncertainty on the course of economic events for this period is still high with UNCTAD’s annual survey of executives of transnational corporations (TNCs) finding that roughly half of respondents are either neutral or undecided about the state of the global investment climate in 2012,” it said.

The report also said that TNCs were holding record cash reserves estimated at between US$4-5 trillion, which have so far not translated into sustained growth in investment levels.

The 100 largest TNCs alone were found to be hoarding US$1 trillion in cash, which was estimated to be US$105 billion higher than the pre-crisis levels.

UNCTAD’s report this year stressed the theme of “new generation investment policies” that included using economic growth for sustainable and inclusive development.

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said that Malaysia’s investment policies are aligned with UNCTAD’s policy framework for sustainable development.

“We have made good progress in delivering social development and economic growth in 2011 under the Government Transformation Programme and the Economic Transformation Programme,” he said.