Malaysia: Fo­cused on the fu­ture as foreign in­vestors eye re­wards

Last year’s po­lit­i­cal earth­quake is now just a mem­ory as in­ter­na­tional in­vestors em­brace the myr­iad of op­por­tu­ni­ties in many sec­tors

Newsweek - - REWIND -

Malaysia’s eco­nomic re­silience con­tin­ues to im­press, with lead­ing in­ter­na­tional fi­nan­cial in­sti­tu­tions fore­cast­ing strong sin­gle-digit gross do­mes­tic prod­uct (GDP) growth for 2019 and foreign di­rect in­vest­ment (FDI) main­tain­ing its surge. Hav­ing recorded FDI of $19.34 bil­lion in 2018, the coun­try saw $11.95 bil­lion flow in dur­ing the first half of 2019 alone.

De­spite the back­drop of a chal­leng­ing po­lit­i­cal en­vi­ron­ment, Malaysia re­mains a pow­er­ful mag­net for FDI due to its di­ver­si­fied econ­omy, in­creas­ing ex­port sec­tor and strong pri­vate con­sump­tion as a core pil­lar of eco­nomic growth. Ob­servers ex­pect the coun­try of 32.5 mil­lion peo­ple to ben­e­fit from any es­ca­la­tion of the Us-sino trade war as Chi­nese man­u­fac­tur­ers and busi­nesses may look to re­lo­cate and take ad­van­tage of Malaysia’s rep­u­ta­tion for man­u­fac­tur­ing ex­cel­lence.

Po­lit­i­cal, eco­nomic and so­cial sta­bil­ity, a pro-busi­ness cli­mate, en­vi­able strate­gic lo­ca­tion, and sub­stan­tial nat­u­ral and hu­man re­sources, mean Malaysia is well po­si­tioned to take ad­van­tage of such changes to trade flows and grow­ing in­ter­na­tional con­fi­dence in its new lead­er­ship that came to power in May 2018. “The 350 per­cent year-on-year in­crease in FDI to nearly $11.85 bil­lion in Jan­uary-septem­ber 2018 demon­strated the in­crease in con­fi­dence from in­vestors in the new lead­er­ship of the coun­try un­der Prime Min­is­ter Tun Dr Ma­hathir Bin Mo­hamad, the world’s old­est prime min­is­ter,” notes Fi­nance Min­is­ter YB Lim Guan Eng.

This up­beat view was echoed by the In­ter­na­tional Mon­e­tary Fund, which in a late 2018 re­port noted: “The Malaysian econ­omy has shown re­silience in re­cent years and con­tin­ues to per­form well. Real GDP growth is mod­er­at­ing in line with ex­pec­ta­tions.

“Real GDP growth is pro­jected at 4.5 to 5.0 per­cent in 2019, with do­mes­tic de­mand re­main­ing the main driver of growth.” Such pos­i­tive feed­back is warmly re­ceived by YB Yeo Bee Yin, Min­is­ter of En­ergy, Science, Tech­nol­ogy, En­vi­ron­ment and Cli­mate Change.

“The new gov­ern­ment is more trans­par­ent and more ac­count­able to the peo­ple of Malaysia and in­vestors, she notes. “There is a lot more data for in­vestors to ac­cess be­fore they ar­rive; a lot more cer­tainty. We have a stronger democ­racy that works now. We have a lot of re­forms, but a lot stronger gov­er­nance.”

Among the ma­jor names op­er­at­ing in some industries that fall un­der her min­istry’s con­trol are oil and gas go­liath Petronas, and elec­tric­ity gi­ant Te­naga Na­sional Ber­had. Yeo Bee Yin is ea­ger for in­ter­na­tional in­vestors to tap into the open­ings in the en­ergy sec­tor.

“We plan to boost the rate of elec­tric­ity gen­er­ated by re­new­able en­ergy from 2 per­cent to 20 per­cent,” Yeo Bee Yin adds: “So­lar en­ergy will play a sig­nif­i­cant role. Power sec­tor re­forms will bring more com­pe­ti­tion, more busi­ness op­por­tu­ni­ties for large and small play­ers, and greater trans­parency. We have a good plas­tics man­u­fac­tur­ing in­dus­try and want to trans­form our­selves from a heavy plas­tics user by fo­cus­ing on cut­ting-edge tech­nolo­gies like bio­plas­tics and zero sin­gle-use plas­tics.”

Green en­ergy projects will help pre­serve Malaysia's pre­cious nat­u­ral re­sources

YB Yeo Bee Yin Min­is­ter of En­ergy, Science, Tech­nol­ogy, En­vi­ron­ment and Cli­mate Change

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