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
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