Malaysia is on track to see more than RM50 billion in foreign direct investments (FDI) by 2030, in the absence of any unexpected economic shocks. This is according to UOB Global Economics and Markets Research. It anticipates FDI inflows, in ringgit terms, to sustain its average long-term 15-year growth trend of 3.6 per cent per annum in the medium term. The absolute annual FDI inflows of around RM51.6 billion (or about US$13.5 billion) by 2030.
Between 2021 and Mar 2024, the Malaysia Investment Development Authority (Mida) had approved almost RM1 trillion worth of investments with committed manufacturing investments making up RM474.3 billion (47.9 per cent), services investments amounted to RM461.8 billion (46.6 per cent) and primary sector investments totalling RM54.2 billion (5.5 per cent). About 77.2 per cent of approved manufacturing projects have been implemented, while about 21.1 per cent are in the planning phase and the balance of 1.6 per cent remain unimplemented. This is in addition to projects in the pipeline that totalled RM128.4 billion as of May 31, this year.
Source: https://en.wikipedia.org
UOB Research said various catalytic projects in the national masterplans, such as New Industrial Master Plan 2030 (NIMP 2030) and National Energy Transition Roadmap, will further enhance opportunities for investments in Malaysia's high-growth high-value (HGHV) sectors.
Johor-Singapore Special Economic Zone (JS-SEZ) and the country's five regional economic corridors will also work to bring in investments. along with Malaysia's efforts to grow its trade ties.
To date, Malaysia has implemented 16 Free Trade Agreements (FTAs, seven bilateral and nine regional) and joined the Regional Comprehensive Economic Partnership (RCEP), Indo-Pacific Economic Framework (IPEF) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The United Nations Trade and Development (UNCTAD) in its World Investment Report 2024 said the global environment for international investment "remains challenging" in 2024 due to economic fracturing trends, trade and geopolitical tensions, industrial policies and shifts in supply chains reshaping FDI patterns, prompting some multinational enterprises to stay cautious on overseas expansion.
FDI inflows are most helpful. But we need to be vigilant of politicians who have a habit of stirring-up issues. Some of which are self-inflicted. Once any foreign/domestic investor decides to abort, it is difficult to change their minds. Hopefully, we have good sense prevailing in the political/economic landscape of Malaysia.
Reference:
Malaysia on track to bring in more than RM50b in FDI by 2023 – UOB Research, Asila Jalil, New Straits Times, 2 September 2024
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