Malaysia climbed to 6th spot as attractive profit centre, says MIDA

KUALA LUMPUR: Malaysia rose to sixth spot in the 2015 in terms of the “Baseline Profitability Index” (BPI), which rank destinations of attractiveness for foreign investors.

The Malaysian Investment Development Authority (MIDA) said on Monday the improvement in the country’s ranking was published by the Foreign Policy Magazine.

Among ASEAN countries, only Malaysia and Singapore featured in the top 10. Indonesia was ranked 12th, Vietnam (23), the Philippines (30) and Thailand at the 38th position. 

“This ranking, which covered 110 countries across six continents reaffirms that Malaysia is an attractive profit centre in this region for investors,” it said.

MIDA said the BPI, introduced by an adjunct professor of New York University’s Stern School of Business since 2013, uses a holistic approach based on eight factors that will affect the ultimate success of a foreign investment. 

These factors cover economic growth, financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates. 

The BPI calculation also incorporates changes made by the World Bank in its measurement of GDP such as the revised method to compare living standards across countries.

MIDA chief executive officer Datuk Azman Mahmud said this endorsement had “dissolved” lingering misperceptions and attested the country’s improving economic fundamentals and the government’s prudent, proactive and pragmatic policies to restructure and diversify the economy. 

“The Index sends a clear message that Malaysia provides a friendly business environment that makes it an attractive place to invest. This ranking is based not only on historical conditions but also on expectations about conditions prevailing over the next five years.

“The ranking is a reflection of the continuous improvement in the delivery of public services and overall efficiency of the government machinery,” he said. 

Azman said Malaysia had consistently registered a double-digit growth of gross fixed capital formation (GFCF) since 2010. 

Malaysia has exceeded the average annual investment target of RM148bil set in the 10th Malaysia Plan (10MP) with a growth rate of 12.6% per annum. 

In the first quarter this year, the GFCF increased 13.6% to RM51.5bil in Q1 2015 from RM45.3bil a year afo.

“As at June 2015, MIDA already has several exciting projects in the pipeline with investments worth RM25.8 billion for the manufacturing and services sectors,” he said

Azman said for the manufacturing sector, MIDA would focus on three (3) catalytic subsectors namely chemicals, electrical and electronics (E&E) and machinery & equipment  industries, and two (2) subsectors of high potential growth namely aerospace and medical devices. 

As for the services sector, more attention will be given to ICT, oil & gas services, private healthcare, private higher education, tourism and professional services.”