KUALA LUMPUR: Invest KL Corp said the current investment and economic climate is “certainly not business as usual, not when companies tell employees to go on leave or take a pay cut”.
But aside from the recent change in government, Invest KL is more concerned about the coronavirus, or Covid-19, pandemic.
Invest KL chairman Datuk Seri Michael Yam said: “Multinational corporations look at 15 to 20 years down the road. They are not going to change just because of a blip on the radar.
“What is more worrying is Covid-19, ” Yam told StarBiz.
Invest KL is an agency under the International Trade and Industry Ministry (Miti).
Yam, who has weathered four recessions, said: “Reform and restructuring plans are normal” and Malaysia would have to weather this.“Due to the fear of infection and restrictions on travel and face-to-face interaction, engagement with Invest KL’s targeted large global (MNCs) would be affected adversely.”
He said the agency has a healthy pipeline of prospects, which its team has been pursuing closure, and which may be delayed and possibly deferred due to the uncertain economic and health situation.
Yam said it is monitoring the situation carefully and will continue to be in touch with these MNCs.
“Provided the pandemic is not protracted, there is every likelihood we are able to catch up and deliver the foreign direct investment (FDI) numbers committed, ” Yam said.
The agency has secured 91 large MNCs out of 100. Sixteen left because of various reasons like merger and acquisition.
Invest KL was incorporated in 2011. It was given the additional responsibility of attracting and accelerating Chinese FDIs and on Jan 1,2020, the China Special Channel was set up.
Its aim was to capture global investments which are currently in China, and are caught in the US-China crossfire. They can be Chinese or non-Chinese companies.
They may want to relocate to South-East Asia and some have called Invest KL directly, Miti or the Finance Ministry.
To recap, the US-China trade war has been a source of volatility for more than a year. Companies based in China have seen seeking new destinations within South-East Asia. Yam said Vietnam has been aggressively courting them and Malaysia would like to benefit from that overflow of small and medium-sized companies (SMEs).
“Most of them would not be focused on the Greater KL area but in other parts of Malaysia. We can give them that soft landing, ” he said.
The capex of companies that come in under China Special Channel would be high as it would involve the setting up of factories, Yam said.As for the 100 MNCs Invest KL is seeking, this would involve high value, high impact jobs which is KL-specific. The mandate for both is different, said Yam.
Over the years, the top five issues that investors found wanting when compared to Asean neighbours are the lack of talent in certain areas, lack of clarity and consistency in policies and decision-making, delays in project completion and government processes.They are also concerned about the lack of transparency and the impact of the current political landscape.
The key sectors Invest KL are targeting include industrial products and robotics, technology in the areas of renewable energy, medical and devices, high-end consumer goods and Industry 4.0 initiatives (IoT, AI, Big Data, cybersecurity).
Malaysia scores highly in infrastructure and services, rule and enforceability of law, cost and ease of doing business and access to financing among its Asean peers. On the often comparison between Malaysia and Singapore, he said while Singapore ranks high on many of the investment criteria, its cost of doing business is one of the most expensive.
This has enable Malaysia to attract MNCs which give high weightage on cost consideration, he said.
On how Singapore is dealing with the pandemic compared with Malaysia, Yam said Singapore’s swift and systematic actions were complemented by a very good public communication strategy and its effective measures helped by its small land mass.
“Its highly literate populace, extensive and excellent infrastructure and communication network also help to disseminate and enlighten its people, ” he said.
With 33 million people, a larger land area including Sabah and Sarawak, Yam said Malaysia needs to find the optimum containment measures to control the spread.