Mida eyes more foreign investments

  • Economy
  • Friday, 12 Jun 2020

(L-R) Standard Chartered Malaysia MD and CEO Abrar A. Anwar and MIDA's CEO Datuk Azman Mahmud with the MOU agreement they signed, for the purpose of recharging the Malaysian economy.

PETALING JAYA: Malaysia will see a dip in total approved foreign investments this year and it will not match the RM207.9bil achieved in 2019 due to the Covid-19 pandemic.

However, it will rise and go back to historical levels, thanks to the government’s initiative with projects such as Penjana, said Malaysian Investment Authority (Mida) chief executive officer Datuk Azman Mahmud. Penjana is the RM35bil National Economic Recovery Plan announced by the government last Friday.

Last year, Malaysia recorded a 1.7% increase in approved investments from RM204.4bil in 2018 to RM207.9bil in 2019.

Foreign direct investments (FDIs) and domestic direct investments increased by 2.9% and 1.1% from RM80.1bil and RM124.2bil, respectively, in 2018.

Yesterday, Standard Chartered Malaysia signed a memorandum of understanding with Mida to attract targeted global investments into Malaysia, as an initiative to recharge the country’s economy.

In a statement, Mida and Standard Chartered said these sectors included high-value, high-technology and high-impact investments such as electrical and electronics, machinery and equipment, medical devices, aerospace, renewable energy and consumer technology.

When asked whether Mida had a target in terms of the value of investments it wished to attract, Azman said there is no specific target for now.

“We don’t have a specific target in terms of value but in terms of the players we want to attract, yes. We will be targeting the customers of Standard Chartered. There are many businesses that are now rationalising their supply chain. We are going to use this platform to make Malaysia more visible in attracting these businesses, ” Azman said at a briefing.

He added that the government has given a lot of support to provide investor confidence. “The commitment shown by the government, especially with the Penjana project, shows that Malaysia is serious in attracting investors. As it is, some 50% to 60% of foreign investors in Malaysia are expanding their existing businesses here. This goes to show that the investment environment here is good, ” said Azman.

Standard Chartered chief executive officer Abrar A. Anwar said there is a dynamism in the global economy now, where companies are diversifying away from their supply chain risk. This is due to the new normal as a result of the Covid-19 pandemic. “The country that can facilitate and help businesses set up their businesses will have the edge. Together with Mida, Standard Chartered is looking to be very proactive to promote Malaysia so that the country can stand out.

“We must communicate our fundamental strengths and be responsive to these investors needs, whether it is for capital, debt or expansion, ” said Abrar.

Malaysia’s electrical and electronics industry today accounts for 10% of the global back-end semiconductor output.

Mida currently has a pipeline of investment projects worth about RM37.8bil with many foreign electrical and electronics firms looking to relocate their businesses to the country to diversify production.

Azman said roughly half are new foreign investments while the remainder are expansion from existing foreign investors.

To encourage foreign investors to set up their businesses in Malaysia, the government is also offering a zero-tax rate for up to 15 years under its recently announced Short-Term Economic Recovery Plan.

The MoU, through Standard Chartered Malaysia’s local expertise and global reach, enables potential foreign investors to gain access to banking services and foreign direct investment advisory.

The bank will also be complementing Mida’s marketing and trade exchange initiatives such as trade and investment missions, conferences and roundtable meetings; including a series of webinars to globally connect investors.

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