KUALA LUMPUR: Malaysia recorded RM164bil in approved investments through 4,599 projects in the manufacturing, services and primary sectors in 2020, with China as the top investor, according to the Malaysian Investment Development Authority’s (Mida) data.
Senior Minister and Minister of International Trade and Industry, Datuk Seri Mohamed Azmin Ali, said these investments are expected to create 114,673 new jobs in various sectors of the economy once implemented.
However, the investments were lower in contrast with 2019 where 5,287 projects with investments of RM211.4bil were approved as the services and primary sectors were directly impacted by declines in global demands due to the pandemic and the implementation of the movement control order (MCO).
According to Mida, in 2020, domestic direct investments (DDIs) made up 60.9% (RM99.8bil) of total approved investments, while foreign direct investments (FDIs) made up the remaining RM64.2bil (39.1%).
The manufacturing sector recorded the highest amount of investments in 2020 and China was the top foreign investor in the sector.
The manufacturing sector saw investments of RM91.3bil, followed by the services sector at RM66.7bil and the primary sector with RM6bil.
China, at RM18.1bil, was the top source of FDI, followed by Singapore (RM10bil) and the Netherlands (RM7bil). Together, they accounted for more than half (54.8%) of the total approved FDI for the year.
In terms of location, Mida said Selangor (RM38.7bil) recorded the highest investments approved last year, followed by Sabah (RM21bil), Sarawak (RM19.6bil), Kuala Lumpur (RM17.1bil) and Penang (RM16bil). These five states alone contributed more than 60% of the total approved investments for 2020.
According to Mida, the manufacturing sector has the most significant multiplier effect on the nation’s activities and growth and it will continue to be the mainstay of the economy. This includes forward and backward linkages, the development of cluster industries, the transfer of new technologies and skills development.
Approved investments for the manufacturing sector increased 10.3% to RM91.3bil in 2020 from 2019. The number of manufacturing projects approved also increased by 6.2% to 1,049 projects in 2020.
These projects are expected to create new jobs for more than 80,000 people, with 35.8% of these in managerial, technical and supervisory positions.
FDI accounted for 62% (RM56.6bil) of total approved investments in the manufacturing sector, while domestic investments constituted the remaining 38% (RM34.7bil). Notably, DDI surged by 22.6% while FDI increased by 3.9% compared to 2019 despite the challenging times.
“Against the backdrop of the challenges due to the pandemic, new project investments, accounting for 66.9% of the total manufacturing projects approved, were successfully secured in 2020.
“This is testament to the International Trade and Industry Ministry’s (Miti) and Mida’s efforts to ensure business continuity and investors’ friendly policies are in place to enable investors to have the confidence to establish new operations in the country, ” said Azmin.
Moreover, in line with Malaysia’s move towards sophisticated technology industries, capital intensive projects which involve advanced technology and skilled workforce dominated the manufacturing landscape.
In terms of top-performing industries in 2020, the electrical and electronics (RM15.6bil), petroleum products including petrochemicals (RM15.5bil), basic metal products (RM14.4bil), paper, printing and publishing (RM7.8bil), machinery and equipment (RM7.1bil), chemicals and chemical products (RM6.3bil), rubber products (RM4.3 billion) as well as transport technology (RM3.9bil) contributed nearly 90% of the total approved investments in the manufacturing sector last year.
Meanwhile, in 2020, Malaysia attracted a total of RM66.7bil in approved investments for the services sector through 3,527 approved projects, accounting for the 40.7% of the total approved investments in the economy. These approved services projects are expected to create 33,652 jobs to the economy.
DDI dominated the total approved investments in the services sector, contributing RM60.2bil (90.3%), where else FDI represented the remaining RM6.5bil.