PETALING JAYA: While Malaysia has proven to be an attractive destination for investments, National Recovery Council chairman Tan Sri Muhyiddin Yassin (file pic) said that there is still much room for improvement.
The former prime minister pointed out that 85.3% of the approved foreign direct investments (FDIs) in the first three quarters of 2021 came from just five countries.
These countries are Singapore, China, Austria, Japan and the Netherlands.
“More needs to be done to encourage foreign investments from other countries into Malaysia, and likewise, Malaysia to other countries in pursuit of untapped wealth potential,” he said.
Muhyiddin was speaking at the 2022 Malaysia Economic and Strategic Outlook Forum, which is a flagship event brought by KSI Strategic Institute for Asia Pacific.
Malaysia recorded total approved investments of RM177.8bil in manufacturing, services and primary sectors in the first three quarters of 2021, marking a 51.5% increase compared with the same period in 2020.
About 60% of the RM177.8bil approved investments are FDIs, which are valued at RM106.1bil.
Muhyiddin further stressed on the importance of the digital economy, if the country does not want investors to seek better opportunities elsewhere.
“Transformation needs to take place now, and if not, we risk being left behind, especially by our colleagues in neighbouring countries and beyond the region.
“Malaysians must not be too comfortable and take things for granted,” he said.
He added that businesses need to voluntarily implement environmental, social and governance standards as a regular part of their operations and at every level of the organisation.
“This way, alongside caring for the environment, best practice in governance and at the same time caring for our fellow man will serve as a more ‘human’ factor as we go about our day-to-day routine, making it more purposeful,” according to Muhyiddin.
In a panel discussion during the Malaysia Economic and Strategic Outlook Forum, speakers spoke about the country’s outlook this year, including on the risks and opportunities ahead.
Malaysia University of Science and Technology professor Dr Geoffrey Williams forecast the country’s gross domestic product (GDP) growth to be about 3.5% in 2022, much lower than the consensus estimate.
In contrast, the government had projected a growth of 5.5% to 6.5% this year.
“In 2023, we see the economy growing at 4.3%, the new potential growth rate for Malaysia post-Covid-19.
“Employment is expected to slowly improve but only partially being re-absorbed in 2022.
“High underemployment around 20% may now be structural,” he said.
Williams further added that the Malaysian GDP is not likely to return to pre-Covid-19 fourth-quarter 2019 level until the second quarter of 2023.
Meanwhile, Khazanah Research Institute director of research Dr Suraya Ismail said the country must not be entirely focused on the GDP growth alone, but also on the wellbeing of the society.
“The accumulation of wealth in a country must be translated into tangible benefits felt by the majority of the citizens – by expanding incomes and raising the standard of living.
“We need to spread wealth as a matter of economic consequence, because reducing the economic base will ultimately upset consumption patterns.
“Demand for goods and services will require a growing mass of consumers rather than dependent on a select few,” she said.
Another speaker, Economic Action Council executive director Tan Sri Dr Noor Azlan Ghazali pointed out that Malaysia’s economic complexity remains stagnant while regional economies are catching up.
“While our economic growth macro-wise is going up, the economy is falling behind.
“There is also a serious problem of not being able to produce the right jobs. We have a high skill-related underemployment.
“The economy is still dependent on old kinds of jobs,” Noor Azlan said.