‘Not true FDI outflow more than inflow’


  • Nation
  • Friday, 31 Oct 2008

IT’S NOT true that Malaysia’s foreign direct investments (FDI) outflow exceeded inflow, said International Trade and Industry Minister Tan Sri Muhyiddin Yassin.

“The FDI outflow is actually cross-border investments carried out by Malaysian companies who took the opportunity to invest overseas. This is a positive development,” he said.

The World Investments Report 2008 published by Unctad on Sept 24 reported a 40% increase in FDI inflow for Malaysia to US$8.4bil (RM29.4bil) compared with US$6bil last year, he said.

“The increase is parallel with the increase of FDI inflow to Asean,” he said when winding up the debate on the Budget.

Robust regional economic development, improving investment environment and strengthening regional integration were main factors that contributed to the FDI increase, he said.

“Malaysia recorded encouraging achievements in cross-border investments for the first time and this is in line with the Industrial Master Plan 3 (IMP3) that encourages foreign investments,” said Muhyiddin.

According to Bank Negara’s statistics, RM31.9bil out of RM42.4bil recorded in 2007 was invested in sectors such as manufacturing, finance, insurance, property, investment and trade services as well as mining and quarrying, he said.

To questions from MPs on Malaysia’s drop in competitiveness compared with Thailand, China and Vietnam in drawing more foreign investments into the country, Muhyiddin said the Institute Management of Development in the World Competitiveness Yearbook 2008 revealed that Malaysia’s competitiveness among 55 economies rose to 19th position compared with 23rd last year.

Malaysia was ranked 8th for economic achievements, government efficiency (placed 19th), business efficiency (14), and infrastructure (25), he said.

Based on the report, Malaysia’s ranking was better than Thailand’s 27, while China ranked 17, said Muhyiddin.

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