KUALA LUMPUR: Although there may be some impact in the short term, Brexit’s medium-to-long-term effect on Malaysia’s trade and investment will be minimal, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed (pic).
“With our strong fundamentals and economic diversification, we are in a better position to face any uncertainty.
“Brexit will have minimal impact on FDIs (Foreign Direct Investments) as they are normally long-term in nature and the exchange rate volatility is usually priced into the FDI-related contracts.
“We believe Britain will continue to be a key player through its investments in Malaysia’s services sector, especially in banking and education,” he said in a statement.
Mustapa said that Malaysia would explore the possibility of having a separate Free Trade Agreement (FTA) with Britain as part of efforts to open up further business opportunities with the country.
Britain may no longer be part of the currently negotiated Malaysia-EU FTA.
Britain is Malaysia’s third largest trading partner in the EU and the fourth largest source of investment.
As at 2015, Malaysia has implemented 433 manufacturing projects with British investments valued at RM6.8bil.
Malaysia’s trade with Britain stood at RM16.45bil or 1.1% of Malaysia’s total trade in 2015, a growth of 9.5% from RM15.02bil the previous year.
Mustapa also said that British economy has been growing faster than most EU countries and its GDP grew by 2.3% compared with 1.9% for the EU last year. The Brexit vote will have minimal impact on Malaysia, says investPenang director Datuk Lee Kah Choon.
This was because Britain was not a top trading partner and also did not have a strong investment presence Malaysia, unlike other European countries like Germany, Switzerland and the Netherlands.
“The immediate knee-jerk reaction to the news is the depreciation of the pound. If this continues in the long-term, Britain will be attractive to Malaysians as a destination for property investment and education,” he said.
Golden Fresh Sdn Bhd chief executive officer Saw Hai Earn said it was likely that Britain would impose duties for imports from the EU.
GUH Holdings Bhd managing director Datuk Kenneth H’ng said Brexit would shake the economies of both parties.
“Should the pound or Euro weaken subsequently, investors owning assets in either place could see the values of their properties depreciate,” H’ng added.