PETALING JAYA: Cutting red tape and helping investors set up operations smoothly will be crucial to ensure Malaysia can maximise spillover benefits from a fresh wave of foreign investments, say economists.
Bank Muamalat chief economist Dr Mohd Afzanizam Abdul Rashid said it is essential for investment promotion agencies at federal and state levels to be more proactive in meeting investors’ needs.
This includes talent requirements, location and adherence to rules and regulations set by federal, state and local authorities.
“The last thing we need is the bureaucracies that will affect investors and businesses’ experience in setting up across respective states and areas,” he said.
Mohd Afzanizam noted that the announcements by various foreign companies to shift to Malaysia are a testament that the country offers a strong value proposition to foreign investors.
This includes its talent pool availability, decent infrastructure, robust financial system that adheres to international standards, and its peaceful and moderate society.
“Beyond employment opportunities for locals, the construction and properties, telecommunication, energy, water and financial services are some of the areas that will have an immediate spillover,” he said.
Sunway University economics professor Yeah Kim Leng said the Malaysian Investment Development Agency could facilitate manpower recruitment and talent matching, which would also address unemployment and underemployment.
Other necessary support, Yeah said, includes expediting permits and regulatory approvals that contribute to investor satisfaction, smooth operations and enhanced operational efficiency.
He added that capital investment, business spending and employment generated contribute directly to the country’s gross domestic product in the year where capital inflow and business expenditure are recorded.
“Subsequently, the new or expanded capacity contributes to annual increases in industrial output and national income,” he said.
Yeah said the positive economic impact will be felt immediately if the investment involves upgrading or expanding existing production capacities and headcounts.
“Greenfield investments, however, will take between one and three years for new facilities and local supply chains to be established,” he said.
A greenfield investment is when a company builds a brand-new venture in another country without relying on any existing structures.
