Malaysia expects foreign investment to increase
MALAYSIA: Malaysia's affirmative action policies are not a
hindrance to foreign investment, Second Finance Minister Nor Mohamed
Yakcop said on Thursday, adding that he expected foreign investment to
Nor Mohamed did not give any figures, but Trade Minister Rafidah Aziz
said this month the country had received 13.5 billion ringgit ($3.7
billion) in foreign direct investment applications in the first nine
months of the year.
Fears that foreign investors might be deterred by Malaysia's
affirmative action policies that benefit the country's Malay ethnic
majority were overdone, Nor Mohamed told reporters at a conference in
the Malaysian capital.
"We had the New Economic Policy for 1970 and foreign investment has
grown and there were periods when it was strong double digits," he
added, in a reference to the package of measures that launched the
affirmative action policy.
"It has never been a hindrance before. Why should it be a hindrance
Foreign direct investment into Malaysia fell 14 percent to $3.97
billion last year, and the country dropped four places to rank sixth out
of 10 Southeast Asian countries in attracting foreigners, United Nations
The decline came amid a 45 percent jump in foreign direct investment
into Southeast Asia last year and marked the first time that Malaysia
fell behind less-developed neighbour Indonesia.
Foreign direct investment inflows into Malaysia have been almost
stagnant since 1990, the U.N. data show.
Nor Mohamed said he expected foreign investment to increase.
"We are very confident that as the economy grows, as the economy
develops and the growth momentum is certainly there, the foreigners more
and more find this economy interesting and will continue to invest in
Malaysia," he said.
"We provide a great deal of comfort and benefit to the foreign
investors. We have always been a very friendly government and we have
gone out of the way to create a friendly environment and we will
continue to do whatever we can to attract foreign investment."
Malaysia depends heavily on foreign money to drive its manufacturing
industry and services sector. Falling foreign investment and complaints
about red tape and delays have thus jolted the government into action.
In September, it set up a cabinet team led by Deputy Prime Minister
Najib Razak to speed approval for foreign investment projects involving
large and technology-intensive industries.
Last month, Najib said the new team had approved high-tech projects
worth $11 billion over five years involving two local firms and a
foreign one, but gave no project details.