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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 increase.

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 now?"

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 data show.

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.


Gamin Gamata - Presidential Community & Welfare Service
Sri Lanka

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