To propel the Malaysian economy to a high level amid uncertainty in the global economic landscape, investment in infrastructure is needed to attract long term foreign investment as this will have spillover effects on the other economic sectors, economists say.

Bank Muamalat (M) Bhd chief economist Mohd Afzanizam Abdul Rashid said infrastructure investment is important to ensure the inflows of long term foreign investment.

Furthermore, he says investing in infrastructure also has positive spillover effects to other economic sectors.

“Infrastructure is very capital intensive and it’s project based.

“It would easily create excitement among investors as there will be various players to be involved in the projects.

“To some degree, it would be a source of attraction just like in Indonesia when they decide to shift the capital city to Kalimantan i.e. the Ibukota Nusantara. It’s about a spark but it has to be realistic and credible,” he told StarBiz.

He said the local economy has yet to reach the advanced economic stage.

Therefore, he said investing in key infrastructure such as expressways, rail related projects, telecommunication, renewable energy (RE) and electric vehicle (EV) charging stations and many more are critical for improving the growth potential for the country’s economy.

Afzanizam said infrastructure projects would help to increase the country’s productivity level which, in turn, would translate into higher income as there would be more skilled labour to be employed.

He said, for example, the Mass Rapid Transit projects have garnered a lot of interest in the Malaysian market as they are expected to have spillover effects on other sectors.

Similarly, projects like the east coast rail line which is supposed to focus on the transportation of cargo between Kuantan port and Port Klang.

The spillover effects, he said would be felt in the construction, building material and services sectors like the financial, architecture and engineering consulting.

“These projects become a spark which has resulted in strong interest among foreign investors in the Malaysian capital markets. And we saw the foreign ownership in listed shares at one time was in excess of 20% for considerable periods,” he noted.

Malaysia’s gross domestic product (GDP) grew 5.8% in the second quarter from a year ago, according to advance estimates released by the Statistics Department.

This follows a 4.2% expansion seen in the first quarter of this year, which reflects the economy is on track, and possibly to surpass the government’s projection of between 4% and 5% economic growth this year.

Juwai IQI global chief economist Shan Saeed said an important economic strategy in the modern era is infrastructure. He added global investors have found a new way of analysing the country’s ability to invest in infrastructure, the new asset class for sustainable growth parameters.

“All the governments basically, among others, are focusing on reducing debt and improving their fiscal side of the balance sheet (fiscal discipline) to entice the global investors for long term investments.

“Countries like China, Indonesia, Australia, Vietnam and India are investing heavily into infrastructure and treating it as an asset class where pension, endowments and institutional investors can park funds to get solid returns.

“Asean needs US$1.2 trillion, Africa needs US$2.5 trillion in infrastructure investment in the next three to five years and that makes the regions very attractive for global smart and sophisticated investors,” he said.

Shan said overall Malaysia has done well in terms of maintaining macroeconomic stability and focusing on infrastructure investment.

Highlighting the importance of infrastructure investment, he said such investment would send positive signal to the market, adding that debt reduction, fiscal management and prudent monetary policy play the groundwork in the macro equation.

“We at Juwai IQI project that Malaysia should be able to achieve a GDP growth of between 4.3% and 4.8% in 2024. One of the Nobel laureates, the late Robert Fogel, advocated about infrastructure in 1964 and how it has a positive impact on the GDP growth equation.

“Now infrastructure is the new asset class for the governments to focus upon to attract global investors. The Belt and Road Initiative is a good live example in the modern era for global connectivity, lifting masses out of poverty and offering good dividends for economic growth in the long run.

“In my opinion, Asean would become the growth story for the global economy in the next three to five years due to its demographics (young population), strong consumption pattern and above all economic stability at the macro level,” Shan said.

On the measures needed to undertake firm investments into infrastructure, Afzanizam said the government needs to strategically arrange the narratives so that the investors would clearly see the end game.

“The end game for investing in infrastructure is to be urbanised without compromising the sustainable features. So, this would include how RE and EV would come into the picture. Another end game would probably be on improving connectivity between the two nations , Singapore and Malaysia, such as the Kuala Lumpur-Singapore High Speed Rail project.

“Energy security could also be the end state as Sarawak for example is aiming to export to the regional market. The narratives would allow the investors to connect the dots and would be able to appreciate which ultimately would make them more convinced to invest in Malaysia.

“Establishing a clear and credible storyline of our economic development is crucial in attracting the foreign capital. It’s like a sales pitch but with a broader scale as we are looking at the country’s development and endeavor to transition towards an advanced nation,” he added.

Source: The Star

Infra investment key to sustaining growth, FDI

Sabah is full of investment opportunities, according to a business delegation from Wuhan, China.

The delegates, who were in Sabah for business exploration, plan to revisit the State to seek more cooperation and investment opportunities.

They will bring China’s excellent educational resources, courses, teachers, and equipment to Sabah.

The aim is to cultivate Malaysian students, familiarize them with Chinese culture and technology, help them secure higher wages in China enterprises in Malaysia, and increase their employment rate.

The Wuhan business delegation whose visit to Sabah was hosted and arranged by the Sabah China Chamber of Commerce (SCCC), sees potential in various fields such as agriculture, seeding, human resource education and capital investment.

They believe Sabah is a place full of opportunities and plan to revisit to explore more cooperation opportunities.

The delegates included Cai Qin, Chairman of Wuhan Junyijia Property Management Co., Ltd.; Xie Canhui, General Manager of Wuhan Tianhong Exhibition Co., Ltd.; Li Yuanyuan, Partner of Mingde Capital (Wuhan) Operation Center; Miiya, Business Director of Shenzhen UFO Power Technology Co., Ltd. (Malaysia); Shelly, Marketing Manager of Shenzhen UFO Power Technology Co., Ltd. (Malaysia); Deng Changjing, Operations Director of Jingrui Technology Cross-border E-commerce Co., Ltd.; and accompanying staff Zhou Lingzi.

With the assistance and arrangements of Datuk Frankie Liew, President of the SCCC, they recently paid courtesy visits to Datuk Dr Roland Chia, Political Secretary to the Chief Minister of Sabah, and Datuk Frankie Poon Ming Fung, Chairman of Sabah Development Bhd, to express their views on Sabah after this visit.

“In view of the lack of information about Malaysia in Hubei, Wuhan, we initially had no knowledge of East Malaysia and West Malaysia,” said Li Yuanyuan.

“After Datuk Frankie Liew and others visited us to promote Sabah-China cooperation in May this year, we realized that Sabah also has excellent talents and resources, which led to the planning of this study tour.

“After our exchanges here, we found that although the Sabah market has certain limitations, Hubei, Wuhan might be 10 to 15 years ahead of Sabah in economic development. “However, from the perspective of investors, Sabah is a place full of opportunities. We definitely will revisit multiple times in the future,” Li Yuanyuan added.

Cai Qin expressed gratitude to Liew for leading the delegation and providing strong support during this period.

She revealed that her company focuses on human resources services for Chinese enterprises, including human resource education.

During this visit, they also discussed cooperation with educational institutions such as University Malaysia Sabah (UMS), Sabah Institute of Arts, and SM Tshung Tsin.

“We will bring China’s excellent educational resources, courses, teachers and equipment to Sabah in the future, collaborating with vocational and technical colleges in Sabah to jointly cultivate Malaysian students.

This will help them understand Chinese culture and technology, secure higher wages in Chinese enterprises in Malaysia, and improve their employment rate,” said Cai Qin.

During the trip, the Wuhan business delegation, arranged by Liew, also visited the Kota Kinabalu Hardware Association.

Cai Qin mentioned that after understanding the needs of the hardware industry in Sabah, they plan to bring hardware industry players from Wuhan for future visits and exchanges.

Source: Borneo Post

Sabah full of investment opportunities – Wuhan delegates

Effective collaboration between Malaysia and Japan is essential to driving sustainable economic growth and development, said Prime Minister Anwar Ibrahim.

Anwar said that in this context, Malaysia appreciates the critical role played by Japan in its early industrialisation through large-scale investments and technology inflows.

“The firm and lasting bond between Malaysia and Japan is most evident as Japan continues to be one of Malaysia’s largest trading partners, demonstrating a noteworthy relationship that has endured the challenges of the global pandemic and its lockdowns, as well as geopolitical tensions and conflicts,” he said in his keynote speech at the 41st Malaysia-Japan Economic Association (MAJECA)-Japan-Malaysia Economic Association (Jameca) joint conference here today.

Deputy Secretary General (Industry) of the Ministry of Investment, Trade and Industry, Datuk Hanafi Sakri, read the text of the prime minister’s speech.

Anwar said that on the investment front, Japan has been one of Malaysia’s top foreign investment sources in terms of implemented manufacturing projects since the 1980s.

“As of March 2024, a total of 3,730 manufacturing projects have been approved with total investments worth RM138.23 billion, mainly in the electrical and electronics, chemicals and chemical products and non-metallic mineral sectors, creating a total of 482,381 employment in Malaysia,” he said.

The prime minister said it is heartening to observe the sustained interest and appetite from Japanese investors towards Malaysia as the country continues to welcome increasing foreign investments from Japan.

In this regard, he hoped that the Malaysia-Japan relations would continue to expand and bring prosperity to both countries and the region.

“Our businesses assume a pivotal role in driving economic growth, fostering innovation, and creating employment opportunities. It is through their concerted endeavours that we can unlock the full potential of our bilateral relations,” he said.

Anwar said that as Malaysia prepares to assume the chairmanship of Asean next year, there is a proposal to inculcate an inclusive approach to common global problems while championing inclusivity and interconnectivity within Asean, Asia, and the rest of the world.

“In 2022, we celebrated the 40th anniversary of the Look East Policy introduced by Malaysia in 1982, which over time has successfully strengthened cooperation between Malaysia and Japan across various sectors, including the economic, educational, cultural, and tourism domains.

“Although substantial progress has been made, there remain unexplored opportunities for further collaboration for both countries,” he added.

Source: Bernama

PM Anwar: Strong Malaysia-Japan ties key to sustainable economic growth

Malaysia’s first free trade agreement (FTA) with a member of the Gulf Cooperation Council (GCC) is expected to be signed in two months, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The minister said the first Comprehensive Economic Partnership Agreement (CEPA) would pave the way for more FTAs with the GCC countries.

“From today, it takes two months for agencies to do the legal scrubbing,“ he told Bernama after the Economic & Public Finance Conference organised by the National Institute of Public Administration.

Earlier in his speech, Tengku Zafrul said he and his UAE counterpart achieved conclusions on the CEPA today.

“In two months, both prime ministers will witness the final signing,“ he said.

Malaysia will be the fifth nation, and the third in Southeast Asia, to sign a CEPA with UAE.

Source: Bernama

Malaysia-UAE CEPA on track for year-end enforcement – Tengku Zafrul

Services, manufacturing and agriculture major contributors to estimated 5.8% expansion in Q2

Malaysia’s advance GDP estimates indicate a 5.8% expansion in the second quarter of 2024, an increase from 4.2% in the preceding quarter, said Chief Statistician Malaysia, Datuk Seri Dr Mohd Uzir Mahidin.

This growth, he added was propelled by the services, manufacturing and agriculture sectors. Overall, he said, the economy grew by 5% in the first half of 2024, compared to 4.1% during the same period in 2023.

For the monthly economic indicators performance, the Industrial Production Index (IPI) in May 2024 recorded a year-on-year growth of 2.4%, moderated from 6.1% in April 2024. This growth was mainly driven by the manufacturing sector, which grew by 4.6% (April 2024: 4.9%) and a 4.2% rise in electricity output (April 2024:7.8%).

Furthermore, the mining sector declined to 6.9% impacted by a double-digit decrease in natural gas production at negative 10.3% and a drop of 1.9% in the crude oil & condensate output. Simultaneously, the manufacturing sector’s sales increased by 5.5% year-on-year to RM154.9 billion in May 2024, following a 5.7% growth in the previous month. This growth was largely supported by double-digit increases in the electrical & electronics products sub-sector (12.2%), the non-metallic mineral products, basic metal & fabricated metal products subsector (8.9%) and the food, beverages & tobacco sub-sector (7.7%).

Malaysia’s wholesale and retail trade sector achieved a sales value of RM147.9 billion in May 2024, marking a 7.1% year-on-year growth driven by all sub-sectors: retail trade grew by 8.7% to RM64 billion, wholesale trade rose by 4.7% to RM65.1 billion and motor vehicles registered 10.5% increase to RM18.8 billion. The volume index for the wholesale and retail trade sector increased by 5.7% year-on-year, with motor vehicles up by 9.6%, retail trade by 6.8% and wholesale trade by 3.4%.

Assessing the price levels, Malaysia’s inflation rate rose to 2% in May 2024, with the index reaching 132.8, compared to 130.2 in the same month the previous year. This increase was mainly driven by higher costs in housing, water, electricity, gas & other fuels (3.2%); restaurant & accommodation services (3.2%); and personal care, social protection & miscellaneous goods & services (3%). The inflation rate remained at 2% in June 2024, with the index at 133, compared to 130.4 in June 2023.

Malaysia’s Producer Price Index (PPI) in May 2024 increased by 1.4% year-on year, as against 1.9% in the previous month, with the mining sector rising by 6.6% (April 2024: 10%) and the agriculture, forestry & fishing sector increased by 1.3% (April 2024: 5.4%).

Concurrently, the manufacturing sector grew by 1% (April 2024: 0.8%), the water supply index surged by 8.7%, and the electricity & gas supply index rose by 1.5%.

In June 2024, the PPI went up by 1.6%.

As to the external sector, Malaysia’s merchandise exports in May 2024 maintained a positive trajectory, growing by 7.3% year-on-year, from RM119.5 billion to RM128.2 billion. Imports surged by 13.8% to RM118.1 billion, compared to RM103.8 billion in May 2023. As a result, the trade balance fell by 35.4% year-on-year to RM10.1 billion. Total trade reached RM237.8 billion in June 2024, reflecting 8.7% growth compared to the same month the previous year. Imports increased by 17.8% to RM111.8 billion, while exports rose by 1.7% to RM126 billion, leading to a trade balance surplus of RM14.3 billion.

Malaysia’s labour market scenario in May 2024, the labour force increased by 1.7%, reaching 17.15 million persons, up from 16.86 million in May 2023. The number of employed persons rose by 1.8% to 16.58 million, compared to 16.28 million in the previous year.

Accordingly, the Labour Force Participation Rate (LFPR) climbed by 0.3 percentage points to 70.3%, from 70% in May 2023, while the unemployment rate remained steady at 3.3%, the same rate as the previous month.

Mohd Uzir Mahidin stated, “Malaysia’s Leading Index (LI) demonstrated robust growth for six consecutive months, increasing by 3.8% year-on-year to 114.2 points in May 2024. The smoothed growth rate of the LI consistently remained above 100 points, signalling a resilient economy bolstered by rising tourism and strong external demand.”

Source: The Sun

Malaysia’s economic growth propelled by three sectors

Malaysia could do more in integrating behavioural insights (BI) into public policy by examining ways to attract investments, boost international trade and advance industrial reforms, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said Malaysia started integrating BI into public policy in 2020 and has been working hard to improve policies to benefit the business community, investors as well as fellow Malaysians.

“The key question is this: How can we leverage BI to improve policies and good regulatory practices to enhance our supply chain and create a robust industrial talent pipeline to drive higher productivity and global competitiveness?” he said in his opening remarks at the National Conference on Behavioural Insights 2024 today.

The minister said BI could transform good governance by simplifying procedures and making forms and documentation more user-friendly through automation.

“In short, making government operations more efficient,” he added.

Tengku Zafrul said this streamlines operational requirements, reduces the burden on businesses and promotes compliance, which frees up resources for innovation and better services.

“Secondly, in education and industrial skills development, we can provide timely reminders about educational opportunities and deadlines to improve reskilling or upskilling efforts,” he said.

He noted that the Kerian Integrated Green Industrial Park project, which has already been implemented, will also have “greener” features such as renewable energy and sustainable industrial waste recycling as its “default settings.”

“This is how leveraging BI will nudge industries towards supporting our net zero goal, as stipulated by the New Industrial Master Plan 2030 (NIMP 2030),” he said.

He also said that it is crucial to include BI in achieving the 12th Malaysia Plan national productivity growth target of 3.7 per cent.

“By leveraging BI, we can better understand the underlying factors influencing productivity at both individual and organisational levels, enabling the creation of more targeted and effective policies,” he said.

In his view, BI is an approach that could also significantly boost government efficiency, particularly by utilising the right tools, techniques and technology that must evolve with the times.

“Deployed correctly across public services, these will generate lowcost and economical interventions to improve service outcomes,” he said.

Tengku Zafrul cited the Kulim initiatives as among an example of BI-based enhanced efficiency, saying that construction of factories has been accelerated from 36 months to just 10 months.

“This increased investments by RM24.56 billion or almost 92 per cent (91.64 per cent); enhanced revenue by RM77 million or 105 per cent; and created an additional 7,225 or over 75 per cent (75.24 per cent) more job opportunities,” he said.

The minister also noted the Kulai initiative, which saw the construction timeline being shortened to just 14 months.

This has significantly boosted investment by RM40.7 billion or 171 per cent, generated RM161 million or 80 per cent more revenue, and created up to 7,000 or 112 per cent more job opportunities, he added.

Source: Bernama

Use Behavioural Insights To Improve Policies, Good Regulatory Practices, SaysTengku Zafrul

Penang has received increasing inquiries from Chinese companies seeking investment opportunities over the past year.

Penang Chief Minister Chow Kon Yeow said this surge reflects growing confidence in the region’s economic potential and business-friendly environment.

“Many Chinese companies are looking to invest in Southeast Asia, including Penang and Malaysia. At the moment, we do not see many successful investments yet, but we have received a lot of inquiries.

“It is possible that companies in China are cautious about bringing their investments outside their home country as it involves capital outflows,” Chow said at a press conference announcing the 2024 Asia Pacific Semiconductor Summit and Expo (APSSE) here on Monday.

The APSSE will take place from Oct 16 to 18 at the Spice Convention Centre.

The event is hosted by the Malaysia Semiconductor Industry Association (MSIA) in strategic partnership with the China Electronic Production Equipment Industry Association (CEPEA) and supported by the Penang government.

Meanwhile, MSIA president Datuk Seri Wong Siew Hai said there may be a surge in inquiries in Penang and Malaysia due to the state’s existing ecosystem.

He said there are many companies in China in technology sub-sectors not present in Malaysia.

“We want companies that can add value to us and strengthen our ecosystem, and China has a lot of such technology sub-sectors that can enhance our ecosystem.

“These sub-sectors include materials, interface, semiconductor and insulation layers. These sub-sectors will be able to fill in the gaps in the local supply chain,” he said.

Wong said Chinese companies are keen on investing in Penang and Malaysia in many ways, including collaborations, co-investing, and even outsourcing.

He said the CEPEA decided to hold the APSSE in Penang after surveying Malaysia, and due to the significant presence of the electrical and electronics, and semiconductor industries in Penang.

He said the conference will be a crucial platform for stakeholders, not only for Penang, but also Malaysia.

“They want to hold it here to broadcast to the world about China’s interests and to show their presence in the Asia-Pacific. We hope that more collaborations will result from it, with a spillover effect into the ecosystem,” he said.

CEPEA branch secretary general Steven Huang agreed that Chinese companies are interested in collaborating and investing in Malaysia and Penang.

He said the CEPEA hopes to promote friendship and mutual collaboration between China and Malaysia as well as with other countries in the Asia-Pacific region in the upcoming APPSE.

“This is the first time that the CEPEA is partnering with the MSIA with the support of the Penang government to hold the two-day international conference,” he added.

Source: Bernama

More Chinese companies keen on investing in Penang, says CM

Malaysia has the potential to regain its status as an Asian Tiger due to its strength in emerging economic sectors, said Economy Minister Rafizi Ramli.

Rafizi said this hinged on the country’s ability to thrive in future economic sectors, particularly sustainable energy, rather than relying on gross domestic product measurements.

He said Malaysia’s achievement in data centre development, as well as the potential for expansion in the electronics and chip industries, were critical aspects in revitalising the economy.

“Our initiatives to support these data centres are strategically aligned with the anticipated dominance of artificial intelligence and chip technologies in the global landscape.

“Considering these factors, Malaysia possesses great potential (to reclaim Asian Tiger status,” he said at the launch of Economy Census 2023 here today.

Rafizi added that the nation would reap substantial economic gains if it efficiently leveraged new technology sectors.

He said the international community, including major investors, was closely watching Malaysia’s potential to lead in economic development.

“Therefore, I believe Malaysia’s perception and prospects as an Asian Tiger must be grounded in the future economy.

“If we can successfully leverage these advantages, Malaysia will undoubtedly be far ahead of other regional and global nations.”

Yesterday, Finance Minister II Datuk Seri Hamzah Azizan said a positive outlook from analysts and rating agencies, supported by encouraging economic figures, signalled that Malaysia was making great strides to reclaim its Asian Tiger status.

Hamzah said he received positive feedback regarding Malaysia’s strong economic performance during meetings with investors and analysts, who expressed optimism about the country’s future growth.

The term “Asian Tigers” was used in the 1980s and 1990s to describe the rapidly growing economies of Taiwan, South Korea, Singapore and Hong Kong.

Malaysia was poised to be the fifth Asian Tiger, but the 1997 Asian financial crisis derailed the country’s economic growth.

Source: NST

Rafizi: Malaysia has potential to reclaim Asian Tiger status

Sarawak has recorded a total approved investment of RM10.4 billion in the first half of 2024, said Deputy Premier Datuk Amar Awang Tengah Ali Hasan.

He said these investments, including those approved by the Industrial Coordination Committee, comprised foreign direct investment (FDI) amounting to RM5.7 billion and domestic direct investment (DDI) worth RM4.7 billion.

“This is what we have recorded in Sarawak for the months of January to June this year,” he said at a press conference after the Joint Committee on Industrial Coordination (JBI) meeting between the federal Ministry of Investment, Trade and Industry (Miti) and the Sarawak government at leading hotel here today.

The meeting co-chaired by Awang Tengah and Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz provided an opportunity to discuss joint strategies and approaches to coordinate trade, investment and industrial development in Sarawak.

Meanwhile, Tengku Zafrul said his Ministry will soon announce the investment performance in the first six months for Malaysia.

He nonetheless pointed out that based on data from January to March 2024, Malaysia has recorded a 13 per cent increase in investment value compared to the same period last year.

“We only have the data for the first three months which showed growth of 13 per cent compared to same period of last year. It shows good improvement.

“For the second quarter, we will announce after we receive the data. Usually, in September,” he added.

Source: Borneo Post

Awang Tengah: Sarawak records total approved investment of RM10.4b in H1 2024

South Africa, like Russia and other key fast-developing countries, is keen for Malaysia to join Brics soon, given Putrajaya’s strong and consistent stand in supporting the interests of developing nations on major international matters.

South Africa’s High Commissioner to Malaysia Dave Malcomson said as a proponent of the South-South movement, Malaysia’s role in Brics would be further enhanced as 2025 Asean chair and with its prominence in the Non-Aligned Movement as well as Organisation of Islamic Conference countries.

He said with South Africa itself holding the G20 presidency, both countries could lead other nations in taking a collective stance in areas such as reforming institutions of global governance and propagating the interests of developing countries.

“There’s definitely a lot of work that Malaysia and South Africa can do together, which is why the more representative and inclusive Brics is, the better it is,” he said on Bernama TV last week.

Prime Minister Datuk Seri Anwar Ibrahim said yesterday that Malaysia has sent an application to the grouping’s current president, which is Russia, to join Brics.

Malcomson said the media has a narrative that some countries might not be too happy with Malaysia joining Brics.

“I don’t necessarily stand by that myself,” he said.

“Brics is not against anything (and) we’ve not been set up to counter anything. We are not in the business of making binary choices of either with us or against us. We can be friends with all.

“But as long as we maintain a strong strategic relationship with all our partners, be it the United States or the European Union, we don’t foresee an issue.”

Brics not about de-dollarisation

Malaysia must be careful not to buy into such a media hype, which also includes the much-talked about the untrue narrative linking Brics to de-dollarisation, he said.

“You won’t find the word ‘de-dollarisation’ in the Brics document,” he said.

When the Brics New Development Bank was set up, he said, its first president did a study on loans for infrastructure projects over the long term.

The study revealed that borrowers were paying a major proportion of the costs servicing their (currency) fluctuations relative to the value of the United States dollar because the loans were dollar-based.

They were paying for the appreciation of the dollar versus their own currencies rather than purely paying back the cost of the loan.

The United States currency has been appreciating sharply against regional currencies in recent years, no thanks to the Federal Reserve raising interest rates to combat inflation.

This has raised the costs of imports and loans which are transacted or denominated in the greenback.

“What we’ve tried to do in Brics, particularly through the New Development Bank, is raise local bonds so we use our national currencies to service loans as well to pay for trade and investments.”

Joining forces to tackle global issues

He said it is not really a new idea, as the former Soviet Union and India used to trade in their own national currencies.

This was an idea Prime Minister Datuk Seri Anwar Ibrahim had been alluding to within Asean.

If Southeast Asian economies were to use their national currencies, it would be to their own advantage as it would lower the risk of currency fluctuations.

They could also join forces in the ongoing debate on climate change, dealing with pandemics and international health crises, and cross-border crime.

These are issues which cannot be dealt with individually but collectively, Malcomson said.

Besides Malaysia’s impending inclusion, Thailand has applied to join Brics, while other Asean countries have shown interest in the bloc.

He said Brics could also help move forward the Indian Ocean Rim Association, which aims to strengthen regional cooperation and sustainable development within the Indian Ocean region, of which Malaysia is a part.

Anwar has expressed keen interest for Malaysia to join Brics, whose original members were Brazil, Russia, India, and China in 2009, and South Africa in 2010.

Anwar said Malaysia’s priority in joining up is to reinforce trade and investment relations and expand its business linkages globally, a move designed to benefit traders, investors and the business community.

Brics won’t shift global power away from West

One of the advantages of Brics is that countries can make collective decisions on key issues of the day ahead of big meetings such as in the United Nations, Malcomson said.

“If it does join Brics, we can work with Malaysia to develop some common positions in reforming the international financial and political architecture,” he said.

He also said global institutions like the United Nations must reflect the shift in global power as there are new economic powers and new political powers.

As for traditional western powers, Malcomson questioned why they should be the ones leading global change and setting the rules.

“Brics has just been an after-reflection of that change (and) I don’t think that it’s necessarily been the driving force of that change (as) that has been happening anyway.

“We don’t see Brics shifting global power away from western countries,” he said.

Brics’ other members include Iran, Egypt, Ethiopia, and the United Arab Emirates.

Anwar had said that cumulatively, the gross domestic product (GDP) of Brics amounted to US$26.6 trillion (RM123.4 trillion), which is 26.2 per cent of the world’s GDP — almost the same as the economic strength of the G7 — and Brics comprises 3.54 billion people, or 45 per cent, of the world’s population, so it makes economic sense for Malaysia to join up.

Source: Bernama

S. African envoy says Malaysia’s Brics membership will make bloc more inclusive

Malaysia, especially the greater Kuala Lumpur, has the potential to be the business hub or regional headquarters for the Global South, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.

He noted that Malaysia boasts experienced business leaders and employees who have collaborated with Western, Japanese, and Korean industries for decades, in addition to having strong cultural connections with Arab, Chinese, Indian, and other international businesses.

“Admittedly, we need to engage more with Africa and South America as a nation and through our businesses.

“Not many countries are as culturally rich as Malaysia. We must leverage this strength to help the multipolar world connect and do business with each other,” he said at the National Chamber of Commerce and Industry of Malaysia (NCCIM) Annual General Meeting today.

Liew said that a long-time observer of the Malaysian economy told him that of the last 20 years, the current government is the most purposeful government with the clearest economic agenda.

“Of course, clarity on the economy doesn’t mean that our nation will get rich overnight and all the past problems would be swept away,” he said.

Nevertheless, he emphasised that the market and investors appreciate the clarity of policy intentions.

He noted that last year, approved investments rose to a historic high of RM329.5 billion, and the economy is estimated to have grown by 5.8 per cent in the second quarter of 2024.

“It is now not far-fetched to envisage growth at closer to five per cent this year, a bit higher in 2025, and even above six per cent in 2026 if we get our acts together and if the global conditions are in our favour.

“The Madani Economy Framework has clearly articulated the need to raise the ceiling and raise the floor, and Prime Minister Datuk Seri Anwar Ibrahim is very clear in his approach. The nation would not grow if the people were not sharing the fruits of growth,” he added.

Source: Bernama

Malaysia has potential to be business hub for global south – Liew

Johor, Sarawak, and Penang, which collectively accounted for 25.9 percent of the gross domestic product (GDP) in 2023, are expected to remain key contributors to the national economy with stronger growth.

Although Selangor had the largest share of GDP at 25.9 percent, or RM406.1 billion, and exceeded the national growth rate with a 5.4 percent increase, economists foresee stronger growth in those three states.

Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid attributed the robust performance of these states to substantial inflows of direct investment and government development spending. 

“Judging from the current and ongoing projects, it is likely that the three states will continue to thrive,” he told the Business Times. 

Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff said several factors make these states major contributors to the national economy. 

Ahmed Razman said Penang has seen a surge in foreign direct investments (FDIs) from electronics and technology companies, bolstered by the state’s reputation as a technology hub. 

“The reclamation land project in Penang, aimed at creating a huge industrial park, further enhances its economic prospects. 

“As for Sarawak, financial strength has enabled significant investments in infrastructure and capital development, while Johor benefits from its strategic proximity to Singapore, offering potential economic advantages from the High-Speed Rail (HSR) project and the Forest City’s status as a financial zone,” he said.  

Meanwhile, Maybank Investment Bank Bhd (Maybank IB) said newsflow on the three states was aplenty in the first half of 2024 (1H24), and the firm continued to see excitement ahead driven by catalytic developments and their longer-term growth proposition. 

“Economic cluster plans under the New Industrial Master Plan 2030 (NIMP 2030) will further help raise industrialisation and economic activities in these three states,” it said. 

*Johor – JSSEZ to be catalytic on many fronts*

Both Malaysia and Singapore governments inked the memorandum of understanding (MoU) to work on the Johor- Singapore Special Economic Zone (JSSEZ) on January 11, 2024. 

Following the MoU, both governments will work towards a full-fledged agreement, with a deal expected to be reached in September 2024. 

Maybank IB believes that JSSEZ will sharpen Johor’s longer-term prospects as potential beneficiaries of higher economic activities and infrastructure needs in Johor are many. 

“The construction sector stands to gain from new demand for industrial and commercial buildings, and supporting infrastructure in Johor.

“For the property sector, the JSSEZ should help lift real estate prices in and around the identified JSSEZ zone, and support future demand for industrial, commercial, and residential properties,” it said. 

*Penang – Malaysia’s high-tech powerhouse*

Penang has been among the top foreign direct investment (FDI) recipients in Malaysia – in 2023, it ranked number one with RM71.9 billion of approved investments, or 21.8 per cent of the RM329.5 billion approved investments in Malaysia. 

Maybank IB believes that the upcoming infrastructure support for higher levels of economic activities in Penang will continue to be a key catalyst for its development. 

In the construction space, the firm said Gamuda Bhd and Sunway Construction Bhd are among those vying for a role in the Mutiara LRT works. 

“This LRT project is expected to cost RM10 billion to RM13 billion over three work packages (two civil and one system). 

“Mutiara LRT line ought to have its construction completed by 2029 and be operational by 2030.

“For Penang’s property market, the Mutiara LRT project will be an immediate game changer, in our view,” it said. 

*Sarawak – new economic Power-house*

A key development in 1H24 was the appointment of state-owned company, Petroleum Sarawak Bhd (Petros) in Feb 2024 as Sarawak’s sole gas aggregator.

Elsewhere, after taking on 4.8 per cent equity holding in Affin Bank Bhd in 2023, the Sarawak state is poised to take on a larger stake, which could make Affin Bank a dominant bank in Malaysia.

Maybank IB said this will effectively give Sarawak full control over the distribution of gas resources in the state, in-line with Sarawak’s 10-year Gas Roadmap.

It also said that a larger stake in a banking group should help mobilise more financing to industrialise and develop the state over the longer term.

In addition, Maybank IB said Sarawak remains committed to its hydrogen economy aspiration – the state is poised to be a commercial hydrogen producer by 2027, according to its Premier. 

“In November 2020, Petroliam Nasional Bhd (Petronas) and Sarawak Energy signed an MoU to explore the commercial production of green hydrogen and its supply chain in Asia – this would position Sarawak as a hub for the hydrogen value chain,” it added. 

Source: NST

Johor, Sarawak and Penang: Malaysia’s engine of growth

The Ministry of Investment, Trade And Industry (MITI) is always working with the Sabah Government and its relevant agencies to address issues facing the state’s investment.

Minister Tengku Datuk Seri Zafrul Abdul Aziz, who visited the SK Nexilis and Kibing Solar factories in Kota Kinabalu Industrial Park on Sunday, said he sees big potential in Sabah, which is evident when the two companies have shown high commitment to invest and expand in the state.

However, he said there are challenges in the industry that need to be urgently addressed such as infrastructure woes, and his ministry has been working with the Sabah Government and relevant agencies at both Federal and State levels to resolve them.

Zafrul said Sabah ports are seen to be quite active, so two main issues are ensuring the industries here are supplied with sufficient and constant electricity, as well as from the aspect of infrastructure.

He said not only parties such as MITI, Ministry of Energy Transition and Water Transformation, Ministry of Human Resources and Home Ministry are involved in resolving these problems, the Sabah Government also plays a vital role.

“Every year, we hold a meeting involving all relevant agencies and ministries, at the Federal and State levels, to discuss the strategies to be taken, but what is important is to address these issues at all times.

“We also have a Malaysian Investment Development Authority (MIDA) office here, where operational issues are raised every week.

“Such issues have to be discussed on a weekly basis, not only in monthly meetings, so I think Sabah has done a lot of work to coordinate this. The Federal and Sabah governments also have a joint one-stop centre to look at the matter.

“My ministry will continue to work with the Sabah government to improve infrastructure and logistics so that companies can come and invest in Sabah, at the same time increasing the country’s earnings and investments,” he said after officiating the Umno Penampang annual general meeting at the Sabah International Convention Centre here on Sunday.

Comment on the tendency of foreign investors to put money into the State, he said they would have no issue in finding the required manpower considering Sabah’s talent pool, while in terms of demography, it is close to countries such as Korea and China.

In fact, he said Sabah is closer to the two countries compared to the Peninsular, so if the State can strengthen its infrastructure and logistics, there will be more companies coming in to support the economic overflow from not only China and Korea, but also Japan.

Zafrul stressed that the increase of investments in Malaysia not only needs to be inclusive, but also equitable, resilient and sustainable.

Source: Borneo Post

Sabah has big investment potential – Zafrul

InvestKL secured RM3.3 billion in investments in the first half of 2024, creating 3,389 high-value regional jobs through the establishment of six global services hubs.

In a statement today it said these investments, secured amidst global challenges, reaffirm Greater Kuala Lumpur’s  appeal as a top investment destination. This is thanks to its ease of doing business, robust infrastructure, skilled talent pool, and vibrant ecosystem driven by collaboration and innovation.

The new investments include the establishment of service hubs from the Americas, Europe, and Asia region.

“The first-half results demonstrate InvestKL’s continued impact in solidifying Greater KL’s status as a top investment destination in the region. This aligns well with our 2024 target to attract global services hubs with a focus on technology and cutting-edge activities that will spur high-skilled jobs for Malaysians. Through our engagements, it is evident that more eyes are now on Malaysia, and global companies are eager to capitalise on the country’s strength to deepen their investments and broaden their regional presence from Greater KL,” InvestKL CEO Datuk Muhammad Azmi Zulkifli said.

As of today, InvestKL has attracted over 140 Global Services Hubs by leading companies employing more than 27,000 executives with an average monthly salary of RM17,000.

InvestKL said Malaysia’s stable outlook and recent rationalisation efforts have contributed to a surge in foreign direct investments followed by growing investments in digital technologies, including software, Generative AI, green innovations, and data centres.

The country also anticipates a wave of investments in green energy and sustainability through the National Energy Transition Roadmap (NETR), further building capabilities in the digital technology sector.

Invest KL said its strategic direction will focus on attracting global services from key sectors such as digital and technology, engineering, health tech, and renewable energy, while also emphasising human capital development.

Malaysia recorded RM83.7 billion investment progress in the first quarter of 2024, a 13 per cent increase over the same period last year.

About 47 per cent or RM39.3 billion investments were for the services sector.

Source: NST

InvestKL secured RM3.3b in investments in the first half of 2024

Selangor attracted RM12.4bil in investments in the first quarter, a 66.8% hike from RM7.44bil recorded during the same quarter of last year.

These investments are expected to create 29,000 new jobs for Malaysians.

Selangor Mentri Besar Datuk Seri Amirudin Shari said the state government will continue working with partners such as the Investment, Trade and Industry Ministry and the Malaysian Investment Development Authority (Mida) to achieve its targets including to become a RM500bil economy in the next two to three years.

“To go about achieving that, we cannot rely purely on services, but reinvigorate Selangor’s manufacturing capacity, to not only fulfill local needs but also for a bigger South-East Asian and the larger Asian markets,” he said at the Mida Invest Series–Selangor: Unfolding Its Business Potential event.

Mida reported that as of 2023, the state contributed 25.9% of national gross domestic product and 17.67% of national exports.

“The state’s economic contributions are driven predominantly by the manufacturing sector, particularly electrical and electronics such as semiconductors, positioning it as one of the major exporters in the country.

“Selangor’s impressive investment achievements underscore its strategic importance and economic resilience,” it said.

Source: The Star

Selangor attracts RM12.4bil investments in 1Q24

Selangor needs to reinvigorate its manufacturing capacity to fulfil local needs and the bigger Asian markets to reach its RM500 billion gross domestic product (GDP) target in two to three years target, Selangor Menteri Besar Datuk Seri Amirudin Shari said.

He said while services and manufacturing sectors remain valuable components in Selangor economic contribution to Malaysia, at 32.6 per cent and 26.7 per cent respectively, the state government cannot be purely satisfied or complacent.

“According to multiple reports, based upon the recovery of the world economy, the International Monetary Fund (IMF) expects the emerging and developing Asia to grow by 4.3 per cent in 2024.”

“The World Bank also projected that Malaysia would grow its economy by 4.3 per cent this year and 4.5 per cent in 2025. We need to continue working hard, and working with partners like MITI and MIDA, to rise to the challenge and find ways to build a RM500 billion ringgit economy in the coming two or three years.To go about achieving that, we cannot rely purely on services, but reinvigorate Selangor’s manufacturing capacity, to not only fulfil local needs but also for a bigger Southeast Asian and the larger Asian markets,” he said in his keynote address at MIDA Invest Series here today.

Amirudin said Prime Minister Datuk SeriAnwar Ibrahim’s commitment to Malaysia exploring a strategic partnership with BRICS economies should be seen an opportunity for companies especially thosewho are already present in Selangor.

He said Brazil, Russia, India andSouth Africa represent a greater opportunity while traditional Europe is at the crossroads socially and economically.

He also said  Selangor took up the challenge to be the first state in Malaysia  to embark on a medium-term socioeconomic plan which is outlined in the First Selangor Plan.

The plan aims to uplift living standards for families, increase environmental resiliency based on sustainability, and  building a 21st century system of government which is digital first and more responsive.

Amirudin tabled the Mid-Term Review of the plan earlier this month, which was passed in the Selangor State Legislative Assembly.

“After it was passed unanimously in August 2022, last week was the culmination of an effort to achieve two things; firstly, to review our performance and ability to execute some of the big plans we made, and secondly, to recalibrate some new focus areas, in line with the latest needs both by the business community and Selangorians at large.”

“And I am glad to report that as of the end of June, 33.7 per cent of the main projects and initiatives have been completed, while the remaining 66 per cent are at various stages of implementation with key areas like the Integrated Development Region in South Selangor (IDRISS), Sabak Bernam Development Area (SABDA) or even the new Shah Alam Sports Complex,” he said.

Source: NST

Selangor MB says state needs to reinvigorate manufacturing capacity to achieve RM500b GDP target

Selangor should leverage on national policy push and enablers to reach its RM500 billion gross domestic product (GDP) in two to three years target, Investment, Trade and Industry (MITI) minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said.

Highlighting the various national level plans, like the recently announced Green Investment Strategy (GIS), he said, all these policy push and enablers will be able to help Selangor achieve its objectives, including that of developing its green manufacturing industry.

“In fact, Selangor’s  approved investments in the first quarter of 2024 (Q1 2024) of RM12.4 billion makes it one of the biggest investment contributors to Malaysia’s first quarter,” he said in his keynote address at the 8th Selangor Asean Business Conference (SABC 2024).

Tengku Zafrul said with strong coordination and collaboration between MITI, Invest Selangor and Malaysian Investment Development Authority, he is confident more investments can be attracted into Selangor, and realise these approved investments quickly, and possibly at a realisation rate higher than the national rate.

He said Selangor can leverage on Malaysia’s chairmanship of Asean and Asean’s position as “darling destination” for investments in manufacturing for the world to attract  more investments.

He said Asean has a collective GDP of almost US$3.7 trillion (2022) and ranks as the third largest regional economy in Asia and the fifth largest in the world.

Despite global challenges, foreign direct investment (FDI) inflow into Asean was US$155 billion in 2023.

“Thanks to Asean’s neutral stance – FDI flows looks set to remain steady in the coming years, particularly amidst the continued geopolitical conflict between US and China, as well as Ukraine and Russia,” Tengku Zafrul said.

He added that Asean also has many other things going for it to attract more FDI into this region, such as its combined population of over 670 million people, out of which 213 million, or 31 per cent, are youths aged 15 – 34 years old, which make up for a young talent pool.

“This demographic dividend is also seen in Selangor, whose working people make up 67 per cent of its population, partly due to its popularity as a ‘land of opportunities’ for workers from other states,” said the minister.

On Malaysia’s Asean chairmanship next year,Tengku Zafrul said it was a crucial opportunity to align Asean’s direction with our national and state economic policies.

“MITI will lead Malaysia’s Chairmanship in the economic pillar, guided by the overarching objectives of the Asean Economic Community (AEC) Council. MITI is in the process of crafting Malaysia’s Priority Economic Deliverables or PEDs,” he said.

PEDs will be framed around four key strategic thrusts namely  enhancing trade and investment between Asean member states, integrating and connecting economies, forging inclusive and sustainable future and transforming the digital future.

“Given Selangor’s location within the Klang Valley, its businesses stand a strong chance of leveraging on key events to be held in Kuala Lumpur to elevate themselves and build their regional profile, particularly as MITI and its agencies have been working hard towards making Malaysia a manufacturing and services hub for the region,” said Tengku Zafrul. –

Selangor’s gross domestic product (GDP) growth at 5.4 per cent in 2023, surpassed national GDP growth of 3.6 per cent.

Source: NST

Selangor should leverage national policy push and enablers to reach RM500b GDP target – Tengku Zafrul

Selangor remains focused on maintaining its performance as the country’s largest investment contributor by state through the organisation of the Selangor International Business Summit (SIBC 2024), said Selangor Menteri Besar Datuk Seri Amirudin Shari.

For the first quarter, Selangor was in third place with an investment of RM12 billion, while for the whole of 2023, Selangor was in second place with an investment of RM55 billion

“So the target this time is to maintain the large amount of investment and create significant economic opportunities for the people,” said Amirudin following the opening of the 8th SIBC at the KL Convention Centre on Thursday.

At the same time, Amirudin said the state government will cooperate with the Ministry of Investment, Trade and Industry as well as other ministries in programmes that will bring economic benefits to Selangor.

“With Malaysia set to be the Asean chair in 2025, Selangor stands ready to support and complement the federal government and Miti in every way possible,” he added.

Meanwhile, commenting on Malaysia as the Asean chair, he said Asean countries should build trust and commitment through sharing technology goals to strengthen cooperation among Asean countries.

“Asean should no longer be a region where big players look to offshore their manufacturing hubs to lower costs, but be leaders in innovation and create technologies of our own to solve the grand challenges of our time,” he added.

Source: Bernama

Selangor plans to be the country’s biggest investment contributor this year — Amirudin

Country leads from the perspective of infrastructure and stability

Malaysia is increasingly seen as the epicentre and gateway to the broader Asean region by investors, underpinned by its relatively advanced infrastructure and stable business environment.

Penjana Kapital Sdn Bhd chairman Tunku Alizakri Raja Muhammad Alias said while the country’s yield flow may not be as high as some other countries, the nation is quite advanced from an infrastructure perspective for investments compared to many of its Asean counterparts.

“There are a lot of opportunities in Southeast Asia and Malaysia. I think the country is much more advanced in terms of stability and ability for companies to conduct their business.

“We might not be as advanced as Singapore but Malaysia is definitely cheaper. This is what is generating a lot of interest among investors,” he said at a panel discussion on “Malaysia’s government-backed funds and their investment strategies” at the Tech in Asia conference yesterday.

Penjana Kapital is a sovereign venture capital fund.

Alizakri said the key question now is whether Malaysia and Asean as a whole will be able to “get its act together” to unlock the true value of Asean.

“I think this question is still being answered and this is where the Malaysian government attempts to give that perspective, with an ambition to position Malaysia as a hub for venture capital and startups, specifically for Asean. This is also taking into account that the country is going to be the chairman of Asean next year,” he said.

Alizakri said when it comes to investment, it is important to have a whole-ofasean approach and not just on individual countries.

He noted that instead of competing over ownership of companies, like Grab, countries should embrace the idea that Asean owns these individual companies

“In the early days, which was about five to 10 years ago, we used to look at what is happening in the West, and try to replicate it in Malaysia, not really taking into account that we do not have the same fundamentals.

“What worked in the United States and Europe does not necessarily work for Malaysia. Some of our companies had gone into a ‘cash-and-burn’ model.

“We should look at Asean as a whole. So if you want to go on a cash-and-burn model, start in a country which actually has its core fundamentals in place, like Malaysia. Use Malaysia as a testbed for prototypes into targeted businesses.

“Once a company reaches a certain saturation point, it can then seamlessly transition to a larger market like Indonesia where you actually scale up.

“So in that case, you will be able to unlock the true potential of Asean itself rather than any individual country in its own right,” he said.

In response to what success would look like, Alizakri said it would be when the true promise of Asean is realised, using Malaysia as a partner, given that the country is an unexplored launchpad into Asean for global funds at this point in time.

“Some people assume that when they establish their headquarters in Singapore, they automatically know the whole of Asean. This is a mistake because each country is very diversified with very different cultures, religions and practices.

“Malaysia has the potential to be a solid hub, especially for impact investmenting, because I believe this is going to be the next generator of not only financial returns but also social returns.

“I also hope, in terms of success, that at long last, we will see solid global partners who will look at Malaysia as their home.”

In a separate panel discussion on “Digital banking in emerging markets: What’s next?”, GXS Bank Pte Ltd group chief executive officer Muthukrishnan Ramaswami said while what digital banks offer is not significantly different in terms of digital capacity, their products and services have been significantly reinvented, as they have started afresh.

“Digital banks can make a big difference in the sense that users have the flexibility of putting money into a digital bank and earning interest that is much more competitive than what the big banks pay.

“What the regulators have done is to provide the central-bank guarantee or the insurance guarantee for deposits held in digital banks and therefore hold us to the same high standards as any big bank.

“So I don’t think we get any regulatory slight. The ratios are the same, we are pretty much governed like a big bank but we are able to extend services that are much more far-reaching for the underserved customers,” he said.

Muthukrishnan said the key thing for digital banks is the simplicity of products and services in bringing banking to underserved segments.

“The products are geared to cater for what I would call non-complex needs. Because most people do not have very complex needs early in their financial journey.

“The quid pro quo for that is the service costs are very low, acquisition costs are very low and we do not have a branch network, therefore our cost to service is low.

“Hence, if we can keep our costs small and if we can keep our products simple, then I believe it’s a win-win,” he said.

Boost group chief executive officer Sheyanta Abeykoon said if one were to look at digital banks that are successful around the world, having a robust ecosystem – whether captive or through a partner – is a major contributing factor.

“Ecosystems play two important roles. The first is bringing an existing customer base where digital banks can seamlessly integrate an onboarding journey or products in an already familiar environment to customers.

“Secondly, it offers data, especially of the underserved segment, that is not publicly available. This unique customer data gives digital banks a competitive advantage in our customer-centric strategies as well as in product design.

“Boost Bank is doing the same by tapping into our own and partner ecosystems to bring banking directly to our customers by seamlessly embedding our digital banking products and services within these ecosystems,” he said.

Source: The Star

Malaysia investment gateway to Asean

PENANG has had a successful industrialisation journey over the past 50 years. During this time, its semiconductor and electrical and electronics (E&E) sectors have transformed from being labour-intensive and low-value-added industries into a powerhouse known as the Silicon Valley of the East.

Last year, the state contributed an impressive 32% share of the country’s exports, amounting to RM41.15 billion, and attracted RM71.9 billion in investments. Foreign direct investment (FDI) made up a significant portion of these, strengthening its position as an investment destination.

However, the influx of investments into the island state has posed challenges to its next phase of economic growth — land scarcity and talent shortage, among others.

“Penang’s greatest economic advantage is its people. It is the backbone of industrial and economic growth. At the same time, we believe Penang is now part of the growing nexus of the economic region vis-à-vis Kuala Lumpur, Johor, Singapore and Sarawak,” Affin Hwang Investment Bank Bhd CEO Nurjesmi Mohd Nashir said at the Penang Economic Forum 2024 organised by the investment bank and Penang Institute.

Several topics were discussed at the forum, including the state’s next growth prospects, its strategy to harness a competitive advantage and the collaboration between Penang, Johor and Sarawak as an economic corridor.

Speaking at the forum, the Yang di-Pertua Negeri of Penang Tun Ahmad Fuzi Abdul Razak acknowledged Sarawak’s wisdom in taking the initiative to drive economic growth, including the takeover of Bintulu Port, the launch of its own airline and the establishment of a sovereign wealth fund. Nevertheless, he added that it would not be practical for Penang to simply replicate these.

“I have long admired the Sarawak government’s proactive approach to driving economic growth through innovative ideas and initiatives. I believe that while it may not be practical or necessary for Penang to blindly follow similar initiatives, it may be useful for the state to be sufficiently inspired to develop its own niche and identity to protect its own long-term interests in the federation,” he said in his keynote speech.

Ahmad Fuzi pointed out that Penang had gone through a rapid industrialisation journey and developed numerous industrial zones, which have transformed the state into a semiconductor powerhouse. Thanks to its strong and vibrant E&E ecosystem, the state now accounts for more than 7% of the world’s semiconductor sales.

However, he highlighted, Penang lacks sufficient land to expand its economic base and develop even more industrial or economic zones, as well as to get into solar farming and large-scale plantations, among others. He also pointed out that the state does not have the financial resources to implement high impact socioeconomic projects and had become dependent on the federal government.

“We also face a lack of water resources, including insufficient raw water from Sungai Muda with the three major dams — Air Itam, Teluk Bahang and Mengkuang — unable to fully meet Penang’s increasing water requirements and need to purchase treated water from Perak and Kedah,” said Ahmad Fuzi.

Having said that, he hoped that the federal government’s agreement in principle to allocate RM4 billion to pipe raw water from Sungai Perak to the Bukit Merah Dam would help to increase the supply of treated water in Penang. “This means the challenges that Penang faces and what it can do are inextricably linked to the challenges faced by the country as a whole, as well as what are determined and implemented at the federal level.”

Selective on FDI flows

Recognising these challenges, the Penang government has taken a proactive approach to tackling such matters, including upgrading the infrastructure in the state, moving up the semiconductor value chain and being more selective in terms of FDI flows into the state.

Over the years, local semiconductor and semiconductor-related firms, especially public-listed ones, have been mostly involved in the mid to lower end of the value chain, serving foreign semiconductor manufacturers, brand owners, integrated circuit (IC) developers and fabricators.

InvestPenang CEO Datuk Loo Lee Lian emphasised the crucial role of resources like land, water and human capital. As such, the state has identified IC design, advanced packaging and equipment manufacturing as its key growth areas in line with the National Semiconductor Strategy.

“I think all of us know that we are in the midst of the geopolitical tensions, escalating the importance of semiconductors that has caused a shift in capital and investment to countries in Southeast Asia. Malaysia, especially Penang, has been a beneficiary or a high recipient of that FDI,” she said during the third panel discussion: The Penang Agenda — the State’s Prospects and Aspirations.

“But the point to also note is that: Will this FDI come unlimited? Are we to enjoy this flow of FDIs forever?

“We have benefited from this inflow of capital based on our existing ecosystem that we have built over the last 50 years. The capacity, the human capability and human capacity, built over the past years. But challenges are emerging.”

Loo pointed out that Penang needs to be strategic in its FDI approach and consider its capacity, infrastructure, land, electricity and water needs, and human capital.

“In the past, we used to receive two or three investors on a weekly basis. But now, we receive three to five on a daily basis,” she said.

“But we are running out of capacity. So we learnt to be more clever and resourceful. We needed to be more strategic.

“Back in 2022, we mapped out the semiconductor supply chain to identify the opportunities against what we had. We concluded that we could not play in every field, but to have a strategy to choose what sectors we want to invest in — IC design, advanced packaging and equipment manufacturing — because these have the highest value and will give us a multiplied effect that will provide more opportunities for SMEs (small and medium enterprises). The allocation of resources, including land and utilities, will take into account the sector that we want to promote.”

Infrastructure development a game changer

Penang is in the midst of a massive reclamation project to develop a 930ha man-made island known as Silicon Island.

“It will be a smart, sustainable and green city of the future. It will also serve as the high technology and E&E hub,” said Silicon Island Development Sdn Bhd CEO Datuk Szeto Wai Loong.

“When we started to propose Silicon Island, we were advised that it had to be an economic catalyst for Penang. If not, as a lot of people would say, it would become another Forest City. As such, we have to add the industrial plan, and of course you cannot run away from the semiconductor sector.”

Penang state exco and chairman of the infrastructure, transport and digital committee Zairil Khir Johari said that apart from building new industrial parks, the state is working very hard to upgrade its infrastructure. “If we want to create and develop new industrial parks, we will need more power and water.”

In terms of water, Zairil said that while the state has been investing consistently over the last five years to ensure that it has enough water supply, it has faced an unexpected rise in water consumption.

“We are a bit water stressed at the moment due to an unexpected rise in water consumption and demand, since Covid actually, which was a bit unexpected and way over our projections. It usually takes us 10 years to increase water demand by 10%, but it increased 10% between 2019 and 2023. So sort of a 10-year demand surge in three years, which is causing some of our water stress problems,” he said.

Nevertheless, the state is working on upgrading its water infrastructure. But it will take at least one to two years to complete, he said.

Zairil also talked about some of the transport-related infrastructure projects in the state that would address the congestion on the island. He expects the Penang LRT project, which will run from Silicon Island to Penang city centre and towards Penang Sentral on the mainland, to start construction this year.

He also said the LRT will have its own connection bridge from the island to the Penang mainland.

“This will solve a lot of traffic problems that we face, bearing in mind that a lot of traffic comes from outside of Penang [island]. It will be a game-changing project,” he said.

“The other [form of] transport that we’re looking at is water taxis. Penang is an island, but we make very little use of our waterways in terms of transport.”

He also revealed that for the proposed water taxis, the state had called for tenders.

Getting more Penang-based companies to go public

Bursa Malaysia chairman Tan Sri Abdul Wahid Omar said that although Penang is a semiconductor powerhouse, not many Penang-based companies opt to list on the local stock exchange. He pointed out that between 2020 and May 2024, only 17 companies from the state had an initial public offering (IPO) on the local bourse.

It should be noted that about 129 companies had their IPO on Bursa during that period.

“In terms of GDP (gross domestic product), Penang is the fifth-largest economy in Malaysia based on 2022 numbers. In terms of wealth, GDP per capita, Penang stood at number four in the country,” he said during the panel discussion.

“When it comes to representation on the stock exchange, Penang is underweighted. Although it contributed 7.4% to the country’s GDP, the total market capitalisation is RM71 billion out of more than RM2 trillion, which is below 4%. Potentially, we should see a doubling of Penang-based companies listed on Bursa Malaysia.

“Nonetheless, in recent times, we are seeing more Penang-based companies coming to the market. About 13% of new companies coming to the market are from Penang.”

Source: The Edge Malaysia

Penang is not short of FDI, but resources

Malaysia recorded a total of 9.48 million visitors from January to May this year, an increase of two million visitors compared to the same period in 2023.

500 Global managing partner Khailee Ng said tourist arrivals to Malaysia are increasing, highlighting why major global corporations such as Microsoft, Cloud AI and Infineon choose to invest in the country.

He said the nation has made significant progress by having the world’s largest production site of silicon carbides, with Infineon recording up to RM22.8 billion (US$5 billion).

“There are also projects from China, Europe, the United States, and other countries that are being set up not just in Penang but also in Johor, Sabah and Sarawak.

“Events like this will also bring the community into the opportunities and insights of the Malaysian investments,“ he said in his speech at the opening of the Tech in Asia Conference 2024 today.

The two-day conference, powered by Mystartup by Cradle, as attracted tech enthusiasts, investors and entrepreneurs from across Southeast Asia. The event , underpinned by Mystartup’s commitment to fostering startup growth and innovation, is a pivotal moment for the region’s tech ecosystem.

The conference opened with a keynote address by Cradle Fund Sdn Bhd CEO Datuk Seri Mohd Yusof Sulaiman, who highlighted the transformative impact of startups on the Malaysian economy. “The role of Mystartup by Cradle is key in nurturing homegrown talent and supporting scalable business models through funding, mentorship and market access,“ he said.

Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai shared his insights on Malaysia’s semiconductors opportunity, which focuses on leveraging opportunities to enhance the industry and localising semiconductors in the Malaysian industry.

The conference features panel sessions and workshops addressing critical issues in the tech industry.

Sessions such as “Scaling Startups in Southeast Asia” and “The Rise of Malaysia Fintech Scene” provided valuable insights into market trends, regulatory challenges and growth strategies.

A recurring theme at the conference is the emphasis on sustainability, opportunities and inclusivity in technology. 

Source: The Sun

Malaysia has made great progress in attracting tech investments: 500 Global head

The Ministry of Investment, Trade and Industry (MITI) is in the process of reviewing the Countervailing and Anti-Dumping Duties Act 1993 (Act 504), said Deputy Minister Liew Chin Tong.

He said the amendment to Act 504 is expected to be tabled in Parliament in January 2025.

In the meantime, he said the government supports the measures to protect small and medium enterprises (SMEs) from the effects of unfair trade following the influx of cheap imported goods in large quantities, including from China through the enforcement of trade remedies.

Among the remedial measures taken are the imposition of anti-dumping duties, countervailing duties and protective duties, he said.

“MITI implements this trade remedy action in accordance with national legislations namely Act 504 and the Countervailing and Anti-Dumping Duties Regulations 1994 (1994 Regulations).

“This trade remedy action is aimed at overseas manufacturers or exporters that result in harm to local industries including SMEs in Malaysia and the scope of its imposition includes all local industries,“ he said during a question and answer session at the Dewan Negara today.

He was resplying to Senator Tan Sri Low Kian Chuan’s question about the ministry’s efforts to support SMEs in Malaysia in overcoming the impact of Chinese business entry.

Liew added that between 2015 and 2023, MITI had enforced nine anti-dumping measures against Chinese exporters to protect local industries from unfair trade practices.

Source: Bernama

MITI reviewing Countervailing and Anti-Dumping Duties Act 1993

Sarawak continues to be recognised by the World Bank as a high-income region in 2023, said Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He said the World Bank Malaysia has confirmed that Sarawak still maintains its status as a high-income region, with a gross national income (GNI) of US$17,000 compared to US$15,000 in the previous year.

“With a non-conventional approach, Sarawak can determine its own economic direction that revolves around economic initiatives that are closely related to the global effort to deal with climate change.

“This was proven when Sarawak became the first region in the country to take steps to move its economy towards a green economy and transition to clean energy from carbon while adding value to the state’s natural resources,” he said during the Sarawak Day 2024 celebration in Bintulu last night.

Abang Johari said this green economic policy has highlighted many opportunities to transform the state’s economy in terms of increasing foreign and local investment as is and will happen in Bintulu.

He officially opened Sarawak’s first wholly-owned Methanol Plant in Tanjung Kidurong yesterday with the aim of increasing the added value of Sarawak gas thus generating the state’s economy.

“Tanjung Kidurong will see more investment by giant companies such as Petronas, Shell, Samsung, Sumitomo and others in the next six to 10 years.

“I am confident that Sarawak’s economy will continue to grow as a whole with the development of Tanjung Kidurong as the hub of Sarawak’s gas industry and Samalaju as an industrial area based on intensive energy use.

“Therefore, I am also confident that Sarawak’s economy will continue to grow in the period up to 2030 and up to 2050 and strengthen Sarawak’s status as a high-income economy,” he said.

Abang Johari said the recognition from the World Bank is not the final goal of the Gabungan Parti Sarawak (GPS) Government.

“A high level of GNI does not mean that the income of every household of our people is high. This situation should not be politicised but what is more important is to implement efforts to deal with these shortcomings both at the state level and at the federal level.

“The GPS Government’s current focus is to increase the median household income in Sarawak (or Median Household Income) which is at the level of RM4,978 compared to the national rate at the level of RM6,338,” he said.

He was confident with the measures to transform Sarawak’s economy that are being implemented and will be implemented, the state will strive to improve the current level to surpass the national rate.

Source: Borneo Post

Abg Johari: Sarawak still maintains status as high-income region in 2023

Malaysia is considering joining several international organisations, including the Organisation for Economic Co-operation and Development (OECD), said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

Zafrul said in its effort to maintain a balance of the country’s economic development and good relations with all trading partners, especially world economic powers, Malaysia will continue to ensure an independent, principled and pragmatic foreign policy.

“The government will use a multi-directional approach so that the interests of the country are always upheld.

“This is one of the main reasons why Malaysia is not only considering participating in BRICS but also some other appropriate organisations such as the OECD, where Malaysia can contribute to the development of the international community.” 

He said in reply to a question from Senator Datuk Noraini Idris in the Dewan Negara today regarding the propriety of Malaysia joining the BRICS economic alliance and how such participation does not hinder planning and global trade relations.

Zafrul stressed that Malaysia, as a trading country, always focuses on strengthening economic cooperation with all partner countries.

He said this is proven through the country’s involvement and active role in various international organisations at the regional and multilateral levels, including Asean, the Asia Pacific Economic Cooperation, the United Nations, and the Organisation of Islamic Cooperation (OIC).

“In that context, Malaysia’s participation in BRICS is in line with efforts to drive the economic agenda for the benefit of the country and the people.

“With a strategic and balanced approach, Malaysia can optimise the benefits of participation in BRICS, in addition to ensuring the stability and continuity of trade relations globally with all our main economic partners.”

BRICS, which comprises Brazil, Russia, India, China and South Africa as well as four new member countries — Egypt, Ethiopia, Iran and the United Arab Emirates (UAE) — have a cumulative population of 3.54 billion.

The total gross domestic product of the organisation is estimated at US$26.6 trillion (US$1=RM4.68) or equivalent to 26.2 per cent of the world’s GDP, said Zafrul.

Source: Bernama

Malaysia mulls joining OECD

As we step into the next 50 years, there is strong optimism about the immense potential of Malaysia-China relations, which are currently at the level of a Comprehensive Strategic Partnership.

Since the formal establishment of diplomatic relations on May 31, 1974, the first 50 years have seen both countries build a strong and significant relationship in various fields, primarily driven by the economic and investment sectors.

China has emerged as Malaysia’s largest trading partner for 15 consecutive years since 2009. Bilateral trade value reached RM450.84 billion (US$98.80 billion) in 2023 – a jump of more than 481 times compared to the total trade of just less than US$200 million ( RM937 million) in 1974.

Looking ahead to the next five decades and beyond, analysts are optimistic that the relationship between the two countries has significant room and opportunities for further development and exploration for mutual benefit and prosperity.

Geostrategist Prof Dr Azmi Hassan said, that although Kuala Lumpur’s relationship with Beijing is not without its challenges, including in the matter of overlapping claims in the South China Sea, it should be maintained based on the country’s policy of neutrality and non-alignment.

Malaysia-China relations have always been based on mutual trust and a win-win situation. This dispels the perception that Malaysia favours China in geopolitical matters, he told Bernama.

“In reality, Malaysia is close to both China and the United States (US) because what we want is to ensure that trade activities are not disrupted by the geopolitical rivalry between China and the US,” said Azmi.

This was also highlighted by Prime Minister Datuk Seri Anwar Ibrahim and Chinese Premier Li Qiang, who agreed to promote a fair and orderly multipolar world and inclusive globalisation that benefits all universally.

The strategic bilateral relationship between Malaysia and China, which are important representatives for developing countries in Asia and rapidly growing economies, “should be highlighted.”

This aspiration was expressed in a joint statement by both prime ministers during Li’s official visit to Malaysia to celebrate the golden jubilee of the diplomatic relationship between the two countries recently.

This is not only for the people but also for the future of the region, in addition to enhancing unity and cooperation within the “Global South.”

“The Malaysia-China relationship can be a model to be emulated, where major powers can trade and deal for mutual benefit and not merely use their strength to take advantage of smaller countries,” said Azmi.

The analyst also opined that the rise of China as a global power should serve as a lesson for developing countries like Malaysia to benefit from China’s rise in their development, such as in the fields of economy, infrastructure, high technology, digitalisation, and artificial intelligence (AI).

Azmi said one aspect that Malaysia needs to learn from China is the growth of its economic sector.

“Malaysia needs to follow China’s example of how the domestic market is the main support of the country’s economy. Although the population in Malaysia is only 33 million, we can learn from China. If
there is a recession, the domestic support remains,” he said.

He believes China can also learn from Malaysia, particularly how Kuala Lumpur’s non-aligned stance, including towards any major power, makes it easy for other countries to deal with Malaysia.

Meanwhile, Deputy Head of the Department of International and Strategic Studies at Universiti Malaya, Dr. Lam Choong Wah, said one of the emerging areas that Malaysia should focus on in its expanding relations with China is “space exploration.”

Highlighting China’s major success in the lunar exploration and their quest to Mars in recent years, Lam said Malaysia should tap into the Chinese expertise in this field.

Last month, China made history in its space exploration endeavours when the Chang’e-6 lunar probe landed on Earth with rock samples collected from the moon’s far side, the first in mankind’s history.

“Malaysia should no longer be a mere bystander in this field. We should take part actively in this important age of discovery.

“Malaysia should look at the opportunity to tap into Chinese astronomical achievement via bilateral cooperation for instance, and sending our people to the Chinese Science Academy to conduct joint research on lunar soil,” he said.

He said this factor also aligns with Malaysia’s ambition to develop its space industry.

Last year, Science, Technology and Innovation Minister Chang Lih Kang said Malaysia is studying the feasibility of establishing a space launching site here, citing the country’s unique geographical position and the immense economic potential it stands to generate from the industry.

Source: Bernama

Malaysia-China Relations Have Huge Potential To Be Explored For The Next 50 Years – Analysts