Mida deputy CEO Arham Abdul Rahman said for the first nine months of 2019, Malaysia registered RM149 billion in total investments, adding that based on preliminary figures from October-December 2019, the target was possible.
This coupled with trade diversion, particularly companies that are forced to pull out their operations and reposition it to Malaysia to escape the punitive tariffs imposed by US President Donald Trump.
“It has been quite a challenging time for the economy given the series of conflicts that had transpired. As far as the US-China conflict is concerned, Malaysia is able to capture some of the businesses that are looking to move out of the two countries.
“There are several Chinese companies that have operations in the US, who are looking at other countries to move their business operations, and Malaysia has managed to capture some of that,” he said at the signing ceremony between United Overseas Bank Malaysia Bhd (UOB Malaysia) and Mida in Kuala Lumpur last Friday.
Arham said Malaysia’s total investment is expected to grow moderately in 2020 amid the global trade uncertainties.
He added that Mida has been monitoring the investment impact from the geopolitical and trade conflicts in Europe and the Middle East, while expecting Malaysia to gain economic benefits by the UK’s departure from the European Union.
“We have been monitoring the development of global events to track its impact on the country. Based on our latest report, there have been positive developments on Brexit and we would like to leverage on that to attract more investment into Malaysia, particularly in the manufacturing and service sectors.
“Also, we started to monitor the recent geopolitical issue in the middle to see if there are opportunities that could be addressed,” he said.
Following Trump’s economic policy of diverting the manufacturing investment back into the country, Arham said Malaysia is unlikely to lose out from the policy.
“Even though the current sentiment of the US policy is focusing on diverting its investment back into the US and through our engagement with the US companies, we feel like it is unlikely that they are going to move out of Malaysia.
“It is because their entire ecosystem and sources are here and keeping the cost down is the priority in business,” he said. In 2018, the domestic direct investment accounts for 60% or RM121.1 billion, while the remaining 40% are made of foreign investment.
Mida data shows that US companies have rolled up RM74 billion worth of manufacturing projects in the country in the first half of 2019, while Chinese companies have implemented RM17.2 billion worth of projects.
Separately, Mida has signed a memorandum of understanding (MoU) with UOB Malaysia to facilitate the flow of foreign direct investment from Japan, China and Asean countries into Malaysia’s high-value sectors.
Under the MoU, both parties will collaborate on attracting global companies to contribute positively to Malaysia’s economy and facilitate the transfer of technology and knowledge.
Source: The Malaysian Reserve