The slithering surge of COVID-19 and uncertainties arising from the commodity shocks have certainly impacted Malaysia’s inching growth towards a projected GDP of 6 to 7.5 per cent in 2021. The World Bank is confident that Malaysia will be able to achieve high-income economic status provided it shifts gear; addressing economic issues which includes investment and trade policies. The geopolitical shifts and the emergence of disruptive technologies require a foundation for policy coherence now more than ever to ensure institutional synergies.
Malaysia is cognisant of these changes and challenges, and is addressing them through bold investment reforms.
While Malaysia’s investment strategies were always underpinned by the Malaysia Plans and Industrial Master Plans, there is a need to pursue cohesive investment policies and streamline mandates of all Investment Promotion Agencies. The goal is simple; to attract quality and strategic investment, reduce dependency on unskilled labour and spur technology transfer.
The National Investment Aspiration (NIA), a forward-looking growth framework, received nods of approval from the Malaysian Cabinet on 21 April 2021 to serve as a basis for comprehensive reforms of Malaysia’s investment policies. The NIA is guided by Malaysia’s Shared Prosperity Vision (SPV) 2030 and will focus on coherence and cohesiveness to be reflected across all national policies related to investment. Through the NIA, the Ministry of International Trade and Industry (MITI) together with MIDA and its other agencies will spearhead national-level efforts to review any investment-related policies and restructure the nation’s investment strategies.
A National Investment Council chaired by the Hon. Prime Minister will be established as a measure to improve the existing institutional setup. The Council which includes stakeholders from relevant Ministries, Agencies, GLCs and GLICs will be responsible for the formulation of major investment-related policies and resolution of key implementation issues.
While these investment strategies are not new, the element of cohesiveness and synergy in its building blocks shines a new light on the NIA framework. The 5 core overarching goals for this framework is to increase economic complexity, create high-value jobs, extend domestic linkages, develop new and existing clusters and improve inclusivity.
These goals together with fundamentals of Environmental, Social and Governance (ESG) will be embedded into key national plans such as the Economic Recovery Plan, 12th Malaysia Plan (202-2025) and the New Industrial Master Plan (2021-2030).
The NIA is expected to propel long term growth for Malaysia through the flow of sustainable quality investment in new and complex growth areas.
Given its decades of investment promotion and facilitation track record, MIDA will be assuming a more prominent role in this initiative as part of institutional reforms and in line with the NIA mandate for better policy coherence.
MIDA, as the coordinating central investment promotion agency and a one-stop centre for potential investments, looks forward to working collaboratively with the relevant investment promotion agencies to harness the competitive strengths of each and every state within Malaysia.
Through these collective efforts, Malaysia is poised to increase its competitiveness gaining investors’ confidence and ultimately becoming the epicentre for economic and business activities in the region.
Source: MIDA e-Newsletter May 2021