Madani Economy: GLCs, GLICs to spur domestic investments – Tengku Zafrul
27 Jul 2023
Government-Linked Companies (GLCs) and Government-Linked Investment Companies (GLICs) are expected to drive domestic direct investments (DDIs) and support the development of local vendors in strategic sectors, such as electrical and electronics (E&E), digital economy and aerospace.
Minister of Investment, Trade and Industry (MITI) Tengku Datuk Seri Zafrul Abdul Aziz said his ministry is pleased that DDI will become one of the Key Performance Indicators (KPIs) because “nothing spells confidence in our investment policies better than our own domestic investors ploughing their money back into their country.”
The Madani Economy: Rakyat Empowerment Framework launched today will address the structural reforms required to stop the country’s dangerous economic cycle of high cost, low salary, low profit and less competitive value. Admittedly several of these issues were made worse by the pandemic.
“The government will focus on encouraging both DDI and foreign direct investment (FDI) in developing Malaysia as a leading economy in Asia and ensuring that there will be positive economic spillover to the people,” he said at the strategic collaboration signing ceremony between Citaglobal Bhd and MASDAR here today.
Some of the key initiatives announced under the Madani Economy that are directly under MITI’s purview are the establishment of a special financial zone in Johor to attract global investors and knowledge workers to reside in Malaysia.
Second, a RM100 million initial allocation for upgrading existing industrial infrastructure to be ‘greener’ as well as enhancing human capital development to meet investors’ needs. Target areas include the petrochemical sector in Kerteh, Terengganu, data centres in Sedenak, Johor and the downstream rubber industry in Kuala Nerang, Kedah.
Third, Penang will be nurtured to move beyond lower value Outsourced Semiconductor Assembly and Test (OSAT) and to focus more on high-value semiconductor industries such as IC design.
Four, the government will allocate RM1 billion to finance, cultivate and internationalise startups and local SMEs to spur export growth. This RM1 billion will be matched by private funds to support local startups and promote technopreneurs.
“Five, the government will also implement state-focused industrial policies to reduce the development gap between developed and underdeveloped states, such as strengthening the O&G downstream industry in Sabah and Terengganu; or increasing value-added activities in the E&E sector in Kulim and Bayan Lepas.
“There will also be tax breaks for firms creating high-income jobs in this country, as well as a review of existing investment incentives to ensure a better win-win situation for both our people/businesses and investors.”
All these measures, and more, aim to make Malaysia among the top 12 economies in the world in terms of competitiveness and investors’ ease of doing business, as well as to be in the top-30 economies globally in the medium to longer-term,” he said.