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US$1 bln huge Microsoft Endorsement of Malaysian Govt’s Economic Strategy – Economist

US$1 bln huge Microsoft Endorsement of Malaysian Govt’s Economic Strategy – Economist

21 Apr 2021

KUALA LUMPUR, April 21  —  The latest investment of US$1 billion by Microsoft Corp into Malaysia recently signalled  a message to global  investors that giant companies such as Microsoft have solid confidence in the government’s economic policies and approach on human capital and modern infrastructure.

Juwai IQI Global chief economist Shan Saeed said it indicates that the government  is  positioning the right strategy in terms of proving to  global investors that Malaysia is the technology hub for Southeast Asia.

“Macroeconomic stability of the country attracts foreign direct investment (FDI) and investors like Microsoft.

Moreover, tech companies like FaceBook, Tencent and Huawei, would consider Malaysia to be their Asia pacific hub to lead their profitability and growth outlook story due to positive investor confidence in the country and government policies,” he told Bernama.

In the last five years, he said Malaysia had attracted investors that were looking at long-term growth, stability and consistency in the policy levers of the government.

With the  investment of US$1 billion, he said the government sent a positive message across the globe implying a new strong trajectory in terms of growth and outlook of the country.

“At Juwai IQI, we continue to stand buoyant on Malaysia’s economic outlook due to labour productivity, which is English proficient, tech-savvy, result-oriented.

“With this investment coming into Malaysia it will boost the manufacturing, electrical and electronic (E&E), service as well as logistical industries outlook in the country giving investors a new avenue, which other industry leaders will follow,” he said.

Shan said the investment came at a time when the government’s response to COVID-19 with a positive policy had been well received by global investors such as Microsoft.

“At Juwai IQI we continue to maintain our stance that the gross domestic product (GDP) will stand between 3.0 and 4.0 per cent this year with an upside of touching 5.0 per cent at year end. 

“In the end, technology centric government economic policies will spur growth in the coming quarters and years. Malaysia is poised to become the data/CLOUD hub for many technology companies in the Southeast Asian region,” he added.

Tan Sri Muhyiddin Yassin on Monday made the announcement on the US$1 billion investment over the next five years by Microsoft into Malaysia under its “Bersama Malaysia” initiative, which is expected to create 19,000 jobs, including 4,000 IT-related jobs among its cloud users.

Under the initiative, the Prime Minister said Microsoft has also formed five partnerships with government agencies and local companies, including the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU), Human Resources Development Fund, Petronas, Celcom, and Grab.

Echoing similar sentiments, Sunway University Business School economist Prof Dr Yeah Kim Leng said Microsoft’s investment to set up a data centre in Malaysia represented a significant boost to investor sentiments.

“The timing is propitious given widespread concerns over the country’s sagging FDI investment performance especially in 2020. Whilst it may not be a game changer it is nevertheless a strong affirmation of the global company in the country’s growth prospects and potential to develop data centre services,” he said.

He said the huge FDI has potential to accelerate digitalisation in both the public and private sector and attract the entry of more data services providers while innovation and deployment of digital solutions will have a positive impact on raising productivity and competitiveness across all sectors of the economy.

“The investment signals not only the confidence of the world’s largest software rm in the country’s growth prospects but also its digitalisation plan to transform the economy into a high income nation.

“Being situated strategically in one of the world’s fastest growing regions, the software industry service providers, vendors and suppliers will have greater impetus to gravitate to the country as it positions itself to be the production and services hub for the region,” he added. 

He foresees the local software industry as the major beneficiary of the investment, with also positive spillover effects on the economy as the data centre will facilitate the country’s digitalisation plan.

“The government and the various economic sectors whose efficiency, productivity and service quality are boosted by adoption of digital solutions and data services will see enhanced growth opportunities,” he added.

Source: Bernama

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