Zafrul: Putrajaya streamlining functions of Malaysia’s economic regions to boost investment promotion efforts
17 Oct 2023
The government is in the process of streamlining the functions and roles of each of the country’s economic regions, as part of efforts to improve investment promotion activities and restructure investment promotion agencies (IPA).
Minister of Investment, Trade and Industry (Miti) Tengku Datuk Seri Zafrul Abdul Aziz said in Parliament on Monday that there is a need to restructure the country’s IPAs and this begins with the streamlining of the economic regions, in relation to investments and trade.
“Mida (the Malaysian Investment Development Authority) as the main IPA will continue to promote the economic regions based on the strength of the industry ecosystem in each region, and we can study the strengths [of each state],” Zafrul told Dewan Rakyat.
“In Terengganu, it is petrochemicals; E&E in Penang; rubber products in Kedah; hydro-economy in Sarawak; resources-based activities in Sabah and so on,” he said, adding that each region and state will have its own investment targets.
He was responding to questions from Datuk Seri Jalaluddin Alias [BN-Jelebu] on how the ministry balances the amount of investments into the respective states.
Malaysia has five economic corridors, namely the East Coast Economic Region (ECER) comprising Kelantan, Terengganu, Pahang, and Johor; the Northern Corridor Economic Region (NCER) made up by Perlis, Penang, Kedah and Perak; the Sabah Development Corridor (SDC); the Sarawak Corridor of Renewable Energy (SCORE); and Iskandar Malaysia in Johor.
Aside from Mida, Malaysia reportedly has 30 other IPAs, including federal location-based agencies such as InvestKL, federal sector-based agencies and state location agencies.
Prime Minister Datuk Seri Anwar Ibrahim in July said that the Cabinet has approved all Malaysian IPAs to come under the purview of Miti and Mida, amid competition among agencies to secure investments.
Miti will come up with a plan for the streamlining of the IPAs, said Zafrul in July.
In the Budget 2024 tabling on Friday, Anwar said Miti and Mida have been tasked with easing the process of foreign and domestic direct investments (FDI and DDI), from the stages of application to the realisation of investments.
RM106b potential investments under negotiation
Meanwhile, Zafrul in his reply to Jalaluddin’s question, said a total of 984 projects are currently at the negotiation stage under the supervision of Mida, with expected new investments totalling RM106.5 billion as at end-August.
This comprised expected FDI of RM89.5 billion and DDI of RM15.8 billion, he said.
“These investments comprise projects from the manufacturing sector with proposed investments of RM73.6 billion involving 53 proposed projects, as well as 931 project proposals in the services sector under Mida’s purview with expected investments of RM31.7 billion,” said Zafrul.
Malaysia saw RM132.6 billion of approved investments in 1H2023 involving 2,651 projects, of which FDI amounted to RM63.3 billion or 47.8%, while DDI amounted to RM69.3 billion or 52.2%.
In 2022, the approved investments amounted to RM267.8 billion across 4,517 projects, split between DDI (39%) and FDI (61%), Zafrul said. This is expected to create 140,440 employment opportunities in the country, he said.
Five main states with approved investments in 2022 were Johor, Selangor, Sarawak, Kuala Lumpur and Penang, Zafrul said.
“Approved investments in the Klang Valley, which is Kuala Lumpur and Selangor, amounted to only 31.9%. This shows that the investments approved in Malaysia are not concentrated in the Klang Valley,” Zafrul said.
“As an example, Kedah and Perak received spillover economic benefits from the electrical and electronic (E&E) cluster in Bayan Lepas and Batu Kawan. This economic spillover will be able to create new industrial clusters or supporting industries such as high technology manufacturing, and research and development in the High-Tech Parks in Kulim and Perak, which can support the E&E cluster in Penang,” he added.
Source: The Edge Malaysia