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||13 March 2010
Malaysia: Services, energy seen as new avenues to draw foreign investment
Malaysia needs to look at attracting new avenues of foreign direct investment (FDI), especially in the services, oil and gas, and energy and environment-related sectors as they offer strong growth potential, the StarBiz reported.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said renewable energy, such as solar and bio-fuel, was one big area that the country should leverage on.
“The ability to attract more solar energy or green technology players will be able to reverse the declining trend of FDI inflow into the country. These ventures are very capital intensive and we have ample raw material supply, low energy cost and land availability for such investments,” he told StarBizWeek Friday.
Yeah said the entry of Hong Kong-based Sun Bear Solar Ltd, a global player in the solar energy industry, into the country was a good start.
Sun Bear will be investing 5.2 billion ringgit (1$=3.4 ringgit) in a solar glass manufacturing plant in Kota Kinabalu Industrial Park, Sabah. The plant will be fully operational by the first quarter of 2012.
According to Yeah, global FDIs have contracted sharply due to the global financial crisis in 2008 and 2009.
“Malaysia’s share of inward FDI into the Asean economies was unchanged at 12 percent for the two previous five-year periods of 1999-2003 and 2004-2008. By contrast, Singapore captured 58 percent in the first period and 45 percent in the more recent period.
Thailand, meanwhile, garnered 20 percent and 17 percent for the respective two periods. The stark reality is that Malaysia is now lagging behind our northern neighbour despite the latter being embroiled in political troubles.
“This should be taken as a wake-up call for Malaysia that it needs to do more to attract foreign investors,” Yeah added.
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