ASEAN KEY DESTINATIONS
Malaysia wants foreign investments
Prime Minister Najib Razak unveiled 12 small and mid-sized electronics, oil and gas and infrastructure projects as part of a target to attract $444 billion of investments to become a developed economy by 2020.
The investments include $159 million in spending by Infineon Technologies to upgrade a production plant, a $165 million commitment from Asia Media to develop digital media infrastructure and the creation of a state-owned energy development agency to draw $106 million of investments this year.
“Today’s announcement shows the continued interest of investors in the Economic Transformation Program,” Najib said, referring to the 10-year investment plan. “The government aims to place the private sector as an engine of growth.”
Malaysia’s investment drive had earlier drawn about $5 billion in commitments from oil giants ExxonMobil and Royal Dutch Shell, but most other projects have been more modest.
In contrast to its neighbors Thailand, Indonesia and the Philippines, which have been taking steps to stem hot money inflows, Malaysia is trying to attract more investors.
Najib has set a goal of transforming the Southeast Asian country into a high-income economy within 10 years by generating new growth areas and restructuring the economy to lure investors.
But analysts say a slew of past investment blueprints, including a $105 billion plan to develop the southern Johor state, has yielded limited results.
The Malaysian economy has been stuck in second gear as it lacks the skilled workforce to become a financial services hub but has outgrown its niche as a low-end manufacturing center with the rise of cheaper competitors such as Vietnam.
Foreign ownership of stocks on Malaysia’s exchange stood at just 21.2 percent of market capitalization in September, versus 26.2 percent in 2007. Portfolio investment was at 3.5 billion ringgit (US$1.16 billion) in the fourth quarter compared with 16.3 billion ringgit in the third quarter.
Over the years, Malaysia has partially opened its financial sector but investors want the government to take more aggressive steps to reduce its fiscal deficit and overhaul an affirmative action policy they say hinders competition.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below