“The strong rebound in the country's FDI inflows reflected growing confidence among investors about doing business in Malaysia,” Datuk Jalilah Baba, director-general of the Malaysian Industrial Development Authority (Mida), told reporters at the launch of the World Investment Report 2011 (WIR11) here yesterday.

“It was an encouraging recovery for Malaysia after the country suffered a sharp drop in FDI inflows in 2009 at the height of the global economic crisis that saw, among other things, foreign investors repatriating funds to their own countries and refraining from making new investments,” she said.

According to the Unctad study, the strong rebound in Malaysia's FDI inflows was in line with the trend of global economic recovery last year, with emerging economies, notably those from Asia, leading growth.

The WIR11, subtitled “Non-equity modes of international production and development”, said that while global FDI inflows rose 5 percent to US$1.24 trillion last year, they were still 15 percent below their pre-crisis average and nearly 37 percent below their peak of US$1.97 trillion in 2007. Economies in the South, East and Southeast Asia region registered the strongest FDI inflows growth at 24.1 percent to US$299.7 billion in 2010. This was followed by developing economies in general with an increase of 12.3 percent to US$573.6 billion, while developed economies saw FDI inflows fell 0.1 percent to US$601.9 billion in 2010.

Manufacturing remained the leader in terms of attracting FDI inflows to Malaysia, with the sector accounting for 54.9 percent of the total FDI inflows to the country last year. This was followed by the services sector, which accounted for 34.1 percent.

In terms of regional performance, Malaysia ranked third among the Asean countries, after Singapore and Indonesia, which attracted FDI inflows of US$38.6 billion and US$13.3billion respectively last year.