ASEAN KEY DESTINATIONS
May 12, 2008
Actual foreign direct investments (FDIs) into Malaysia rose almost a third to 29.1 billion ringgit ($9.05 billion) last year, the government said on Wednesday, amid worries over competition from neighbouring countries and a sluggish global economy.
Second Finance Minister Nor Mohamed Yakcop was quoted by Reuters as telling parliament that overall investments, including by domestic investors, rose 19.1 percent to 72.5 billion ringgit in 2007 from a year earlier.
"The FDI inflows into Malaysia are becoming more capital-intensive," he said in a speech to wind up a debate on the ministry's work.
"This is in line with the government's policy to promote capital-intensive investments with higher value-added and high technology."
Several opposition lawmakers had raised concerns that Malaysia was losing out FDIs to China, Vietnam and other cheaper locations.
In February, then Trade Minister Rafidah Aziz said approved FDIs into the country jumped more than two thirds to $13.7 billion in 2007, but economists saw the growth pace easing as the global economy slows.
Nor Mohamed said the high private investment and consumption were crucial to support domestic economic growth -- forecast at 5-6 percent this year versus 6.3 percent in 2007 -- in the wake of uncertain global economic outlook.
He said currently 87.4 percent of Malaysia's economic growth was driven by domestic demand.
"The government will continue to strike a balance between investments and consumption to ensure long-term economic stability," he added.