ID :
196068
Wed, 07/20/2011 - 13:06
Auther :
Shortlink :
https://oananews.org//node/196068
The shortlink copeid
DDI CAN BE A BUFFER DURING GLOBAL ECONOMIC UNCERTAINTIES
KUALA LUMPUR, July 20 (Bernama) -- The government's policy to encourage more domestic direct investment (DDI) is timely as it can be a buffer for generating economic growth, especially in times of global economic uncertainties.
Malaysian Investment Development Authority's chairman, Sulaiman Mahbob, said currently, the DDI ratio versus the foreign direct investment (FDI) was 40 per cent and 60 per cent respectively and the government aimed to balance it.
"We got to nurture domestic investors beyond just construction, plantation and small and medium industries and move towards services and manufacturing," he said.
He said this to reporters after the launch of the book, "Musings of a Financial Economist" -- a collection of articles on key economic issues by Malaysian Rating Corp Bhd's chief economist, Nor Zahidi Alias, here Wednesday.
Hence, local entreprenuers should look into revamping their business models and take advantage of the incentives provided for key areas that the government is focusing such as services under the Economic Transformation Programme (ETP).
The government has earmarked 12 national key economic areas among others, namely, financial services, oil, gas and energy, education, tourism, wholesale and retail, electronics and electrical, healthcare and palm oil.
Echoing Sulaiman, Nor Zahidi also felt that the government was pushing for DDI under the ETP to safeguard the country's interest in investment flow.
"If anything happens (global economic downturn) that will effect FDI, we will at least have the DDI to support the country's economy," he said.
However, he cautioned that there were possibilities of DDI being affected in case of a double deep in US due to Malaysia's exposure to the market.
"We are keeping an eye on Aug 2 (the deadline for the US to increase its debt ceiling). My personal opinion is that they will increase the debt ceiling simply because they can't effort to have another 1937 incident," he said.
The American economy experienced recession in 1937-38.
During global recessions, it is highly likely for even the DDI to decline as companies will take a cautious stance during such situation, he warned.
On the positive note, he said, despite the prevailing uncertainties, especially in the US and Europe, Malaysian consumption level was still good.
"The good thing is that our consumption is still high and our monetary policy is still accommodative to spur private consumption, which will in turn boost the country's economy," he said.
Malaysian Investment Development Authority's chairman, Sulaiman Mahbob, said currently, the DDI ratio versus the foreign direct investment (FDI) was 40 per cent and 60 per cent respectively and the government aimed to balance it.
"We got to nurture domestic investors beyond just construction, plantation and small and medium industries and move towards services and manufacturing," he said.
He said this to reporters after the launch of the book, "Musings of a Financial Economist" -- a collection of articles on key economic issues by Malaysian Rating Corp Bhd's chief economist, Nor Zahidi Alias, here Wednesday.
Hence, local entreprenuers should look into revamping their business models and take advantage of the incentives provided for key areas that the government is focusing such as services under the Economic Transformation Programme (ETP).
The government has earmarked 12 national key economic areas among others, namely, financial services, oil, gas and energy, education, tourism, wholesale and retail, electronics and electrical, healthcare and palm oil.
Echoing Sulaiman, Nor Zahidi also felt that the government was pushing for DDI under the ETP to safeguard the country's interest in investment flow.
"If anything happens (global economic downturn) that will effect FDI, we will at least have the DDI to support the country's economy," he said.
However, he cautioned that there were possibilities of DDI being affected in case of a double deep in US due to Malaysia's exposure to the market.
"We are keeping an eye on Aug 2 (the deadline for the US to increase its debt ceiling). My personal opinion is that they will increase the debt ceiling simply because they can't effort to have another 1937 incident," he said.
The American economy experienced recession in 1937-38.
During global recessions, it is highly likely for even the DDI to decline as companies will take a cautious stance during such situation, he warned.
On the positive note, he said, despite the prevailing uncertainties, especially in the US and Europe, Malaysian consumption level was still good.
"The good thing is that our consumption is still high and our monetary policy is still accommodative to spur private consumption, which will in turn boost the country's economy," he said.
