Targeted Efforts Needed To Attract Quality FDIs To Malaysia

By Christine Lim KUALA LUMPUR, Dec 28 (Bernama) -- To help boost Malaysia's economic growth and income, more focused and targeted promotional efforts are needed to attract quality foreign direct investments (FDIs) from small and medium enterprises (SMEs) of new emerging sectors as well as high-technology and skills-intensive industries. In the wake of falling government revenues from crude oil and oil-related exports following the plunge in global crude oil prices, there is now an urgent need to expand and diversify income from commodity-based resources to new areas of growth. There is much scope to expand income and attract investments in new emerging sectors such as advanced electronics and technology sectors as well as halal and services industry which can generate further FDI inflows into Malaysia, create jobs and spark multiplier impact on the economy as well as income growth. By capitalising on Malaysia's competitiveness and its strategic position in Asean within the Asean Economic Community as well as its longstanding strong ties with major investors from Japan and South Korea, Malaysia can further attract large-scale investments. Having attracted a lot of investments in the manufacturing sector from the US, Europe, Japan and South Korea, it can further exploit immense potentials for foreign corporations to set up their regional offices here through the principal hub incentives. The Malaysian government introduced them in Budget 2015 in the form of tiered rate of tax reductions based on the amount of value created in establishing regional operations in Malaysia. Foreign-owned entities which set up principal hubs in Malaysia must be locally-incorporated and there will be no local equity or ownership imposed on them. Japan External Trade Organisation (JETRO) Kuala Lumpur Managing Director, Akira Kajita, said Japanese companies in Malaysia had been expanding in Islamic financial services through the setting up of operations hub here. Speaking at a business seminar during a trade and investment mission organised by Malaysian Investment Development Authority (MIDA) in Osaka recently, he said, Japanese investors had also been expanding strongly into other industries in Malaysia, namely, the services sector and new industries such as medical equipment. Highlighting survey findings from the Japanese Chamber of Trade and Industry and JETRO, he said, among the strong features which had attracted Japanese investors to Malaysia were pro-Japanese sentiment, linguistic ability of Malaysians and political stability. However, Japanese investors, he said, had raised issues such as increasing costs of operations in Malaysia. Minister of International Trade and Industry, Mustapa Mohamed, said Malaysia was gearing up to move into specialised high-technology sectors such as ultra-slim light-emitting diode television, the latest technology on flat-screen television, that could generate higher income and not based on low-cost production. Speaking to Bernama during MIDA's trade and investment mission to South Korea and Japan recently, Mustapa said, investors made their decisions to invest in Malaysia based on government's support in building infrastructure to support the expansion of businesses. In this aspect, Mustapa emphasised that Malaysia should raise visibility of its competitiveness and what it could offer to investors to be based in the country. SDP Global President, Hiroyuki Shimominami, said his company, a Japanese producer of super absorbent polymers, decided to set up a manufacturing facility at Tanjung Langsat Industrial Complex in Malaysia's southern state Johor based on its strategic location with international ports, high quality human resources, competitive logistics and costs as well as cooperation from the state government. At an exchange of sale and purchase agreement with Johor Corp in Tokyo recently, Shimominami said, the new manufacturing facility, which was expected to begin operation in the second quarter of 2018, will meet global demand for super absorbent polymers, the raw material for disposable diapers. Dr Ahn Choong Yong, Chairman of South Korea Commission for Corporate Partnership, an agency to support the SMEs in South Korea, said Malaysia, as a fast-growing economy, can be a potential strategic partner for SMEs in South Korea. Speaking at MIDA's business seminar in Seoul recently, he said, the Regional Comprehensive Economic Partnership, of which Malaysia and South Korea were economic partners in the trade agreement, offered immense potentials for further increase of business partnerships between Malaysian and South Korean entrepreneurs. --BERNAMA