Malaysia: MIDA Denies Fall In Foreign Investments Due To Weak Economic Growth

KUALA LUMPUR, Oct 25 (Bernama) – The Malaysian Investment Development Authority (MIDA) has denied a news report which claimed that the decline in foreign investments was due to insufficient economic growth and unconvincing future prospects. In a statement Tuesday, MIDA said the country’s economy had continued to expand at 5.8 per cent in the second quarter of 2017, which was among the highest in the world. “In fact, several international bodies such as the World Bank, International Monetary Fund and Asian Development Bank have projected Malaysia’s economy will grow by more than five per cent in 2017,” it said. On foreign investors who have closed their business operations in Malaysia or relocated to another country, MIDA said in a global economy that had experienced a dynamic change, several companies had implemented business rationalisation. It said changes in labour cost and digital evolution that had transformed the business landscape had caused some companies to restructure their business strategy to ensure they remained competitive and sustainable. “In the January to September 2017 period, a total of 14 manufacturing companies had implemented a rationalisation process, whereby some 2,922 workers had been laid off. However, the majority of them have been absorbed as employees in other companies,” it said. MIDA said some of the 14 companies chose to relocate to neighbouring countries like Vietnam and Thailand due the lower cost of production. It said Malaysia is now more selective in focusing on high-quality investments with emphasis on knowledge-intensive and automation industries in line with Industry 4.0 development. “Nevertheless, several companies operating in Malaysia have decided to expand their business operations. Some 84.5 per cent of the RM9.6 billion approved foreign investments in the manufacturing sector in the first six months of 2017 were additional investments by companies which have already invested in the country,” MIDA said. MIDA is the government's principal agency to oversee and drive investment into the manufacturing and services sectors in Malaysia. -- BERNAMA