The Straits Times, February 22, 2012
By Hazlin Hassan, Malaysia Correspondent
Malaysia's net foreign direct investment (FDI) inflow surged to RM32.9 billion (S$14 billion) last year, surpassing pre-Asian economic crisis levels by RM3.8 billion.
Nearly 72 per cent of the investments came from Asian economies, International Trade and Industry Minister Mustapa Mohamed said yesterday, adding that the country will continue to maintain the same figure this year despite the uncertain global economy.
Japan topped the list of FDI inflow, followed by South Korea, the United States, Singapore and Saudi Arabia.
Manufacturing was the largest contributor to FDI at RM16.5 billion, followed by services (RM9 billion) and mining (RM7.3 billion).
Quarrying was also a top-performing sector, and together with mining, recorded a 132 per cent increase in investments.
Sarawak drew the highest amount of approved investments at RM14.35 billion, followed by Penang (RM14.04 billion), Sabah (RM13.68 billion), Selangor (RM13.5 billion) and Johor (RM12.6 billion).
'The growth can be attributed in part to projects launched under the government's Economic Transformation Programme,' Bank Islam chief economist Azrul Azwar told The Straits Times, referring to a programme meant to revive the country's slowing economy through direct investments.
However, he said only real inflows should be counted as approved investments may not materialise. He added that the rebound in investor sentiment last year was in line with global trends.
Global FDI inflows rose by 17 per cent to US$1.5 trillion (S$1.9 trillion) last year, according to the United Nations Conference on Trade and Development Global Investment Trends Monitor last month.
CIMB Bank chief economist Lee Heng Guie said there were positive factors on the domestic side to attract FDI, but he predicted a more moderate growth for this year. 'Due to the very uncertain external environment, major advanced economies are still trying to recover. Domestic investors may also be cautious due to weak exports. There are positive factors but these are neutralised by external headwinds,' he added.
