THE INFLOW of foreign direct investment (FDI) in Malaysia fell 68% to $2.5 billion in 2020, at the foot of neighboring countries.
Singapore FDI fell 37% to USD58 billion, Indonesia 24% to USD18 billion and Vietnam 10% to USD14 billion.
This is not what I said. This is based on an official report by the United Nations on Trade and Development (UNCTAD).
Malaysia, which was once one of the fastest growing economies in the region, is now lagging behind its neighbors in the economic war against COVID-19.
In fact, if you look at the chart by the World Bank and the MIER projection, there was a relatively significant decline in the Malaysian economy of 2.9% in 2019-2020. It is true that COVID-19 contributes to the global economy but political stability is the main pillar attracting foreign investors to the country.
An Eurocham’s CEO’s statement that Malaysia needs more than a few good words and ‘window dressing’ is in fact very alarming. Some immediate steps need to be taken to improve this situation. We need a strong ‘political will’ for this.
Among which, the government needs to be ready for having ‘sitdowns’ with investors and industry players. Political stability needs to be restored immediately after the COVID-19 threat can be addressed. An emergency proclamation is feared to cause investors to be less confident of our country.
Perhaps we can offer them a more attractive tax reduction incentives, and at the same time strengthen the domestic sector such as manufacturing, services, information technology and others.
A healthy domestic economic cycle is able to attract FDIs. And most paramount is the welfare of the people must be given a top priority.
DATO’ SERI DR AHMAD ZAHID HAMIDI