A Singapore-based analyst says the Najib government's structural reform plan has helped to improve Malaysia’s ranking in the competitive index calculated by the World Economic Forum.
SINGAPORE: Malaysia has the potential to be an attractive broad-based foreign direct investment (FDI) destination, going forward, says Anthony Yau, Head of Asian Emerging Markets at State Street Global Advisors.
“FDI inflows into Malaysia have come primarily from Japan and Singapore, with the majority targeting the manufacturing sector.
“The successful implementation of the government’s structural reform plan would go a long way to attracting more inflows,” he said.
Yau said that if the Economic Transformation Programme (ETP) initiated by Prime Minister Najib Tun Razak succeeded in significantly raising Malaysia’s Gross National Income and per capita income, it would be beneficial in improving the country’s perception in the foreign investors’ eyes.
He said important sectors that have been identified in the programme are National Key Economic Areas for development such as energy, palm oil and financial services.
“The ETP’s key element is the extent of capital spending by government-linked companies,” he said.
To a question on whether policies enacted by the Malaysian government was good enough to promote Malaysia as an investment hub, Yau said: “In general, the Malaysian government’s policies are sufficient to promote the country as an investment destination.”
He said the government’s structural reform plan has helped to improve Malaysia’s ranking in recent years on both the competitive index calculated by the World Economic Forum and the ease of doing business survey by the World Bank.
To further improve competitiveness, Yau said Malaysia needs to work on addressing corruption issues as its ranking on Transparency International Corruption Perception Index has slide in recent years.
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