FDI in manufacturing post-GE14 surges 379%, says Guan Eng

Finance Minister Lim Guan Eng says the surge in FDI shows  foreign investors confidence in Malaysia is resurgent.

PETALING JAYA: Total approved foreign direct investments (FDI) in the manufacturing sector from May to September this year hit RM35 billion compared to RM7.3 billion in the same period of 2017, Finance Minister Lim Guan Eng announced today.

“This demonstrates that foreign investors’ confidence in Malaysia is resurgent, with a RM27.7 billion or 379% hike in the said figures, after the peaceful transition of power that took place on May 9, 2018,” Lim said in a statement quoting the Malaysian Investment Development Authority (Mida) figures.

He said the figures do not include some of the more recent FDI approvals, including the RM1.5 billion which will be invested by Nasdaq-listed Micron over the next five years, in its solid-state drive assembly and testing centre of excellence in Penang.

For the first nine months of 2018, FDI in the manufacturing sector rose to RM49 billion, from RM14 billion in the same period last year.

Lim said the approved FDI is for investment across various manufacturing industries and companies from different regions.

Approved FDI from China led the way at 32% of the total, followed by Indonesia at 18.4% and the Netherlands at 17%.

FDI from the United States (6.4%), Korea (5.0%), Japan (4.3%) and Singapore (2.5%) were also approved from January to September.

Lim said the figures mentioned by former prime minister Najib Razak referred to the actual foreign direct investment in realised value that flows in as found in the balance of payments documents.

“It is a lagged indicator, which means that the low and falling figures reflect the past efforts to attract FDI carried out before the change of power took place.

“Unlike figures cited by Datuk Seri Najib, the RM49 billion approved manufacturing FDI statistics from Mida are forward-looking in nature in terms of potential investment and confined to the manufacturing sector only.

“The realisation of the approved manufacturing FDI projects will be reflected in the actual FDI statistics as recorded in the balance of payments in the future,” he said.

Lim said the full amount of approved manufacturing investments will be realised progressively over time and not in one lump sum at one go.

Such realised value will be in accordance to the schedule of the construction of the facilities, such as factories which may take up to two years.

“The government is working to ensure the approved manufacturing FDI will be realised as soon as possible in order to hasten economic growth for the well-being of the rakyat.

“The resurgence in approved FDI numbers are a positive indicator of encouraging economic growth in the future.

“The government will press on its efforts to attract high-quality FDI to provide well-paying jobs and career growth opportunities for Malaysians and business opportunities for the small and medium enterprises (SMEs) as part of the larger vendor development ecosystem.

“At the same time, the government will continue to work with existing companies to ensure that their approved projects are smoothly implemented and executed,” he said.