Local political issues not affecting foreign investments, says Invest Penang

Invest Penang director and special adviser to the Penang chief minister Lee Kah Choon at the press conference in Bayan Baru today.

GEORGE TOWN: A state agency responsible for attracting investments said today that the current political climate and issues, such as the prime minister’s succession plan, have no bearing on foreign direct investments (FDIs).

Invest Penang director Lee Kah Choon said Malaysia remained an attractive investment destination.

He said while some Malaysians perceived the political narrative to be negative and feared that it could adversely affect FDIs, foreign investors, however, felt differently.

“You see, the (political) noises have not been loud enough to deter investments from coming in. I feel even in the short term, while the political ‘things’ might be negative, it does not affect global investors in the long run,” he said at a press conference today.

Lee was responding to a question on whether the prime minister’s succession plan and other local political issues might influence the decision of foreign investors.

He said the low operating cost and large talent pool in Malaysia, especially in the manufacturing sector, were among the reasons the country was attractive to investors.

He said although Singapore was a top FDI destination in Asean, it lacked space, had a limited talent pool and the operating cost was higher, forcing investors to look for alternatives.

Lee said even Vietnam, which was touted to be highly sought-after by investors, lacked an adequate talent pool in the manufacturing sector.

Malaysia, on the other hand, has “incubated” talent from the electric and electronic (E&E) sector for many decades, with tech transfer to locals already having taken place, especially in Penang.

Lee said foreign investors also liked Malaysia as many have been successful here and the country offered good government incentives and a talent pool to support their investments.

He cited the “northern medical devices belt” comprising Penang, Sungai Petani, Kulim and Taiping, where multinationals were thriving.

But Lee warned that the country had to address a predicted talent shortage in the tech manufacturing sector in the coming years.

He said despite having 50,000 engineering graduates yearly in the country, only 20% of them specialised in manufacturing. He said more needed to be done to overcome this.

Lee said while there was a slew of incentives from the government to attract FDIs in the 2020 Budget, more focus should be given to talent building.

He said with the first phase of the US-China trade deal having concluded recently, the outflow of companies from China might slow down.

Earlier, Lee revealed Penang’s projected approved investment figures for 2019, which he said would easily hit RM14 billion, was driven largely by the electrical and electronics (E&E) sector.

Lee said this was based on the RM13.3 billion from approved investments in the manufacturing sector from January to September last year alone, which was a 247% year-on-year increase, compared to RM5.8 billion for the whole of 2018. It has also created over 15,000 new jobs, he said.

The United States is the largest investor in Penang with RM6.6 billion, followed by Singapore (RM1.8 billion), United Kingdom (RM1.5 billion) and Taiwan, RM880 million.

Lee said a conservative RM5 billion target had been set for Penang this year for FDIs, adding that the target was based on the average calculated from 2009 to 2019. “We expect the investment amount to be lower in 2020.”