Talk to foreign investors about concerns, Mida told
PETALING JAYA: The federal government should set up a dialogue with foreign investors regarding their concerns, say economists.
Goh Lim Thye, a senior economic lecturer at Universiti Malaya, said: “The policymakers should set up a dialogue to listen, discuss and act upon them. We should be more sensitive to any complaints that could prevent Malaysia as the preferred destination for foreign investment.”
Speaking in response to a report about investor flight, he urged the government’s investment agency, Malaysian Investment Development Authority (Mida), to be “more proactive in rectifying the issues instead of talking down the criticism”.
Mida said last week that foreign investor confidence remained high despite a Singapore newspaper report about foreign investors fleeing Malaysia because of political instability. Mida said the report was “incorrect”.
The UN Conference on Trade and Development has reported that foreign investment in Malaysia fell by 68% to US$2.5 billion in 2020.
Yeah Kim Leng, a professor of economics at Sunway University, also said government agencies should be more responsive to investors’ concerns.
He said Singapore consistently captured 50% to 60% of the foreign investment to Asean members because of its political and economic environment.
He expected an increase in activities by multinational companies because of changing regional and international competition and market dynamics.
“Global production networks and supply chains are in a constant flux. The pace of industrial change has picked up due to rapid technological advancements, regional trade agreements and the continuing US-China trade and decoupling risks.
“As such, we will see an increase in exits and entries by multinational corporations,” Yeah said.
As foreign firms relocated production facilities that were no longer competitive in Malaysia, there should be strong investment growth, with inflows into higher value industries exceeding the outflows, he said.
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