Malaysia scales UN’s FDI ladder, matches France and Canada

KUALA LUMPUR, June 27 ― Malaysia was rated the 16th best investment destination by the United Nations this year, improving on its 19th place from 2012 and drawing level with France and Canada

The UN Conference for Trade and Development’s (UNCTAD) “World Investment Report 2013” released today comes as inflows into East and Southeast Asia lost steam and fell 5 per cent to US$326 billion (RM978 billion) last year ― its first decline since 2009.

UNCTAD also ranked Malaysia 11th among the top 20 economies with the highest foreign direct investment (FDI) rates of return ― 17 per cent in 2011 ― the same as Paraguay and Guatemala.

“This goes to show that Malaysia continues to be a profitable centre to do business and in terms of prospective host economy, we came up to 16th compared to 19th,” said International Trade and Industry Minister Datuk Seri Mustapa Mohamed at the report launch here yesterday.

The ranking was complemented by official statistics from Putrajaya showing that private investment had increased by 24.3 per cent from the year before to RM140.2 billion in 2012.

Malaysia also kept its third placing for net FDI inflow in 2012 among ASEAN countries, below Singapore and Indonesia.

But Malaysia was also the only country among the top five ASEAN nations to record a decline in net FDI inflow, dipping from US$12.2 billion to US$10.1 billion.

UNCTAD attributed the decline to a global drop in manufacturing, mainly in the decreasing value of “greenfield” projects, or new projects with no prior facilities.

Malaysia’s FDI environment has been described by UNCTAD as “still resilient” as it projected that the global FDI inflows in 2013 will stay consistent with 2012, with an upper range of US$1.45 trillion.

In 2012, global FDI inflows fell 18.2 per cent from US$1.65 trillion in 2011 to US$1.35 trillion.

China, the United States, India, Indonesia, and Brazil topped the prospective host economies list. The US stayed as the largest FDI recipient in 2012 with US$1.68 trillion.

The same report also highlighted that Malaysia led other developing countries as Africa’s biggest investor, leaving even South Africa, China and India behind.