KUALA LUMPUR, Aug 28 — With RM97.4 billion already in the pocket, Malaysia has topped last year’s first half investments by RM22.4 billion, the government’s investment agency announced today.
The Malaysian Investment Development Authority (Mida) chief executive Datuk Noharuddin Nordin also predicted a brighter job outlook this year as a result of the investment growth.
“In terms of value, there has been an increase of 30 per cent compared to the corresponding period,” he told reporters at a news briefing on investments approved for the first half of this year.
He said the country’s total foreign and domestic investments within the first half of last year had amounted to RM75 billion in comparison, and forecasted that growth will likely increase further despite the continuing gloomy global economic climate.
Noharuddin also pointed out that the number of jobs expected to be created from the projects also increased to 90,881 from 79,747 year-on-year.
“What is interesting to observe is that the number of projects compared to the same period last year, is less.
“We can interpret this as indicating that although we get less projects, the value of each project is much higher than last year.
“In other words, we are meeting the goal of attracting more higher value-added projects,” he said.
The services sector constituted the bulk of investments approved for the first half of the year, amounting to RM58.1 billion or 59.7 per cent, followed by manufacturing sector, with RM22.5 billion or 23.1 per cent.
The primary sector, which includes mining, oil and gas, agriculture, and plantation accounted for RM16.8 billion or 17.2 per cent.
Foreign direct investments (FDI) also increased 71 per cent to RM30.7 billion this year.
“This shows that despite the global economic slowdown, Malaysia still remains a very attractive destination for foreign direct investment,” he said.
Noharuddin said the United States topped the list with RM5.2 billion, followed by Singapore at RM2.2 billion and Japan, RM2.1 billion.
“In the past, we were not recognised as a location for regional or global operations but increasingly, companies are recognising that Malaysia has all the competitive advantage to position itself as a hub for global operations.
“Last time, we used to worry that the dirty work is being done in Malaysia but all the money is being made somewhere else, but increasingly now, we are also capturing those so-called ... tower operations in Malaysia as well,” he said, pointing out that investments from global operations totalled RM4.6 billion this year, surpassing the amount recorded for the whole of last year.
But domestic investments remain the key source of private capital, with RM66.7 billion, at 68.5 per cent this year.
He stressed that one of Mida's goals is to promote quality investment, pointing out that 81 per cent of jobs created in the first half of this year in the manufacturing sector are high-skilled workers.
On the actual flow of funds, quoting figures from Bank Negara Malaysia, Noharuddin said the balance of payment FDIs is RM18.2 billion compared to RM15.9 billion year-on-year.
“The actual investment of operation will commence maybe a year, two years or three years [from the approved date] and this balance of payment figures capture the actual flow of the funds,” he said, stressing that the figure comes from investments approved several years ago.
In terms of gross fixed capital formation (GFCF) taken to represent the total private investment in the country, representing the actual money that is spent as investment, the figure recorded for the whole of last year was RM140.2 billion, while for the first half of this year, it was more than 50 per cent of the figure at RM85.7 billion.
“That means, in all likelihood, by the end of the year we will surpass the GFCF performance for the whole of 2012.
“The investment climate in Malaysia is very positive,” he said.
The services sector, the biggest contributor to this year's approved investment with a total of RM58.1 billion, it is also set to see the most job creations with 50,333 employment opportunities.
Investments were mainly in the real estate, RM25.4 billion, hotel and tourism, RM6.6 billion, transportation, RM6.4 billion and global operations hub, RM4.6 billion.
“So moving forward, what is more interesting is that we are confident that the total investment approved for the year 2013 will exceed that of 2012 [at RM167.8 billion],” Nosharuddin said.
The potential investments consist mostly from FDIs in the chemical and chemical products as well as the electronics and electrical products industries.
