Business

Tuesday November 17, 2009

Mida reviews investment policy

By CECILIA KOK


Agency to promote high-tech, knowledge-based investments with high value added

KUALA LUMPUR: The Malaysian Industrial Development Authority (Mida) is currently reviewing the country’s investment policy to make it more promotive of the development of high-technology, knowledge-based and capital-intensive industries, and less supportive of low value-added ones, the agency’s director-general Datuk Jalilah Baba told StarBiz in an exclusive interview.

The revised version of the investment policy is expected to be unveiled by the Government in the first quarter of next year.

According to Jalilah, Mida is becoming more selective of the types of industries and activities that it wants to attract into the country, and hence, qualify them for incentives.

In this aspect, the government agency is looking at striking out industries and activities that are labour-intensive and have low value added. New investments of such nature will be redirected to other cost-competitive countries.

“We only want to welcome industries that can propel Malaysia to a high-income economy,” Jalilah explained, adding that such bold measures were necessary to help the country escape the middle-income trap.

Datuk Jalilah Baba ... ‘We only want to welcome industries that can propel Malaysia to a high-income economy.’

And in line with the direction of the new economic model for the country, Jalilah revealed that the revised investment policy would focus on new growth areas such as biotechnology, renewable energy, fine chemicals, advanced electronics, petrochemical, machinery and equipment as well as selected services industries.

Over the last one year, the onslaught of the global economic crisis had resulted in a significant decline in the value of investments in Malaysia. Nevertheless, Mida said it was confident of achieving the annual target for total investment value as stipulated under the Third Industrial Master Plan (2006-2020), or IMP3, at RM27.5bil by the end of this year.

For the first eight months of 2009, the total value of approved investments in manufacturing projects stood at RM19.1bil, out of which RM12.2bil were foreign direct investments (FDIs).

Last year, the total value of approved investments in manufacturing projects was RM62.8bil, out of which FDI represented RM46.1bil. That was the highest-ever recorded by the country in terms of both total FDI receipts as well as total approved investment value.

According to Jalilah, Mida would continue to focus on attracting FDI, as it was an important component that could complement domestic investments in helping Malaysia to achieve its Vision 2020 to become a developed nation.

Similarly, the government agency would also focus on promoting domestic investments to make it a more significant contributor to the total investment value in the country.

The value of approved domestic investments in manufacturing projects between 2000 and July 2009 stood at RM142.7bil. The amount represented 41% of the total investments during the period.

Jalilah said the Government’s target was to increase domestic contribution to total approved investments in the manufacturing sector to 60% during the IMP3 period.

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