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Friday July 3, 2009
Foreign direct investment expected to fall by 50% in 2009
Mustapa: Malaysia will continue to draw FDIs in mid term
KUALA LUMPUR: Foreign direct investments (FDIs) are expected to fall by half this year from RM46.1bil last year, says Malaysian Industrial Development Authority deputy director-general Wahab Hamid.
According to Wahab, 2009 is expected to be a challenging year as only about RM4.2bil of FDIs had been approved in the first five months this year.
“The figure may reach RM27.5bil next year,” he said after the launch of the International Trade and Industry Report 2008 yesterday.
According to International Trade and Industry Minister Datuk Mustapa Mohamed, Malaysia is expected to continue attracting investments in the medium term, boosted by several liberalisation measures that have been announced, the most recent being the deregulation of the Foreign Investment Committee guidelines.
Minister of International Trade and Industry Datuk Mustapa Mohamed (right) holding the Malaysia International Trade and Industry report 2008 with the ministry's secretary-general Tan Sri Abdul Rahman Mamat on Wednesday. - Starpic by Azman Ghani He said Malaysia’s new trade and investment promotion strategies could also help boost FDIs.
“Ten trade and investment missions as well as 25 specific project missions have been planned for 2009,” he said.
Malaysia’s commitment to reduce tariffs up to zero by 2010 is expected to boost exports and investments.
“Our commitment to opening up our market will change investor sentiment,” Mustapa said.
Import duties on 2,123 products such as fish, palm oil, minerals, chemicals, iron and steel would be completely eliminated by Jan 1, 2010. And the import duties on tobacco, tobacco products and tropical fruits, which currently range from 10% to 100%, would be brought down to 5%.
“For rice and rice products, which are highly sensitive products, the duties which are currently at 40% would be reduced to 20%,” Mustapa said.
Given the poor economic conditions in major economies such as the United States, European Union and Japan, Mustapa noted that economic improvement in the country could only be felt towards the latter part of this year and in 2010 after the effects of the stimulus packages by Malaysian and foreign governments kick-in.
The current forecast for Malaysia’s gross domestic product growth is between minus 4% and minus 5% for 2009.
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