Don’t worry Malaysian, we are still better than Cambodia, Myanmar, Brunei & Laos. Malaysia Boleh…Cheers!!
Malaysia's precipitous drop in inward foreign direct investments and an increase in outward foreign direct investments mark a complete lack of confidence in Malaysia's economy
Tony Pua
The recent release of World Foreign Investment Report (WIR) 2010 by United Nations Conference of Trade and Development (UNCTAD) provided a picture that is nothing short of grim and ugly for the Malaysian economy especially in its attractiveness as a local and foreign investment destination. While the headline 81% drop in foreign direct investment (FDI) from US$7.32 billion to US$1.38 billion can be brushed of as a 'blip' due to a global financial and economic crisis in 2008-2009, a more in-depth study reveals that it was certainly not a one-off.
Our country's leadership should instead heed the loud alarm bells the data presented to prevent our economy from drifting aimless to a point of no return. The UNCTAD WIR 2010 data revealed five firsts for Malaysia:
1. For the first time ever in history, Malaysia attracted less investment than the Philippines
Malaysia has lost out to Thailand in FDI for the very first time in 1998 while Indonesia exceeded us recently for the first time in 2005. Vietnam on the other hand, beat us in FDI for the very first time the year before, in 2008. While we have come to accept Thailand, Vietnam and even Indonesia as having gained competitiveness against Malaysia in recent years, we are suffering ignominy of attracting lower FDI compared to the Philippines for the first time ever in history. The Philippines attracted US$1.95 billion in FDI compared to Malaysia's US$1.38 billion.
Among Southeast Asian nations, we are now only attracting more FDI than Cambodia, Myanmar, Brunei, Laos and Timor-Leste. And for the first time ever, what was previously unimaginable that we may one day be compared to countries such as Cambodia and Myanmar is now a real possibility.
2. Compared to the previous year 2008, Malaysia suffered by far the biggest decline of FDI in Southeast Asia
3. Malaysia was the only country in Southeast Asia to have register a net negative Foreign Direct Investment Flow
4. For the first time ever, cumulative Outward FDI Stock exceeded cumulative FDI Inward Stock
5. Barring a “blip” in 2001 when we attracted only US$0.55 billion in FDI, this is the first time we've attracted less than US$2 billion in FDI over the past 20 years