Malaysia's Plunging FDI - What has Najib done (or didn't do)?

Malaysia under Najib is losing out to its neighbours

A lack of confidence in Malaysia's economy has driven foreign direct investment (FDI) away, leaving the once-roaring "Asian tiger" to compete with countries in the Indochina region, said an opposition party yesterday.

The World Foreign Investment Report 2010 released by the United Nations on Thursday showed that FDI in Malaysia plunged 81 per cent last year, trailing behind the Philippines, Vietnam, Thailand, Indonesia and Singapore. "For the first time ever in history, Malaysia attracted less investment than the Philippines," said Mr Tony Pua, the chief economist for the Democratic Action Party.

The Philippines attracted US$1.95 billion ($2.67 billion) in FDI compared to Malaysia's US$1.38 billion, while Singapore raked in the most - more than US$16 billion.

"Among South-east Asian nations, we are now only attracting more FDI than Cambodia, Myanmar, Brunei, Laos and Timor Leste," added Mr Pua.

Prime Minister Najib Razak is determined to lift Malaysia's profile as a destination for foreign investment to help achieve an average gross domestic product (GDP) growth of at least 6 per cent per annum over the next five years.

"Malaysia was the only country where our outflow of FDI amounting to US$8.04 billion is substantially greater than the FDI of US$1.38 billion received," charged Mr Pua.

"Not only are foreign investors unwilling to invest in Malaysia, our own local investors as well as foreign investors who are already in the country have a total lack of confidence in the ability of our economy to generate an attractive return on their investments."

Tengku Razaleigh: We are entering the peer group of Cambodia, Burma and the Philippines as an investment destination. Thailand, despite a month-long siege of the capital, attracted more FDI than we did last year. Indonesia and Vietnam far outperform us, not as a statistical blip but consistently. Soon we shall have difficulty keeping up with the Philippines!

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