KUALA LUMPUR (July 12): Malaysia expects to beat its approved investments target this year by working with, rather than competing against, its neighbors.
The Southeast Asian country has already reached 47% of its full-year goal of RM113.5 billion (US$27.6 billion) in the first quarter, with the following two months showing increases compared to 2018, Malaysia Investment Development Authority Chairman Abdul Majid Ahmad Khan said in an interview. The target is a drop from the RM201.7 billion achieved last year.
The region, which has a combined gross domestic product of US$2.8 trillion, is seeking ways to withstand the impact of a trade war that has widened beyond the US and China.
“We don’t want to be competing or pinching from each other, we want to complement each other,” Abdul Majid, who took the post in April, said at his office in Kuala Lumpur. “Each country has its own niche and strengths. That’s the ecosystem we are working on.”
Malaysia borders regional giant Indonesia and manufacturing stronghold Thailand, so it mustn’t directly compete with them, he said. Instead, the country will seek to draw in higher-technology investments in sectors including medical devices, aerospace, and biotechnology.
Malaysia will position itself as a regional supply hub, taking advantage of its location near maritime routes like the Strait of Malacca that connects India to Southeast Asia to China. The country has many ports, a growing infrastructure network and robust rule of law, which makes it an attractive jumping-off point for multinational companies, he said.
Investments have been a bright spot amid Malaysia’s slowing growth outlook. The central bank warned this week of downside risks to its 4.3% to 4.8% forecast, even as trade diversions could add about 10 basis points to this year’s expansion. The country seeks to attract investors fleeing trade tensions by offering incentives, simplifying processes and ensure returns.
“We promise them it’s a profit center,” Abdul Majid said. “We’d like to assure the investors, if you come here, you’d not only be able to sustain, but reinvest and expand.”