Friday 29 Mar 2024
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KUALA LUMPUR (Dec 7): Malaysia received US$5 billion (RM22.06 billion) in health-related greenfield investments from 2008 to 2021, according to a recent report by the United Nations Economic and Social Commission for Asia and the Pacific (Escap).

In a statement on Wednesday (Dec 7), Escap said the ongoing Covid-19 pandemic has exposed critical cracks in health sector investments in Asia and the Pacific, with the sector's foreign direct investment (FDI) dropping by 45% from 2019 to 2020 and continuing to decline to 34% in the first three quarters of 2022.

The Asia-Pacific Trade and Investment Trends 2022/2023 by Escap further highlighted that the pharmaceutical industry attracted the highest amount of FDI (US$32 billion) between 2008 and 2021 — significantly more than investments in the medical devices (US$20 billion), biotechnology (US$17 billion) and healthcare (US$10.8 billion) subsectors.

It said the US was the largest investor, making up 35% of all health-related greenfield investments (2008-2021), followed by Switzerland, Japan, Germany and France.

China (US$33 billion) was the largest receiver in the same period, followed by India (US$14 billion), Singapore (US$9 billion) and Malaysia (US$5 billion).

Escap said many countries in the region such as Sri Lanka, Brunei, Bhutan, Timor-Leste and Thailand have invested in the health sector as a core policy objective.

However, it said certain key challenges continue to exist, such as the limited capacity of countries to attract the quantity and quality of investment needed due to poor regional and domestic investment ecosystems, poor infrastructure and related services, as well as the lack of capital, technology and skills.

United Nations under secretary general and executive secretary of ESCAP, Armida Salsiah Alisjahbana, said regional cooperation and political commitment to openness for investment will be crucial to helping economies build back better and harness the potential of FDI.

Escap said regional merchandise trade growth will be limited in 2022 following a global demand slowdown in the second half of this year. Escap forecast merchandise trade to total US$19 trillion, with real exports expected to grow by 3% while imports are seen to contract by 0.3%.

It said inflationary pressures also dominated in 2022 with varying impacts across the region.

Assuming that inflation will be effectively curbed during next year, regional merchandise trade is expected to continue growing modestly in 2023 with 1.6% growth in real exports and 0.7% in real imports, it said.

The agency said Asia and the Pacific services exports are expected to grow at above the global average of 8.7% while imports  are expected to grow at above the global average of 9.8% in 2022, supported by a vigorous travel sector, heightened demand for ICT services and a less constrained transport sector.

However, for 2023, Escap estimated the value of these sectors to grow slightly below this year's performance, at 7.5% for exparts and 5% for imports.

Escap said greenfield investments in the region have remained resilient, growing by 6% in 2022 despite the global geopolitical and economic pressure.

For the first time, India outpaced China and became the largest destination and source of greenfield FDI (US$60 billion of inward FDI and US$35 billion in outward FDI).

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