FDI in Malaysia down from $5.5 bn to $3.9 bn

Malaysia falls behind Singapore, Vietnam and China in attracting FDI and is far from becoming the new Asian metropolis; FDI dropped from $5.5 billion in 2001to $3.9 billion in 2006.

Chua Hak Bin, an economist with the Singapore-based firm Citigroup Global Capital Markets, also said attracting more overseas money would be hard.

“Malaysia has really fallen behind Singapore, Vietnam and China in attracting foreign direct investment,” Chua said. Part of the reason could be China’s popular free trade zones and Singapore’s relatively low corporate taxes.

Officials have embarked on a marketing offensive in Singapore to sell the Iskandar Development Region, but so far it has not attracted major foreign investment.

Malaysia, Southeast Asia’s third largest economy, has seen foreign direct investment steadily declining. In 2006 it amounted to an estimated $3.9 billion compared to $5.5 billion in 2001.

He was hoping to boost his government’s popularity by trying to spread economic growth across the country, they said. The plans were “highly politically motivated” ahead of an anticipated early election, Citigroup’s Chua told AFP.

Malaysia official economic growth forecast for 2007 is 6%, behind that of rivals like China and India while its economy grew 5.9% in 2006.

Source: Livemint

Read:

EU says Malaysia’s ethnic policies a barrier to trade

NEP threatening inter-religious, inter-ethnic good relations

ANALYSIS – Malaysia’s raw nerve: affirmative action

NEP spawned corruption, cronyism, ethnic discrimination, widened intra-ethnic disparities

Thierry Rommels says Malaysia’s affirmative policies are about protectionism and discrimination

EU’s envoy blasts Malaysia’s privileges to majority Malays

Najib: We have the right recipe for success

Malaysian government grapples with financial scandal at port ahead of expected elections

Malaysian authorities are facing a scandal over debts allegedly exceeding US$1 billion (euro750 million) incurred by the country’s main port authority, sparking concerns about a possible government bailout, politicians said Tuesday.

The issue is politically sensitive for Prime Minister Abdullah Ahmad Badawi — who is widely expected to call for general elections before mid-2008 — because he has repeatedly pledged to boost transparency and battle the financial mismanagement that has plagued high-profile Malaysian projects in the past.

Abdullah said last week he needs more details and refused to comment on media reports saying the Port Klang Authority has racked up debts totaling about 4.6 billion ringgit (US$1.3 billion; euro960 million) because of problems with the Port Klang Free Zone, a much-hyped shipping area that opened in western Malaysia last year.

Fears mounted that troubles with the 1,000-acre (400-hectare) PKFZ could hurt investor sentiment after the Dubai-based Jebel Ali Free Trade Zone Authority said last month it was pulling out of a pact to manage the zone due to what it called strategic reasons.

“The PKFZ scandal has affected the confidence of both foreign and local investors. They are watching the matter very closely,” said Ronnie Liu, an official in the opposition Democratic Action Party. He has filed a police complaint seeking an investigation into land deal irregularities and cost overruns that are believed to have triggered the debts.

Port Klang Authority Chairman Chor Chee Heong said Tuesday he was busy with meetings and declined to comment.

Source: BusinessWeek, The China Post, Forbes, Houston Chronicle, Wall Street Journal

Read:

Malaysian Govt’s hand forced in bailout of Port Klang Free Zone

Port Klang Free Zone had problems since 2003

Port Klang Authority bought encumbered property from Kuala Dimensi Sdn Bhd ?

Transport Minister, Chan Kong Choy did not reply to Jafza re Port Klang Free Zone difficulties

Port Klang Free Zone, a MYR4 billion white elephant ?

PAC calls for hearing on RM4.6b PKFZ

Khairy in the limelight

Source: The Star

Read:

Khairy Jamaludin