Bad FDI news for Malaysia: Down by 81 percent in 2009
By Aidila Razak | Malaysiakini
A nosedive in foreign direct investments in Malaysia in 2009 follows a continued downward trend in FDI, increasingly overshadowed by regional players, noted a United Nations report.
According to the World Investment Report 2010 unveiled today, FDI plunged 81 percent from US$7.32 billion (RM23.47 billion*) in 2008 to just US$1.38 billion (RM4.43 billion) last year.
(*Calculated based on exchange rate of US$1 = RM3.20650)
The 2009 FDI is less than half of the annual average FDI inflow between 1995 to 2005, which encompasses the long recovery period following the 1997 economic crisis.
Malaysia’s performance also pales in comparison with neighbouring economies like Thailand and Indonesia whose FDI figures did not contract as severely, despite the global financial crisis.
Thailand suffered a decline of US$4.44 billion (RM14.24 billion) while Indonesia saw a more modest drop of US$2.60 billion (RM8.32 billion) in foreign investments in 2009.
The severe dip also places Malaysia in the red for the first time in the last 15 years, with figures for cumulative FDI (see chart right) surpassing incoming investments by about US$1 billion (RM3.21 billion).
Doubts over high income target
Speaking at the UN Headquarters in Kuala Lumpur today, Universiti Malaya economist Rajah Rasiah (at podium in photo) said that Malaysia’s poor performance casts doubts over whether it can achieve the targets set to achieve high income status.