Malaysia attracted RM264.6 billion worth of approved investments in 2022, with the services sector taking the lion’s share of the market, followed by the industrial and primary sectors, according to International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. This amount is the second-largest ever recorded, after 2021, which saw significant one-off investments from Intel and China’s Risen Energy Co Ltd. The approved investments are expected to generate 140,370 new jobs nationwide.
The services sector accounted for RM154 billion, or 58.2% of the total approved investments for the year, while the industrial sector received RM84.3 billion, or 31.9% of the total investments. The primary sector totaled RM26.3 billion, or 9.9% of the total investments.
Domestic direct investments made up 38.3% of the total permitted investments, or RM101.3 billion, while foreign direct investments made up 61.7%, or RM163.3 billion. China was the largest source of foreign direct investments, with RM55.4 billion, followed by the United States, the Netherlands, and Singapore. The majority of the approved investments went to Johor, with RM70.6 billion, followed by Selangor, with RM60.1 billion, Sarawak, with RM28.2 billion, Kuala Lumpur, with RM25.0 billion, and Penang, with RM16.3 billion.
Tengku Zafrul stated that the government’s focus on an efficient economic strategy, a welcoming business climate, political stability, and more coordinated investment promotion by all agencies, both at the federal and state levels, contributed to the high level of approved investments. He emphasized the need to improve these factors further in the near future.
The Malaysian government is working to reset the country’s economy by building sustainability, well-being, and inclusivity, in line with the 12th Malaysia Plan. Tengku Zafrul noted that Malaysia is making efforts to become ASEAN’s digital hub, due to its highly developed information and communications technology infrastructure, robust intellectual property protection framework, and talent pool. The “Academy in Factory” project of the International Trade and Industry Ministry under Budget 2023 is expected to provide a consistent supply of skilled labor that meets industries’ needs.
Tengku Zafrul said, “This will keep Malaysia appealing as a location for enterprises aiming to grow their regional and digital footprint.” However, the deceleration in global economic growth may affect investment decisions globally, according to Tengku Zafrul. The International Monetary Fund and the World Bank have predicted positive but slower economic growth than in recent years, which may impact investments. Tengku Zafrul noted that trade decisions differ slightly from investment decisions, as the latter are based on long-term strategies, and the fundamentals of the nation are crucial.
Despite global difficulties, such as inflationary pressures, economic uncertainties, and climate change, Malaysia’s economy is anticipated to be resilient this year, with a projected growth rate of 4.0% by the World Bank. The government’s growth projection of roughly 4.5% is in line with the IMF’s prediction of a rise of 4.4%.
Tengku Zafrul stated that participation in targeted trade and investment missions, as well as multinational free trade agreements like the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, will boost investors’ trust in the nation and improve the standards of living for Malaysians and the business community.
As Tengku Zafrul said, “With our increased focus on an efficient economic strategy, a welcoming business climate, political stability, and more coordinated investment promotion by all agencies, both at the federal government and state levels, this must be improved even more in the near future.” Malaysia’s ability to attract significant investments, despite global economic challenges, is a sign to the country’s resilience and attractiveness as a business destination.
The government’s efforts to promote investment and improve the business climate are expected to continue, with a focus on sustainability, well-being, and inclusivity. As the country moves forward, it is likely that Malaysia will remain a key player in the regional economy, with a strong focus on digitalization and innovation. With the support of the government and the private sector, Malaysia is well-positioned to overcome the challenges posed by the global economic slowdown and continue to grow and prosper in the years to come.
The country’s highly developed infrastructure, robust intellectual property protection framework, and talent pool make it an attractive location for businesses looking to expand their operations in the region. As the Malaysian government continues to work towards creating a more welcoming business climate, it is likely that the country will see even more significant investments in the future.
