Malaysia took in RM48.1 billion in foreign direct investment (FDI) in 2021. In 2019, the last year before the pandemic, the figure was RM32.4 billion, and in 2020 it dropped to RM13.3 billion. The numbers come from the Department of Statistics Malaysia (DOSM), as cited by the Malaysian Investment Development Authority (MIDA).
DOSM put most of the gain down to a bigger net inflow into equities and investment fund shares. MIDA read the result as proof of resilience and as a sign that Malaysia lets investors take capital, interest, dividends and profits back out.
Where the money came from and went
The United States, Singapore and the United Kingdom were the main sources. Manufacturing took RM29.5 billion, or 61.4% of the total. Services followed with RM12.0 billion (24.9%), and mining and quarrying drew RM5.8 billion (12.1%). Agriculture got 1.5% and construction 0.1%.
Inside manufacturing, electrical and electronics, transport equipment and other manufacturing industries pulled ahead of the rest, together making up 62.4% of manufacturing FDI inflows. New projects did especially well. Greenfield investment value rose 240% in 2021, helped by large semiconductor projects.
The global picture
The United Nations Conference on Trade and Development (UNCTAD) reported in its World Investment Report 2022 that global FDI inflows rose 64% to USD1.58 trillion in 2021. That beat the 2019 level of USD1.48 trillion by 6.9%. Mergers and acquisitions, favourable financing conditions and infrastructure-related fiscal stimulus drove the jump.
In Southeast Asia, inflows climbed 43.6% to USD175.3 billion after falling 30.2% in 2020.
Approvals point ahead
MIDA, the main investment promotion agency under the Ministry of International Trade and Industry, tracks approved FDI as an early indicator of future inflows. It approved RM208.6 billion in 2021, the highest since 2006. Electrical and electronics accounted for 81.5% of approved manufacturing FDI, or RM146.3 billion. Projects approved included Risen Solar Technology, Intel and AT&S.
In the first quarter of 2022, approved investments totalled RM42.8 billion from 910 projects. Foreign sources supplied RM27.8 billion of that, 65%. Approved projects usually take 12 to 24 months before they are carried out and start to count as realised investment.
As of 7 June 2022, MIDA had 268 projects worth a proposed RM14.4 billion in its pipeline for manufacturing and services. The Milken Institute’s 2022 Global Opportunity Index ranked Malaysia No. 1 among emerging Southeast Asian countries for its potential to attract foreign investors.
Sources
Sources
- Malaysia's Foreign Direct Investment (FDI) Inflows Rebounds Above …
- Investment flows to developing Asia defy COVID-19, grow by 4%
