Malaysia attracts lot of foreign investment despite political turmoil

July 7th, 2008 - 2:09 pm ICT by IANS  

Kuala Lumpur, July 7 (IANS) Vivo Bio Tech Ltd, an Indian firm planning to invest 450 million ringgit ($140 million), is among the many foreign investors thronging Malaysia, ignoring its current political turmoil. Planning to build a research and manufacturing plant in Malacca for treatment of diseases through its subsidiary, Vivo Bio Malaysia Sdn Bhd, the Indian firm is in the company of Germans, Japanese and Americans who have made foreign direct investments (FDIs) worth 16.6 billion ringgit since March.

According to the Malaysian Industrial Development Authority (Mida), the country’s FDI inflow this year is expected to surpass last year’s 33.4 billion ringgit.

Outgoing Mida director-general R. Karunakaran, who is of Indian origin, was quoted by The Star newspaper as saying that the first four months of 2008 saw investment worth 23.9 billion ringgit being approved.

Karunakaran said the amount did not include newly announced projects by the Japanese Ibiden Co Ltd, Germany’s Q-Cell and the US-based SunPower Corp and Honeywell International Inc. The combined investment by the three is expected to hit nine billion ringgit.

Malaysia also attracted a fair number of foreign investors from the Gulf Cooperation Council (GCC) countries comprising Saudi Arabia, Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates.

Malaysia faced the ides of March in the form of an election upset wherein the ruling Barisan Nasional (BN), a conglomerate of the three main ethnic groups, lost its traditional two-thirds majority support in parliament.

The BN was victorious, but seriously weakened with the first-ever emergence of an opposition alliance, since named Pakatan Rakyat (PR), which has 82 members in parliament and controls five of the 13 states.

Ther has since been speculation about floor-crossing among parliamentarians but it has not materialised so far. However, Malaysia’s latest political scandal, involving sodomy charge against opposition leader Anwar Ibrahim, has made international headlines.

Economic concerns have also risen with the hike in fuel prices that have sent prices of essential commodities shooting up. Citing this year’s statistics and views of business leaders, the newspaper said the fears of investors going away due to political uncertainty have proved wrong.

Global approval has come in the form of the recent Global Competitiveness Report 2007-2008, according to which Malaysia’s competitiveness has moved up to 19th position from 23rd in 2007.

Also, Kearney’s 2007 Global Services Location Index (GLSI) indicated that Malaysia was among the top three best destinations in the world for outsourcing activities.

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