Justice For All Malaysia

FDI outflow at record high

Posted on: September 25, 2008

FDI outflow at record high
Andrew Ong | Sep 25, 08 8:37am
Foreign direct investment (FDI) outflow in Malaysia has exceeded inflow for the first time ever, underscoring fears that investors might be losing confidence in the government and its economic policies.

MCPX

lim teck ghee“This is a period when we should be riding the commodity boom. Perhaps this is a sign of a prolonged lack of confidence in the government and its economic policies,”  economist Dr Lim Teck Ghee told Malaysiakini.

malaysia foreign direct investment fdi 2008 250908“There is a need for a comprehensive analysis which is not only focused on statistics. We must ask ourselves what are foreign and local investors telling us about our market and policies.”

According to the United Nations Conference on Trade and Development World Investment Report 2008 released today, FDI outflow in Malaysia surpassed inflow by RM8.99 billion in 2007.

Malaysian outflow had surged by 81.9 percent to RM38 billion in 2007 from RM20.89 billion the year before. Inflow, on the other hand, increased by only 39 percent to RM29.07 billion versus RM20.91 billion in 2006.

Within the 10-member Asean trading bloc, Malaysia was glaring as the only country to record a negative flow.

This took place despite the fact that the Southeast Asian region recorded its highest ever FDI inflow – which leapt 81.1 percent to RM209.2 billion in 2007 from RM115.5 billion in 2006.

More Malaysians investing abroad

zainal aznam yusoff unctad wir event 240908Zainal Aznam Yusoff, a member of the Malaysian Economic Council, told a the press conference held after the report’s release that the net outgoing was caused by Malaysians investing more of their money abroad.

“Malaysia is actively integrating and going into Asean and beyond,” said Zainal, adding that a sizeable chunk of the off-shore investments made by Malaysians went into countries such as Singapore, Indonesia, China and Middle-East.

Building infrastructure, such as telecommunications, agriculture, manufacturing, finance and mining were favoured investments. “We are quite diversified,” Zainal said.

He said another reason for the greater outflow was because many Malaysian firms had partaken of cross border acquisitions – a stance in keeping with the government’s call to invest abroad.

“The overall balance of payment is fairly healthy, despite the sizeable outflow,” said Zainal when quizzed about the figures.

“So you can’t generalise. You must look at the second and third round effect of the benefit you get from the repatriation of money that comes back here and what you use it for,” he said.

Act now to avoid marginalisation

Zainal, however, said the latest data indicated that FDIs might trend further down, given the global economic downturn.

Asked if the various economic growth corridors planned by the government could arrest or offset the declining trend, Zainal said the growth zones were at still infancy stage and thus any inflows may not be reflected by next year.

“I very much doubt you will see very much substantial inflow. There are a lot of stories about investors making promises. It is one thing to make a commitment, but the actual bringing in of the funds will take some time,” he said.

However, he expects Iskandar Malaysia (formerly known as Iskandar Development Region) to be the first to show results.

Menwhile, Lim – a former World Bank economist – urged the government to take quick action or risk facing further marginalisation from global investors.

“We must find what kind of changes are needed to meet the investors needs, such as changes to the New Economic Policy, which continue in labour, property and the stock market and they will constrain our development,” Lim said.

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Must Attend Program

Please go to this link: http://justice4allkuantan.wordpress.com/2008/10/25/invitation-public-forum-the-isa-and-the-police-reform-process-whats-next-after-pak-lah/
To sin by silence when we should protest makes cowards of people - Emily Cox

Siphoning EPF money

On 'Why should Valuecap borrow from EPF?' Syed Shahir Syed Mohamud: MTUC condemns the government's move to bail out Valuecap to support the local stock market using RM5 billion from EPF, as the provident fund is the custodian of the workers' money and not some sort of ‘automated teller machine' for the government.
If at all the EPF were to lend its money to the government, it has to be under the condition that there be transparency and accountability in the activities for which the money has been purposed. We want to know who is doing what with the money that belongs to the workers. This is the hard-earned money of the workers, their retirement plan. How is this bailout plan going to benefit the workers? We also question the reason for this bailout. If the economic fundamentals in Malaysia are strong and reserves sufficient as has been stated several times by the government, then why is there a need to offer so much money to the GLCs? Second Finance Minister Nor Mohamed Yakcop should prove how the EPF would profit from this loan. Bernama had reported that Nor had given the assurance that the loan given out by EPF would reap profits for the fund judging from Valuecap's past performance. But where is the paperwork and calculations to show that this move will benefit the EPF? MTUC is concerned that the loan might be mismanaged or misused and this, in turn, would affect the returns for the contributors. Mere assurances are not enough. We want to proof that this RM5 billion will not go down the drain. (The writer is president, MTUC). Sharyn: The government wants to use our pension money to prop up the Malaysian stock market which is the playing field of the rich people. If so, the government must ensure that the EPF account holders - who are predominantly the poor to average citizens of Malaysia - be guaranteed all of our pension money with a compound 8% growth (interest). It's so selfish and sick of the government to use the poor's pension money to help the rich to make more money with all the risks taken by the poor/average citizen. We can better use the RM% billion loans to Valuecap for our children's education, shelter, medical bills etc. Why not get those rich people to prop up the share market instead? Why should they park their money overseas and gamble with our EPF money instead? Kumar14: Who is behind this Valuecap organisation? Why suddenly, this separate entity is allowed to access funds from the EPF? Are they capable enough to handle it or is it just another desperate and blind move? It has been a very infamous trend where the people's funds are channeled to a company for investment purposes and suddenly POP! the funds disappear and there is nobody to be held responsible but a RM2 shell company. Charge who? Sue whom? The RM2 company (just a registered name)? We have seen this many times. People in power and with connections allow such things to go through and reap/rob the people's wealth and then blame it on organisations which actually don't exist. What if a lot of EPF funds are looted via such scams and nobody is to be pointed at? Where will the government get the funds to replenish the EPF? The people are very bored, disappointed, angry and frustrated at seeing all these dumb and unaccounted for measures being allowed by the government with lame excuses. Please, somebody verify the true purpose, integrity and capability of anybody attempting to use the people's fund.

Raja Petra

Photobucket Ihsan dari blog Go!Malaysian http://gomalaysian.blogspot.com/

ANWAR IBRAHIM

A prosperous future is indivisible from a firm commitment to the principles of distributive justice, the rule of law and a profound respect for human rights.

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