PETALING JAYA，Mar 29: Former deputy international trade and industry minister Ong Kian Ming has given the government three simple ways to make Malaysia attractive for foreign direct investment (FDI) again.
He said government agencies’ guidelines and goals for attracting investment needed to be continuously overhauled, pointing out that its definition of “strategic investment” was often outdated.
In a statement today, the Bangi MP also said there might not be clear enough guidelines for major manufacturing investments from the likes of China in sectors like steel, glass and even paper.
“What is the expected key performance index (KPI)? What is the expected impact on local industries and what are the environmental standards which need to be adhered to?
“Some of these guidelines cannot be written by Miti alone and would need the cooperation of other ministries and agencies,” he said, adding that investment guidelines and goals must also be followed after being set.
Another step would be to consolidate the existing investment promotion agencies (IPAs) and make them more responsive, said Ong, citing how even the World Bank had remarked that Malaysia had too many IPAs.
Admitting that there was a lack of time and political will to address this when Pakatan Harapan (PH) was in power, he said a consolidation exercise for the various IPAs was needed to reduce Putrajaya’s overheads and offer less confusion to foreign investors.
He called for only one IPA at the federal level and another for each state, adding that his preference for the former was the Malaysian Investment Development Authority (Mida), given its history and track record.
Lastly, Ong said, Malaysians needed to understand the benefits of FDI to Malaysia, such as how it would benefit the B40 community and boost government revenue through increased income tax payments.
“If the benefits are clear to the man on the street, it would make it harder for the various government agencies and non-Miti ministries to reject incentives for high-quality FDI applications,” he said.
In January, it was reported that FDI inflow into Malaysia dropped by 68% in 2020, a larger decline compared to regional neighbours like Singapore, Indonesia and Vietnam.