KUALA LUMPUR: The Centre for Market Education (CME) has backed former second finance minister Datuk Seri Johari Abdul Ghani’s proposal for the setting up of a special committee under the International Trade and Industry Ministry to monitor investments in Malaysia.
CME chief executive officer Carmelo Ferlito said 2021 had shown a positive trend of foreign direct investment (FDI) in the country.
The net FDI inflow, as a percentage of gross domestic product (GDP), stood at five per cent in 2021, after four years in which the value was constantly below three per cent.
“It is time to work on this positive signal to rebuild the investment hub vocation of Malaysia,” said Ferlito.
CME said there was a few main phenomena to be monitored and properly communicated including the difference between memorandum of understanding (MoUs), approved foreign direct investments (FDIs) and actual (implemented) FDIs.
The transformation process from MoUs to approved FDIs and then to implemented FDIs as well as the eventual reasons behind non-materialised FDIs should also be monitored, it said.
FDI net inflows are the value of inward direct investment made by non-resident investors in the reporting economy, including reinvested earnings and intra-company loans, net of repatriation of capital and repayment of loans.
In order to both strengthen Malaysia’s ability to attract FDIs and develop a proper communication strategy, CME proposed that the ministry creates a FDI monitoring committee, joined by international chambers of commerce and Malaysian industry representatives.
CME said the tasks of the committee should be understanding the reasons, which are eventually blocking investors to enter the country, by listening to international and domestic industry players.
The committee should also review the reasons why approved investments do not turn into implemented investments, communicating simultaneous data about approved and implemented FDIs and drafting proposals to strengthen Malaysia’s investment attractiveness.
CME said among the most important issues surrounding investment attractiveness, two in particular need to be stressed were labour and banking regulations.
Too many limitations were impeding the emergence of a vibrant labour market both at talent and low-skilled workers’ level, it added.
Restrictive banking rules are making it impossible or extremely long for big corporations with a complex structure to obtain the opening of a bank account, with the rising risk of appointment of fake directors and shareholders and therefore deteriorating the legal framework surrounding investments in Malaysia.
“A regular revision of the investments, to understand what is right and what is wrong, and a constant dialogue with industry players, are key elements for revitalising Malaysia’s vocation to international trade and investments”, added Ferlito.
Johari, who is the Titiwangsa MP, said on Wednesday that it was important to monitor the implementation of MoUs entered by Malaysian companies with foreign entities.
Source : NST