PETALING JAYA: Malaysia recorded RM42.8bil approved investments in the first quarter of 2022 (1Q22) with domestic direct investments (DDI) accounting for 35%, amounting to RM15bil.
Last year, the country secured RM306.5bil in approved investments and nearly 32% was attributed to DDI.
“The amount of DDI received indicates a robust contribution to the overall investment performance,” said International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali during a luncheon address at the domestic investment seminar yesterday.
“Malaysia continues to retain the confidence of investors and stakeholders, while strengthening its reputation as a strategic profit centre for businesses in Asia.”
He also said Bank Negara projected the economy to expand between 5.3% and 6.3% in 2022.
The influx of DDI was mainly attributed to the participation of small and medium enterprises (SME) and small and medium industries (SMI).
“Most notably in the last two years, we have witnessed an increase in domestic investment with more participation of formidable SMEs and SMIs, and aspiring enterprises meeting the needs of multinational corporations (MNCs),” said Azmin.
However, the main challenges that SMEs and SMIs face are technological acquisition and the headwinds brought about by labour shortages.
In a bid to provide support for SMEs and SMIs so that they can leverage on the country’s robust investment environment, the Malaysian Investment Development Authority, in collaboration with MNCs, rolled out several initiatives.
These included vendor facilitation programmes, local sourcing and the domestic investment coordination programme (DCIP) last year.
“These platforms were introduced for the realisation of government incentives and to promote DDI.
“For example, the purpose of the DCIP was to bridge financial and technology gaps by establishing strategic collaborations and joint ventures among financial institutions, equity firms and technology providers,” said Azmin.
Although there has been a surge in eCommerce and digitalisation processes, the gap to digitalise and automate operations among SMEs is still apparent.
In view of this, Azmin noted that the government looks to strengthen technology acquisition support through the 12th Malaysia Plan and the National Investment Aspirations.
“Furthermore, the National Automotive Policy 2020 will provide a good opportunity for our local SMEs to ride on the value chain and further boost DDI,” said Azmin.
In a bid to resolve the labour shortages, the economic minister said Malaysia needs to boost the talent pool of skilled and high-tech workers.
“At the structural level, there is a fundamental need for our education system to produce the requisite talent that can be harnessed by the industry and make positive contributions towards the strengthening of the supply chain,” said Azmin.