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Foreign investment sets new Malaysian record

Foreign investment in Malaysia's manufacturing and services sectors soared 69 percent to a record 44.2 billion ringgit (US$13.7 billion) last year, but that growth rate may be untenable amid global economic uncertainties, Trade Minister Rafidah Aziz said yesterday.

The ministry approved 33.4 billion ringgit in foreign manufacturing investment last year, up 65 percent from 2006, Rafidah said.

At the same time, approved foreign investments in services surged 80 percent year-on-year to 10.8 billion ringgit last year, she said. This was the first time the ministry released investment figures for services, reflecting the sectors' growing importance as a key growth contributor.

Overall, Rafidah said total approved investments in the manufacturing sector rose 30 percent to a record 59.9 billion ringgit last year, more than double the government's target of 27.5 billion ringgit a year.

This was largely due to 11 high-spending projects worth more than 1 billion ringgit each, mainly in the electronics and electrical, petrochemicals, metal, paper and printing industries, she said.

But such high investment levels may not be sustainable given volatile global oil prices and uncertainties in the US economy, she warned.

"In 2008, intense competition for foreign direct investments will continue as many countries are further fine-tuning their investment policies and strategy," she told a news conference.

"We will continue to seek out these capital intensive investments. Probably we will not maintain the 59 billion ringgit but we will maintain at a high level. We will work extra hard for this year and beyond," she said.
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