Miti Minister Mustapa Mohamed tries to justify the over 80% FDI dip in 2009 by saying that this is mostly because Malaysia is at a different development stage from its neighbours.
The United Nation Conference on Trade and Development's World Investment Report released last Friday showed that Malaysia performed poorly last year, trailing behind countries like the Philippines, Thailand and Indonesia in attracting foreign investment.
Malaysia's severe FDI contraction was even larger compared to the dip of 37 percent in global FDI flows due to the global crisis.
"The other (Southeast Asian) countries attract infrastructure investments like for roads and power supply.
"Malaysia has excess power supply, so we are investing in these areas instead," International Trade and Industry Minister Mustapa Mohamed (right) told reporters after an industry dialogue today.
He also said that it was more a case of quality over quantity, as the country is attracting better-value investments.
"We are attracting quality investments which generate benefits. There is a company which invested only RM200 million but created 1,500 jobs for our graduates," he said.
Being at a different level of the development scale also makes us uncompetitive in attracting investments in certain sectors.
"We cannot compete on textiles, apparel, low-end furniture production and other labour-intensive low-end manufacturing areas," he said.
Mustapa's explanation is very interesting. He argues that Malaysia is at a different development stage compared to other Asean countries which made it difficult to attract low end investments. This may be true but it also means that the country's economy structure is so narrow that we have not been able to attract high end investments compared to our southern neighbour.
Mustapa should enlighten us on this new development level we have reached and what the opportunities available to investors. Interestingly, we are still investing in infrastruture too. Recently, the government has earmarked a new LRT project amounting to almost RM40 billion in investment.
Ironically, Singapore being the most developed country in Asean was able to attract USD16 billion in 2009. Singapore is home/work base to mostly 300k knowledge workers from Malaysia.
If Malaysia is attracting higher end investments, where are the high level jobs?
Miti needs to be more specific with its justification.
Moreover, this is not the time for justification but solution. We need a solution and this government should stop being in denial.