Malaysia Remains An Attractive Investment Destination To Investors -- Analysts

By Mohd Khairi Idham Amran, Niam Seet Wei and Harizah Hanim Mohamed KUALA LUMPUR, Sept 29 (Bernama) -- Malaysia remains an attractive investment destination to investors despite having slipped to the 25th position in the Global Competitive Report 2016-2017 (GCR 2016-2017) from 18th last year, according to analysts. Chief Executive Officer of Institute for Democracy and Economic Affairs, Wan Saiful Wan Jan, said despite the fall in ranking, Malaysia was still among the best countries in the region within the GCR 2016-2017. "This country can be an even better investment destination if the Trans-Pacific Partnership Agreement is implemented and the free trade agreement with the European Union is realised," he told Bernama. However, he said, the fall in the competitive ranking should be given due attention by the government by identifying the cause. He pointed out that one the reasons could be investors' perception as well as that of economic observers over the political situation in the country. Apart from that, he said, the government should emphasise on the aspect of good corporate governance, legal issues and a consistent policy implementation to attract the interest of investors. Meanwhile, Sunway University Business School Economics Professor, Dr Yeah Kim Leng, shares the assertion by Ministry of International Trade and Industry (MITI) that political stability and strong economic fundamentals have helped maintain the country's attractiveness to foreign investors compared to many other developed nations. "The factors of wooing foreign investments remain intact. "These include the stable macroeconomic environment, attractive fiscal incentives, good quality infrastructures, and well-developed supporting facilities and services," he said in response to a statement by MITI Minister Mustapa Mohamed Tuesday. However, he pointed out that the government has to pay more attention to the operating environment. "This is because one country’s competitiveness is driven not just by the macro-environment factors but also by the what is happening on the ground where firms deal with day-to-day operating issues," Yeah explained. He said the GCR showed that Malaysia’s competitiveness has been eroded by the decline in efficiency, particularly in goods market, labour market, financial market development, especially health and primary education segment, in which the score fell significantly to 44th position from last year's 24th. "There appears to a broad-based decline in the efficiency enhancers," he said. Hence, Yeah suggested more efforts were needed to raise the overall economic efficiency and productivity and competitiveness. MIDF Amanah Investment Bank Bhd Research Department Chief Economist, Dr Kamaruddin Mohd Nor, said Malaysia could intensify its efforts to address areas that scored low in the ranking, such as health and primary education, as well as continue to focus on providing and promoting business efficiency as a whole. In short, focusing and improving the problematic areas of doing business will ultimately improve Malaysia competitiveness in the future, he said. According to the GCR 2016-2017, most executives noted that access to financing as their major concern in doing business in Malaysia. He said Malaysia's slip in the latest ranking in the GCR 2016-2017 highlighted areas which the government needed to address to improve the country's competitiveness. The overall score of 5.16 in GCR 2016-2017 is slightly lower than what the country has achieved previously in GCR 2015/2016 which saw Malaysia being positioned at 18th with the score of 5.23. "This indirectly implies that the world as a whole is getting more competitive. If we look at the overall score, Malaysia ranked in the top 20 per cent in all the 12 pillars of assessment. Malaysia ranked highly in various sub-indexes, among others, containing inflation (1st/138), investor's protection (4th/138), productivity(6th/138) and spending on research and development (8th/138). -- BERNAMA