Nazir cautions against bashing low FDI figures

By Yow Hong Chieh, The Malaysian Insider

KUALA LUMPUR, July 26 — Top banker Datuk Seri Nazir Razak today cautioned that the 2009 plunge in Malaysia’s foreign direct investment (FDI) needed to be studied carefully before jumping to conclusions.

A United Nations report showed that the once-roaring Asian Tiger’s FDI plunged 81 per cent last year, going below even the Philippines — long considered South East Asia’s basket case economy.

“It doesn’t mean that the net investment flow is lower, is necessarily bad,” the CIMB Group managing director and chief executive told reporters here.

“Look at the quality of the investments and look at the facts in terms of the timing of investments.

“It could be some delays. It could be a big, lumpy Malaysian investment overseas that distorts the net number,” added Nazir, who is also the younger brother to Prime Minister Datuk Seri Najib Razak.

He said cited CIMB and Maybank’s “huge” investments into Indonesia as possible factors that contributed to lower FDI figures so far this year.

“Is that a bad thing? It’s a good thing because, in the long term, it is beneficial for Malaysia that Maybank invests and earns return from Indonesia,” he said.

“So I don’t think we should be jumping and getting overexcited about this investment data that’s come out.”

Najib has come under fire from opposition parties for Malaysia’s lacklustre FDI rates, which have fallen faster than regional counterparts such as Singapore and China even while capital outflows dampened private domestic investment.

The World Foreign Investment Report (WIR) 2010 released by the United Nations showed that FDI in Malaysia plunged 81 per cent last year, trailing behind countries like the Philippines, Vietnam, Thailand, Indonesia and Singapore.

The report revealed that Malaysia suffered a large 81.1 per cent drop in FDIs compared to far healthier figures in Thailand (30.4 per cent), Vietnam (44.1 per cent) and Indonesia (44.7 per cent).