Dr M defends Najib over FDI

By Asrul Hadi Abdullah Sani, The Malaysian Insider

KUALA LUMPUR, Aug 1 — Tun Dr Mahathir Mohamad today defended the Najib Administration over the plunging foreign direct investment (FDI) in the country last year.

Dr Mahathir echoed the explanation made by Prime Minister Datuk Seri Najib Razak that the slowdown in investments was due to external factors.

The former prime minister said that foreign investors currently do not have the funds to pour in the country.

“Today, most countries and foreign business people do not have the money to invest in their own country because their country has a lot of unemployment so we cannot expect much foreign direct investment today,” he told reporters after attending The Loaf Malaysian Premier Bakery 4th anniversary here.

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 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).

In May, Minister of International Trade and Industry Mustapa Mohamed announced that investments in the country for Q1 2010 amounted to RM5.2 billion.

FDIs made up RM3.2 billion of this total, with Singapore, Taiwan and Japan being the biggest contributors.

Mustapa said the investment amount was still relatively low against the total amount of RM32.6 billion in investments received last year.

Najib has been trying to lift Malaysia’s profile as a destination for foreign investment to help the country achieve an average GDP growth of at least 6 per cent per annum over the next five years.