Tengku Zafrul said that productivity could be improved by the public and private sectors prioritising employees’ wellbeing and supporting a decent standard of living for them.
KUALA LUMPUR: The Ministry of Investment, Trade and Industry (MITI) is optimistic that 2024 will be a stronger year for foreign direct investments (FDIs) into Malaysia, leveraging what is seen in the pipeline.
Its Minister, Tengku Datuk Seri Zafrul Abdul Aziz said that as of the first six months of this year, Malaysia registered a total of RM132.6 billion investment, around 60 per cent of the nation’s investment target for this year, which is slightly above the target.
"The good news is that nearly half of it is actually domestic direct investment (DDI) and the balance is foreign direct investment (FDI). We hope that this momentum can continue,” he told reporters after the roundtable discussion on the New Industrial Master Plan 2030 (NIMP 2030), organised by MIDF today.
He said it is important to stress on DDI as there is positive correlation between FDI and DDI.
"The increases in FDI obviously positively correlate with increasing DDI because there will be spillovers.
"Looking closely at why we need to attract FDI, there are three main reasons and one of that is it creates jobs. So there will be important spillovers. Secondly, we want to ensure that it creates spillovers to our industries, whether it be the construction sector or the supply side.
"And the final one is also to ensure that we increase economic complexity as an exporting nation. Our trade to Gross Domestic Product last year was at 160 per cent,” he shared.
Tengku Zafrul said that in Budget 2024, RM200 million had been allocated for NIMP 2030 initiatives which cover various key sectors with the focus on four key missions.
One of the key missions is to advance economic complexity and among the focus will be to expand to high value-added activities of the value chain and to develop entire ecosystem to support the high value added activities.
"We need to build strong local small and medium enterprises (SMEs) in manufacturing and related services to support the industry champions as well as to integrate value chains.
"So, for industries that are moving up the value chain, they would require support. They qualify for this kind of investment from the RM200 million budget allocation. But this is from the government’s side. There is also support from the private side, especially from both financial institutions and the capital market,” he noted.
Meanwhile, asked on the government’s decision to increase the sales and service tax (SST) from six per cent to eight per cent announced during the tabling of Budget 2024, he said it will not have much impact on industries but there is still the need to monitor on what transpires from the decision.
"Industries need to understand the needs of the government. As policymakers we would have looked at the pros and cons to strike the right balance.
"We have fiscal responsibilities, and are also accountable to parliament and to the people to achieve sustainable growth in the economy and be inclusive to all.
"So for industries, any form of fiscal policy tax will also be something that the companies will have to incorporate as part of the business plan going forward,” he added. - Bernama
