Malaysia needs more investment from local private sector
Malaysia wants its private companies to invest more in building the economy. At around 10% of GDP, current levels are some of the lowest in Asia and over 50% of investment comes via the government.
Naturally, the government would like to change this. Its Performance Delivery & Management Unit says it has identified 131 projects requiring US$444 billion investment. Idris Jala, the Unit’s manager, says they will release a plan this week for 60% of that amount should come from the domestic private sector, 32% from government-linked companies (GLCs) and 8% from the state. Seven investments worth $37 billion were “ready to go” with named investors.
Possible investments were chosen because they made commercial sense, said Idris, and cover industries like oil and gas, finance (especially Islamic finance) electronics and palm oil, as well as an underground transit system for Kuala Lumpur.
The government has not specified yet what taxation or regulatory changes it will make to change investors’ behavior. Other government initiatives to open the economy have met resistance or been watered down, foreign direct investment in Malaysia is now 5% of Southeast Asia’s total (it was 39.8% in 1992) and recently, large Malaysian private companies have begun to look to faster-growing economies to invest their money.
article & source: Reuters via Yahoo!
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