MAIN GROWTH SECTORS: The government has earmarked 12 national key economic areas among others, namely, financial services, oil, gas and energy, education, tourism, wholesale and retail, electronics and electrical, healthcare and palm oil.
KUALA LUMPUR: The government’s policy to encourage more domestic direct investment (DDI) is timely as it can be a buffer for generating economic growth, especially in times of global economic uncertainties.
Malaysian Investment Development Authority’s chairman, Tan Sri Sulaiman Mahbob, said currently, the DDI ratio versus the foreign direct investment (FDI) was 40 per cent and 60 per cent respectively and the government aimed to balance it.
“We got to nurture domestic investors beyond just construction, plantation and small and medium industries and move towards services and manufacturing,” he said.
He said this to reporters after the launch of the book, ‘Musings of a Financial Economist’, a collection of articles on key economic issues by Malaysian Rating Corp Bhd’s chief economist, Nor Zahidi Alias, here yesterday.
Hence, local entreprenuers should look into revamping their business models and take advantage of the incentives provided for key areas that the government was focusing such as services under the Economic Transformation Programme (ETP).
The government had earmarked 12 national key economic areas among others, namely, financial services, oil, gas and energy, education, tourism, wholesale and retail, electronics and electrical, healthcare and palm oil.
Echoing Sulaiman, Nor Zahidi also felt that the government was pushing for DDI under the ETP to safeguard the country’s interest in investment flow.
“If anything happens (global economic downturn) that will effect FDI, we will at least have the DDI to support the country’s economy,” he said.
However, he cautioned that there were possibilities of DDI being affected in case of a double deep in US due to Malaysia’s exposure to the market.
“We are keeping an eye on August 2 (the deadline for the US to increase its debt ceiling).
My personal opinion is that it will increase the debt ceiling simply because it can’t afford to have another 1937 incident,” he said.
The American economy experienced recession in 1937-38.
During global recessions, it was highly likely for even the DDI to decline as companies would take a cautious stance during such situation, he warned.
On the positive note, he said, despite the prevailing uncertainties, especially in the US and Europe,
Malaysian consumption level was still good.
“The good thing is that our consumption is still high and our monetary policy is still accommodative to spur private consumption, which will in turn boost the country’s economy,” he said. — Bernama