Country Economic Work for Malaysia - Islamic Development Bank

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Figure 5.7: Net FDI as of % of GDP Regional Comparison period after the 1997 Asia Economic Crisis. Besides, Malaysia’s FDI inflow in 2009 was also lower than Singapore, Thailand, Indonesia, Vietnam, and the Philippines. This was the first time in the history where the FDI in Philippines was more than FDI in Malaysia. However, FDI increased to 3.6% of GDP in 2010 (Figures 5.7). 115. According to the Ministry of International Trade and Industry, Malaysia attracted MYR21.3 billion worth of FDI in first half of 2011, compared to MYR12.1 billion in first half of 2010. Approved foreign investments are primarily in the electrical and electronics industry; metal-based products; food processing; chemical and chemical products; transportation apparatus; petroleum products, including petrochemical; and fabricated metal products (Figure 5.8). The top investing countries are Japan (with MYR2.4 billion total FDI) followed Figure 5.8: Cumulative Net FDI Flows by Sectors 53
y the United States (MYR2.3 billion); Singapore (MYR1.9 billion); the Netherlands (MYR1.2 billion); and Taiwan (MYR1.2 billion). Binding Constraint to Attracting FDI 116. To attract more FDI inflows, Malaysia has had to implement more liberal economic policies similar to those implemented by Singapore and Indonesia. The UNCTAD report attributes the strong FDI inflows into the high performing Southeast Asian countries as being due to proactive policy efforts by the various Governments to attract FDI inflows. The release of the New Economic Model, the institutionalization of PEMANDU, the Economic Transformation Program and the Government Transformation Program together with the release of the Tenth Malaysia Plan have given positive signals to the foreign investors that the Government is committed to creating a more market friendly environment in Malaysia. iv. Conclusion 117. Based on the above analysis, Table 5.1 highlights a number of constraints hampering overall private sector development as well as PPPs, SMEs and private resource mobilization in Malaysia. Table 5.1. Summary of Constraints to Private Sector Development in Malaysia Components of Private Sector Development Constraints Private Sector Development Public Private Partnership (PPPs) Inadequately educated workforce, difficulties in dealing with tax administration and getting business licenses and permits Firms find it difficult to locate and recruit the skills they seek In terms of enrollment in secondary and tertiary education, the challenges remain even more substantial Weak innovation and business sophistication and low budget for research and development (R&D) activities Weak innovation system is hindering the private sector development in the country Land acquisition issues/disputes settlements take longertime to resolve, particularly for road projects Lack of project supervision and support Ensuring adequate resources Small and Medium Enterprises (SMEs) Private Sector Resource Mobilization Insufficient access to funding sources Weak access to markets Poor ability to absorb and retain good talent in the industry Insufficient availability of skilled workforce Shortage of Islamic instruments Lack of innovation Shortage of skilled and experienced professionals in Islamic finance industry 54
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Acknowledgements Appreciation for s
Page 7 and 8:
ISRA : International Shari’ah Res
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(v) Foreign Direct Investment……
Page 11 and 12: (2005)), key insights emerged in tw
Page 13 and 14: drain. Further, the Government need
Page 15 and 16: macroeconomic indicators are given
Page 17 and 18: SMEs are concentrated in the servic
Page 19 and 20: easy technology adoption, pro-busin
Page 21 and 22: Kelantan with the lowest per capita
Page 23 and 24: Figure 1.12. General Growth Diagnos
Page 25 and 26: that the Government’s Economic Tr
Page 27 and 28: (ii) Low Returns to Investments app
Page 29 and 30: Figure 1.22. Malaysia's Exports by
Page 31 and 32: 43. Malaysia’s private firms are
Page 33 and 34: over the medium-term. Several initi
Page 35 and 36: growth software compared to its maj
Page 37 and 38: esearchers and technicians in R&D p
Page 39 and 40: 59. Malaysia can further enhance it
Page 41 and 42: Annex Table 1.2. Malaysia: MDGs Ach
Page 43 and 44: 64. The Malaysian experience has al
Page 45 and 46: economic growth. The ETP is expecte
Page 47 and 48: 77. According to the Global Competi
Page 49 and 50: development of infrastructure throu
Page 51 and 52: a. Northern Corridor Economic Regio
Page 53 and 54: The challenge is for financial inst
Page 55 and 56: Original Equipment Manufacturing (O
Page 57 and 58: Intensify formalisation to promote
Page 59 and 60: Sukuk market has experienced unprec
Page 61: For innovation to become an importa
Page 65 and 66: (vi) (vii) Sharing Eexperience and
Page 67 and 68: institutions as well as Islamic pro
Page 69 and 70: Liberal Foreign Exchange Administra
Page 71 and 72: Issues/Challenges Facing the Islami
Page 73 and 74: Funding from Government of Malaysia
Page 75 and 76: programmes in the country. Initiati
Page 77 and 78: labeling and branding of Halal prod
Page 79 and 80: to over 200 industrial estates or p
Page 81 and 82: member countries can be provided te
Page 83 and 84: Figure 6.5: MATRADE Business Strate
Page 85 and 86: offered by the 35 MTCP training ins
Page 87 and 88: case of the economies in transition
Page 89 and 90: Key Challenges Facing the MTCP
Page 91: iii. Conclusion 185. Above diagnost
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Country Economic Work for Malaysia - Islamic Development Bank

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