Global Players from Emerging Markets: Strengthening ... - Unctad

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82 Outward Foreign Direct Investment by Small and Medium-sized Enterprises from Malaysia Figure 1. Malaysia: Gross OFDI flows, by destination, 1999-2004 (Billions of Ringgit Malaysia) Others 13% Africa 13% IOFC 15% ANIEs 4% Source: Bank Negara Malaysia. Note: RM 3.80 = US $1. The total figure excludes RM5 billion to the Labuan Offshore Financial Centre in Malaysia. IOFC: International Offshore Financial Centres countries (figure 1). The international offshore financial centres (IOFC) accounted for 15 per cent of the total OFDI, suggesting the channelling of funds to tax haven locations for financial motives and other corporate reasons (e.g. holding company purpose, trans-shipped FDI). The geographical destinations of Malaysian investment abroad have diversified in this decade, compared to the 1980s and 1990s. However, most of the overseas investments still concentrated in Asia, particularly in the ASEAN countries. Singapore was the largest recipient of Malaysian investments followed by the United States in 1999-2004. More than a quarter of Malaysian FDI abroad went to ASEAN. The amount of Malaysian investment in ASEAN was as large as flows into developed countries. Malaysian OFDI to African countries started from a low base but grew rapidly in recent years. Malaysian companies have significant business interests in Ghana, Namibia, South Africa, the United Republic of Tanzania and Zimbabwe. Companies such as Petronas are present in Angola, Ethiopia, Nigeria, South Africa and Sudan; and Telecom Malaysia in Malawi. 55 Malaysian OFDI to China rose from $40 million in 1999 to $62 million in 2004, suggesting increased investment relationship and production linkages between the two countries. Sectoral distribution. There are two sets of data: investment by public enterprises and by all 55 See “Petronas: International operations» (http://www. petronas.com.my/internet/corp/centralrep2.nsf/frameset_ corp?OpenFrameset) and “About TM overseas investment” (http://www.tm.com.my/about_TM/oversea_invest/TMI.htm) ASEAN 28% Total 1999-2004 = RM 39.4 bn Developed countries 27% other firms, named “resident controlled”. Overall, Malaysian overseas investments concentrated in a few industries, especially in oil and gas for government linked companies, and in finance (mainly in commercial banking), utilities, construction and in plantation. • Public enterprises. A sizable amount of Malaysian OFDI in 1999-2004 came from non-financial public enterprises (NFPEs) or government linked companies (49 per cent). The bulk of the overseas investments by NFPEs were in oil and gas (figure 2). NFPEs OFDI in services declined from 34 in 1999 to 5.6 per cent in 2004. The significant overseas investment by Petronas contributed to the country’s oil and gas OFDI (box 1). Malaysian overseas investments in agriculture activities have grown from a 3.6 per cent share in 1999 to 8.6 per cent in 2004, mainly in plantation activities (e.g. rubber and palm oil) in neighbouring countries such as Indonesia. • Resident controlled enterprises. About two thirds of Resident Controlled Companies (RCCs) OFDI were in services in 1999-2004 (figure 3). RCCs services investments were mainly in finance, insurance, real estates and business services. Overseas investment by the Malayan Banking and Public Bank contributed to the dominance of the services investment. OFDI in utilities have also been growing rapidly as well as wholesale, retail trade, hotels and restaurants. Manufacturing OFDI has grown by
Source: Bank Negara Malaysia. Mfg 13% Oil & Gas 1% Oil & Gas 72% Figure 2. Gross OFDI flows, by NFPEs, 1999-2004 (Millions of Ringgit Malaysia and percentage) Figure 3. Gross OFDI flows, by resident-controlled enterprises, 1999-2004 (Millions of Ringgit Malaysia and percentage) Others 19% Manufacturing 0% Total 1999-2004= RM 21,849 million more than threefold but has not been as sizable as flows from the services industries. Malaysian manufacturing companies abroad are involved in a wide range of products and services. These range from the manufacture of plastic injection moulding, construction bricks, food, fibreboard, garment, apparel, plywood, flour, paints, electronic products and filter. In services they provide banking services, engineering services, software, restaurants, toll operator services, retailing and airport hotel services, including service apartment. Services 19% Services 67% CHAPTER VII 83 Source: Bank Negara Malaysia. Note: RM 3.80 = US $1. Data include Malaysian OFDI to Labuan Offshore Financial Centre. Abbreviations: WRHR: Wholesale and retail trade, hotels and restaurants; TSC: Transport, storage and communications; FIRB: Finance, insurance, real estate and business services. Others 9% Total 1999-2004= RM 22,573 million FIRB 51% TSC 2% FIRB 56% TSC 28% Utilities 20% WRHR 1% WRHR 16% Utilities 26% C. Drivers and motivations The motivations of Malaysian investment abroad can be categorized into the following areas: �� market-seeking (e.g. Opus International, �� Telekom Malaysia, Royal Selangor, CIMB, Top Glove, Road Builders, Malayan Banking, Hong Leong); resource-seeking (e.g. Petronas, Kumpulan Guthrie, Sime Darby, Melewar Industrial Group); and �� efficiency-seeking (e.g. Press Metal, Globetronics).
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United Nations Conference on Trade
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Preface The landscape of internatio
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