Strategic DDI can attract more FDI, drive economic growth – PM Anwar

KUALA LUMPUR: The government has set domestic direct investment (DDI) as a key performance indicator (KPI) for growing the country’s total investment given strategic DDI’s potential in attracting more foreign direct investment (FDI), Prime Minister Datuk Seri Anwar Ibrahim said.

The government, particularly via the Ministry of Investment, Trade and Industry (Miti), is committed to achieving a good balance between FDI and DDI for ensuring sustainable and balanced development throughout the country, he said in a statement issued after chairing the second National Investment Council (MPN) meeting today.

Besides the decision to make DDI as a KPI, the MPN meeting also, among others, discussed the best mechanism to streamline the country’s investment promotion agencies (IPAs) landscape by Jan 1, 2024, he said.

Hence the MPN has decided to reactivate the Investment Coordination Committee between Miti and all IPAs.

“Strategic DDI has the potential to attract more FDI because foreign investors usually consider DDI as a benchmark for domestic investors’ confidence and commitment towards government policies for strengthening the nation’s investment and business landscape,” he said.

Anwar, who is also Finance Minister, said that having a more strategic domestic industry ecosystem is crucial for generating more sustainable Gross Domestic Product growth.

It would also empower the domestic economy’s ecosystem in weathering global challenges such as climate change as well as various post-pandemic and geopolitical challenges that have led to supply chain disruption, rising raw material prices and high global inflation rate, he said.

Anwar said the government has implemented various initiatives to spur DDI growth, but it is of the view that efforts to increase DDI should be even more comprehensive.

In that regard, the MPN meeting also stressed one of the Madani Economy messages announced on July 27, 2023, which is the importance of the cooperation and strategic involvement of government-linked investment companies and goverrnment-linked companies to enhance DDI.

GLICs today manage investment assets worth more than RM1.7 trillion and play an important role not only to drive critical infrastructure development and enable the growth of various sectors in the new economy but also helping to attract foreign investors to Malaysia.

“The MPN acknowledges the interdependent and complementary relationship between DDI and FDI. FDI is important for accelerating economic growth while DDI is important for strengthening the national economy.

“Although studies have confirmed the benefits that FDI bring to the country, it is equally important to step up and further facilitate high-quality domestic investments in driving the national economy and expanding the industry chain structure, especially in the development of micro, small and medium enterprises,” he said.

For 2022, a total of 4,517 projects involving investments of RM267.7 billion were approved in the services, manufacturing and primary sectors, which are expected to create 140,440 job opportunities.

DDI contributed RM104.4 billion or 38.9 per cent of the total.

For the first quarter of 2023, the ratio was 52.5 per cent for FDI and 47.5 per cent for DDI, with committed investments totalling RM71.4 billion (a year-on-year growth of 59.7 per cent).

The increase in DDI percentage reflects higher confidence among local companies and businesses in the present government’s policies, Anwar said.

Today’s meeting was also attended by Miti Minister Tengku Datuk Seri Zafrul Abdul Aziz, Economy Minister Rafizi Ramli and Treasury secretary-general Datuk Johan Mahmood Merican.

Also present were corporate personalities such as Employees Provident Fund chief executive officer (CEO) Datuk Seri Amir Hamzah Azizan, Permodalan Nasional Bhd CEO Ahmad Zulqarnain Onn and Khazanah Nasional Bhd managing director Datuk Amirul Feisal Wan Zahir. – BK