DDI is the best way to get more FDI

Malaysian Prime Minister Anwar Ibrahim has emphasised that a robust environment for domestic direct investments (DDI) can play a pivotal role in attracting greater foreign direct investments (FDI). According to Anwar, foreign investors often perceive DDI as an indicator of domestic investors’ confidence and dedication to government policies aimed at fortifying the nation’s investment and business landscape. This sentiment was expressed in a statement reported by Bernama.

Anwar highlighted that the government has prioritised DDI as a key performance metric in the pursuit of elevating the country’s overall investment landscape. The Ministry of Investment, Trade, and Industry is actively striving to strike a harmonious balance between FDI and DDI, fostering sustainable and well-rounded development across the country.

Recognising the importance of DDI, Anwar asserted that more comprehensive measures must be undertaken to stimulate DDI growth. Notably, in 2022, a total of 4,517 projects in the services, manufacturing, and primary sectors were approved, with investments amounting to RM267.7 billion. These projects were projected to generate 140,440 jobs, with DDI contributing RM104.4 billion, constituting 38.9% of the total investments.

In the initial quarter of 2023, the FDI-to-DDI ratio stood at 52.5% for FDI and 47.5% for DDI, with committed investments reaching RM71.4 billion, indicating a year-on-year surge of 59.7%.

Discussing the National Investment Council (MPN) meeting, Anwar shared that it deliberated on the optimal approach to streamline the country’s investment promotion agencies. To enhance coordination, the decision was made to revive the investment coordination committee involving the ministry and these agencies.

Anwar, who also holds the position of finance minister, emphasised that nurturing a strategic domestic industry ecosystem is critical for fostering sustainable growth in the gross domestic product (GDP). Such a move would empower the domestic economy to better navigate global challenges like climate change, post-pandemic recovery, and geopolitical uncertainties. These challenges have contributed to supply chain disruptions, escalated raw material costs, and heightened global inflation rates.