The Ministry of International Trade and Industry (Miti) stated today that foreign direct investment (FDI) for first quarter of 2010 has nearly matched the full year of 2009.

"But this is not enough. As the prime minister has stated, we still have to continue with reforms to make Malaysia more attractive to investors and to help us achieve the goals set out in the 10 th Malaysia Plan and under Vision 2020," said its minister Mustapa Mohamed.

In a statement today, Mustapa said the government had already taken initiatives to cope the issue, and to date, Malaysia has already seen an increase in FDI over the first quarter this year.

FDI inflows totalled RM5.06 billion for the January to March 2010 period, compared with RM5.66 billion for all of 2009, he said.

Last week, the United Nations Conference on Trade and Development (UNCTAD) in its World Investment Report 2010 said that Malaysia's FDI fell by 81 percent last year, trailing behind countries like the Philippines, Vietnam, Thailand, Indonesia and Singapore.

While acknowledging the dampening FDI inflows into Malaysia, Mustapa said it should be highlighted that Malaysia was also named in the same report as one of the top 15 host countries for FDI for 2010-2012 by a survey of transnational corporations.

He said the government had introduced several key initiatives, such as economic liberalisation, the Government Transformation Programme, New Economic Model and 10th Malaysia Plan to spur the economy.

Wide-ranging reforms

Having seen the early signs of the decline, the government instituted wide-ranging reforms as early as April 2009, Mustapa said.

"These efforts will achieve results over time. Malaysia has already seen an increase in FDI over the first quarter of 2010," he said.

Malaysia is also optimistic of wooing RM115 billion private investment by 2015 in line with the target set under the 10th Malaysia Plan, said Mustapa.

He said the Government Transformation Plan would create a conducive environment for investment flow.

"RM115 billion investment represents foreign direct investment and Malaysia's investments overseas. The six per cent gross domestic product growth forecast this year is achievable," he said.

Mustapa also said there was potential investments from South Korea particularly in the property sector.

To date, investments from South Korea totalled US$3 billion, he said.

Mustapa said there are indications that South Korean companies are keen to increase their investments in Malaysia.

"We should exploit this potential with South Korea's aggressive investment overseas," he said.

The latest investment from South Korea is the acquisition of Malaysia's largest petrochemical producer, Titan Chemicals Corp Bhd, by Honam Petrochemical Corp.

Another investment by South Korea is the plan to set up a solar cell manufacturing plant at the Senai Hi-Tech Park in Johor by STX Corp.

Mustapa said interest in Malaysia's property sector among South Koreans was also promising as they see Malaysia as an ideal place to live due to good quality of life and safe environment.

Database to be enhanced

Meanwhile, at the business councils meeting with the International Trade and Industry Ministry today, Mustapa said strategic partnership promotion and ways to boost trade and investment took centrestage.

Among the business councils which attended the meeting are the Malaysian-French Chamber of Commerce and Industry, Malaysian-Swedish Business Association, Malaysia-Norway Business Council, Malaysia-Italy Chamber of Commerce and Industry, and Malaysia-Dutch Business Council.

The East Asia Business Council and Malaysia-Japan Economic Association also attended the meeting.

Mustapa also said there was a need to enhance the ministry's database system to provide comprehensive information on foreign investors and trade.

"We discussed ways to share information and to complement the information with the foreign countries," he said.

He said the currrent database system focused on information gathered from the Malaysia Investment Development Authority (MIDA), mainly on companies that have received incentives from MIDA.

"Some companies which don't have large investments are not captured," he added.

- Bernama