Manufacturing investment rebounded in 2003 to jump 62 percent to its highest level in three years, with the upturn expected to be maintained this year on the back of strong economic growth, Trade Minister Rafidah Aziz said today.

Despite a gloomy backdrop last year following the Iraq war, terrorism and the Sars outbreak in the region, Rafidah said the government approved 965 projects with investments totalling RM29.10 billion, up from 792 projects worth RM17.90 billion approved in 2002.

The figure exceeded the government's annual investment target of RM25 billion under a 10-year industrial plan until 2005, with total investments approved during the 1996-2003 period now amounting to RM210.40 billion, she said.

Approved foreign investment in 2003 rose 35 percent to RM15.60 billion or 54 percent of the total, while domestic investment more than doubled to RM13.5 billion, she said.

Foreign investment in new projects rose to RM11.2 billion from RM6.9 billion in 2002.

Attractive destination

Although there is intense competition from China and other regional countries, Rafidah said manufacturing investment rebounded after a two-year slump because Malaysia was still viewed as an attractive destination due to its economic and political stability.

"When they take a long-term view of their investment, they believe it is still worthwhile to put more money in Malaysia. For new investors looking for locations for their projects, they find Malaysia is still a better bet," she told a news conference.

"It's not just one factor of labour cost or the net cost. It's a total package, the overall environment, support and infrastructure that we offer. All told, they can make money in Malaysia and that's the bottomline," she said.

"Foreign investors are looking at Malaysia in a very positive light regardless of competition from China and with our own aggresive efforts to reach out to them, this will indeed be a very good year like 2003."

Rafidah said the ringgit, fixed at 3.80 to the dollar since 1998, was not a problem to manufacturers because most of them had factored in exchange rate fluctuations in their costing.

"So far no complaints. So far they are telling us let it be. Let the currency pegged at this present rate stay," she said. - AFP