KUALA LUMPUR (March 2): Amid challenging global economic environment due to the Covid-19 pandemic, Malaysia recorded a total of RM164 billion in approved investments through 4,599 projects in the manufacturing, services and primary sectors in 2020, according to the International Trade and Industry Ministry (MITI).
“These investments are expected to create 114,673 new jobs in various sectors of the economy once implemented,” said Senior Minister cum International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali in a statement today.
In contrast, a total of 5,287 projects with investments of RM211.4 billion were approved in 2019.
This decline was weighed by the services and primary sectors, which were directly impacted by declines in global demands due to the pandemic and the implementation of the Movement Control Order (MCO), said MITI.
Of the total investments approved, domestic direct investments (DDI) accounted for the bulk of the total approved investments with a contribution of 60.9% (RM99.8 billion), while foreign direct investments (FDI) made up the remaining 39.1% or RM64.2 billion in 2020.
MITI said the manufacturing sector led the way for total investments approved in 2020, recording RM91.3 billion, followed by the services sector (RM66.7 billion) and the primary sector (RM6 billion).
“People’s Republic of China (RM18.1 billion), Singapore (RM10.0 billion) and the Netherlands (RM7.0 billion) were the top three FDI sources from overall economic sectors in Malaysia, accounting for more than half (54.8%) of the total approved FDI for the year,” said MITI.
On approved investments by states, MITI said Selangor recorded the highest investments approved last year at RM38.7 billion, followed by Sabah (RM21.0 billion), Sarawak (RM19.6 billion), Kuala Lumpur (RM17.1 billion) and Pulau Pinang (RM16.0 billion).
It said these five states alone contributed more than 60% of the total approved investments for 2020.
“The government, through MIDA [Malaysian Investment Development Authority], continued to be at the forefront to entice more high-value investments in the areas of technology and innovation to position Malaysia as an alternative supply chain hub in Asia.
"Investors will undeniably derive value by [tapping] on Malaysia’s well-established local supporting industry network and talented workforce to undertake high-tech products manufacturing and high value-added services to serve their clients in the region, in the present and the future,” said Azmin Ali.
In the manufacturing sector, the number of projects approved also increased by 6.2% to 1,049 from 998 in 2019.
“FDI accounted for 62% (RM56.6 billion) of total approved investments in the manufacturing sector, while domestic investments constituted the remaining 38% (RM34.7 billion). It is important to note that despite the challenging times, DDI surged by 22.6% while FDI increased by 3.9% compared to 2019.
“In terms of top-performing industries in 2020, the electrical and electronics (RM15.6 billion), petroleum products including petrochemicals (RM15.5 billion), basic metal products (RM14.4 billion), paper, printing and publishing (RM7.8 billion), machinery and equipment (RM7.1 billion), chemicals and chemical products (RM6.3 billion), rubber products (RM4.3 billion) as well as transport technology (RM3.9 billion) contributed nearly 90% of the total approved investments in the manufacturing sector last year,” said MITI.
As for the services sector, Malaysia’s proposition as a hub for business and investment for the sector attracted a total of RM66.7 billion in approved investments through 3,527 approved projects, accounting for 40.7% of the total approved investments in the economy.
“DDI dominated the total approved investments in the services sector, contributing RM60.2 billion (90.3%), [whereas] FDI represented the remaining RM6.5 billion.
“The majority of the main services subsectors showed a significant decline in approved investments except for MSC status projects and other services such as BioNexus status and software developments. The top five contributors of approved investments in the services sector were real estate (RM31.2 billion), utilities (RM10.8 billion), support services (RM5.2 billion), telecommunications (RM5.2 billion) and MSC status projects (RM3.9 billion),” said MITI.
Furthermore, MITI said the primary sector registered approved investments of RM6 billion in 2020, compared to RM7 billion in 2019.
“The mining subsector led the bulk of investments in the primary sector, contributing 99.5% of total investments approved in the sector. The rest of the primary sector investments comprise the plantation and commodities subsector and the agriculture subsector, which registered investments of RM27 million and RM2.4 million, respectively,” it added.