MALAYSIA is a country that is moving fast. From a nation that was dependent on agriculture and primary commodities, it has today become an export-driven economy led by high technology, knowledge-based and capital-intensive industries.
Since the 1970s, Malaysia has attracted foreign direct investment from various multinationals and foreign companies. By the 1990s, Malaysia achieved newly-industrialised country status, with 30 per cent of exports consisting of manufacturing.
These companies have brought with them a myriad of expertise, talent and exposure to the Malaysian people. Aside from that it created a melting pot of culture – not only intrinsically from its own cultural mix, but moulding in foreign culture.
These companies have evolved from manufacturing, when they first arrived in Malaysia, to becoming a centre for services such as research and development to financial services and talent management among others.
Malaysia is an ideal investment destination – it has a great location, robust economy and business-friendly policies.
This is evident with Malaysia’s foreign direct investment (FDI) inflows in 2011 surging by 12.3 per cent to US$10.8 billion (RM32.94 billion) as multinational companies continue to choose Malaysia as their regional investment destination.
William Dillard famously quoted stating any business could be successful, as long as it was located in the right place.
Malaysia certainly has this location. It is located at the centre of Asia, right between the smallest and biggest markets – spanning Thailand to China and India.
It is a six to eight hours flight radius from Asia’s booming growth centres such as Bangalore, Dubai, Hong Kong, Seoul, Shanghai, Taipei and Tokyo. Apart from its strategic location, Malaysia is famed for having a robust and open economy.
According to the International Chamber of Commerce Open Market Index 2011, Malaysia is the third most open economy in Asia, after Hong Kong and Singapore.
Malaysia has continued to show strong trade performance despite the slow US economic recovery and eurozone debt uncertainties.
Allowing it to continue on its growth path is its well established trade relationship within Asia – providing inroads to Southeast Asia economies and its market of over 600 million people.
Malaysia’s attraction does not stop here, it has introduced more business-friendly policies that heighten its star capabilities.
In 2010, Malaysia embarked on its continued vision of becoming a high income nation by 2020.
To do this, it has positioned the Economic Transformation Programme (ETP) as a key pillar to driving change. Through this, the government is proactively encouraging private investment-led growth with the ETP creating many investment opportunities.
One of the ETP top priorities is to facilitate global companies’ efforts to make Malaysia their base. Key areas include oil, gas and energy, tourism, health services and others.
The government is also looking into enablers to achieve competitiveness such as the government’s facilitative role in business; public finance reform, human capital development, international standards and liberalisation, public service delivery and narrowing disparities. Recently, the country announced liberalisation of the financial and medical sectors among others.
Further to the country’s performance based on fact and figure, there are many examples of companies that have made Malaysia their home and connection to the region.
As of 2011, a total of 217 operational headquarters were approved, to be located in Malaysia, with investments worth US$758 million.
Among them are Hewlett-Packard Co that opened its HP Global Centre in Cyberjaya in 2010, carmaker Volvo recently chose to operate out of Malaysia and consolidated its Asean operations to a single location here. General Electric also combined its operations in Malaysia recently. Its oil & gas operations in Malaysia serve its customers in Asia Pacific region.
Malaysia has definitely proved the pudding in terms of its attractiveness as a magnet for foreign investment – from having a robust economy, strategic location and business-friendly policies. Not only does it have the factors, but it has successful examples of multinationals calling it home within the region.
Through policies such as the ETP, Malaysia hopes to sustain this momentum and encourage more such investments into the country.
Moving forward, the investment climate in 2013 is expected to be challenging due to the current global economic slowdown.
However, Malaysia continues to focus on its target of attracting US$10 billion FDI this year.
In spite of the global economic outlook, the country plans to take advantage of the slowdown .
In particular, Malaysia will continue to leverage on its poised economic environment and sound policies in place to attract investors.
Like the saying goes, when life gives you lemons (in this case – a strategic location, a robust economy and business-friendly policies), you make lemonade.
Especially when Malaysia’s transformation opens up opportunities with enhanced financial incentives and business-friendly policies.
Picture by: livingmalaysiabillboard