The New Investment Policy (NIP) takes a comprehensive approach to catalyse high-quality investments to deliver forward-looking and equitable growth for the nation.
“It offers a clear vision founded on strategic outcomes at both national and sectoral levels, anchored against the critical national priorities of Malaysia’s National Investment Aspirations (NIA),” Senior Minister and International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said today (Oct 6).
The NIP is targeted at implementation of key changes to strengthen national foundations, develop existing high-value ecosystems and unlock emerging areas of growth for the shared socio-economic benefit of businesses and communities alike.
Launching the NIP today, Azmin said: “The forward-looking NIP centres around Environmental, Social, and Governance (ESG), in line with the nation’s commitment for carbon-neutrality by 2050 at the earliest.
He explained: “Small and Medium-sized Enterprises (SMEs) must adapt to digitalisation and to ESG measures as it offers them greater opportunities to obtain financing especially ‘green’ financing not to mention greater market benefits.
Malaysia recognises the importance of ESG and the NIP has incorporated its latest measures to define new priorities in strategic sectors such as manufacturing, high-tech, services and the energy and power sectors.
He said the NIP comes with clear targets to ensure positive results are delivered and aligned with overarching national priorities, these are:
– Sustained economic growth of 4.5 – 5% GDP growth per annum;
– Sustained national wealth growth of 5.5 – 6.5% GNI per capita growth per annum; and
– Re-invigorating Investment ecosystem 4.0 – 5.0% Private sector gross fixed capital formation per annum
While the National Investment Aspiration Targets involve:
– Increased economic complexity – Regional R & D and Innovation Hub Top 25 on Global Innovation Index (33rd in 2020); Sophisticated exports with high economic value add – Top 20 on Economic Complexity Index (24th in 2020)
– Create high value job opportunities – Knowledge intensive and highly skilled jobs – 35% knowledge-intensive employment (29% in 2020)
– Extend domestic linkages – Enhanced Global Value Chains integration ~RM30Bn avg. annual DIA6 (23Bn for 2016-2020)
– Deepened local supply chain integration~60%domestic contribution to Mfg. Value-added (55% in 2015)
– Intentionally competitive SMEs~25% of total exports from SMEs (18% in ’19)
– Develop new & existing economic clusters – Expanded existing Clusters; Growth of export value in top 10 groups (3 digit MSIC codes) – Accelerated growth of new clusters
– Improve Inclusivity – Balanced economic development across states – >0.5 ratio of total investment (FDI & DDI) to %GDP contribution across all states1; Average growth of export value in top 40 new product classes
– Enhance ESG practices – De- risked economy against ESG factors – Top 40 on Sustainalytics ESG factors ranking (46th in 2021); High compliance and quality ESG reporting and >95% PLC Avg. Compliance3 (93% in 2020); >75% PLC Avg. Quality4 (63% in 2020)
Azmin added to achieve this there are six strategic thrusts to drive the National Investment Aspirations, these are:
Unified Investment strategy to laser focused delivery on NIA and ESG;
Agile and forward-looking incentive packages that meet needs of investors;
IPA landscape with clear roles and responsibilities for A simplified investor journey;
Accelerated innovation ecosystem to nurture high quality investments;
Vibrant talent pool that meets needs of labour market; and
Streamlined business environment for improved ease of doing business.
The Minister added the Government has established strong investment channels and cooperation in the areas of diplomatic, trade and investment relations with Regional Comprehensive Economic Partnership (RCEP) members, as well as with the recent ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which allows local businesses tap into international resources and the global supply chain.