The Malaysian Investment Development Authority (MIDA) is committed to inspiring foreign and local investors with positive news about Malaysia, its value propositions including its people.
The agency stands to address and assist entrepreneurs, with a keen focus of Malaysian SMEs, resolve challenges faced in terms of obtaining capital, business matching and create sustainable economic growth which are the fundamental building blocks of any business.
In a nutshell, MIDA’s main focus is to strive to create an enabling environment for companies looking to do business in Malaysia by providing them with all the necessary information and services to make informed investment decisions and to succeed.
“MIDA is the principal government agency which promotes the country’s economic development and is tasked with attracting both Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI). We must understand that FDI is only one part of the equation, and a strong domestic industry and ecosystem are also important. Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI) complement one another. They arise from the same market conditions: a competitive, equitable, stable business and regulatory climate. Strong domestic demand results in more DDI and a healthy DDI is essential for successful FDI.”
“In the last few years, MIDA has embraced a new journey. We wish to create a network of innovators who will improve and advance our beloved nation. We have been working tirelessly to encourage the growth of DDI. MIDA believes in empowering and valuing people, hence we aspire to invest our efforts in local companies to enable them to perform at their highest potential. We take pride in our service and successes and, more importantly, in your achievements and accomplishments,” said MIDA CEO Datuk Wira Arham Abdul Rahman today (Nov 8).
For Malaysia to become an economic powerhouse like China or Japan, it needs a healthy balance of FDI and DDI, said Arham at the 3rd Journalist Programme which featured an expert panel discussion entitled “Shifting the Paradigm: Enhancing Domestic Direct Investment (DDI) For Sustainable Economic Growth” held at MIDA’s Headquarters.
The session aimed to highlight the importance of DDI in contributing towards the country’s economic growth and to dispel the widespread misconception that the Government prioritises promotion to attract Foreign Direct Investment (FDI). In reality, the Government places equal importance on attracting both FDI and DDI.
Arham emphasised that for the past 10 years (2012-2021), DDI contributed 64.2 per cent or RM1,364.6 billion in all sectors of the economy while FDI sources accounted for 35.8 per cent or RM761.7 billion in absolute terms. The services sector saw the highest level of approved investments (RM1.2 trillion), followed by manufacturing sector (RM818.4 billion) and primary sector (RM103.7 billion).
In the services sector, 84.2% or RM1.01 trillion of total approved investment in the country was dominated by DDI, while FDI amounted to RM190.4 billion. As for manufacturing, 35.5%, or RM290.8 billion, of approved investment was contributed by DDI while the bigger chunk was FDI, totaling RM527.6 billion, he said.
The interactive session was moderated by Group Chief Economist/Head of AmBank Research Dr. Anthony Dass, with panellists comprising, MIDA Investment Policy Advocacy Senior Executive Director Sikh Shamsul Ibrahim Sikh Abdul Majid, MIDF Amanah Investment Bank Bhd Director and Head of Research Imran Yassin Md. Yusof, CG Global Profastex Manufacturing Sdn Bhd Founder and Managing Director Siti Padillah Abdul Wahab, and ViTrox Strategic Advisor Lim Wei Yee.
In kicking-off the panel discussion, moderator Dr. Anthony Dass stated his confidence that Malaysia will enjoy a thriving economy in 2023 despite the backdrop of a challenging global economic outlook. “The country is experiencing growth with more jobs, higher wages, stable inflation, and sound public finances and anticipates steady growth in DDI as borders reopen, healthy consumer spending, and more inflow of FDI. It’s also possible for Malaysia to see a 11.5% to 12% economic growth rate in the 3rd Quarter of 2023.” he added.
Panellist Sikh Shamsul Ibrahim said: “MIDA has formulated and executed strategic programmes to continue facilitating the establishment and expansion of multinational corporations (MNCs) and local large companies (LLCs) as well as mid-tier companies in Malaysia. Equipped with a structured and completed ecosystem in various industries, we promote strategic collaborations between domestic companies with MNCs and LLCs to become part of local supply chains with technological capabilities.
“To date, MIDA has managed to engage with over 30 MNCs and LLCs which involved more than 150 potential local suppliers.”
MIDA has been proactive in creating opportunities for domestic companies and mitigating gaps in the supply chain. Such initiatives have helped develop and upgrade domestic companies and encouraged them to adopt new technologies, smart manufacturing and Industry 4.0 practices.
He added the new Digital Transformation Ecosystem (DTE) has enabled to realise such aspiration to integrate such an advantage into the production processes.
Investors should see disruptive technology as an opportunity rather than a threat, and the results speak for themselves. For instance, the MIDA-PERODUA DTE programme is indeed a success story to train and upgrade the carmaker’s vendors through modern technology.
Meanwhile, panellist Imran said: “Reviving DDI was crucial in raising the economy’s productive capacity, accelerating technological progress, creating employment opportunities and expanding exports with the implementation of the Regional Comprehensive Economic Partnership (RCEP). As Malaysia becomes the ninth country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), businesses will benefit to further contribute to the Malaysia’s recovery.”
CG Global Profastex Manufacturing Sdn Bhd Founder and Managing Director Siti Padillah shared that her company, a contract manufacturer in the electronics industry, has propelled itself as a key player in the E&E sector with MIDA’s assistance over the years. She also expressed her hope that MIDA could help to facilitate local companies as well as CG Global to align with the country’s principles of Environmental, Social and Governance (ESG) and National Investment Aspirations (NIA), which in turn ensure the country’s long-term growth.
“Now, we are able to collaborate with universities and technical schools to develop dedicated programmes for future hybrid talents,” she said.
Adding to this, ViTrox Corp Bhd Strategic Advisor Lim Wei Yee said: “Small and Medium Enterprises (SMEs) in the manufacturing and manufacturing-related services sectors play major roles in building the nation’s industry ecosystem and the incentives provided by the Government have helped to turn some local companies into global players. MIDA’s dedicated unit named Domestic Investment Coordination Platform (DICP) had provided the needed support to bridge the link between businesses and funding, technologies and research capability.”
Moving forward, MIDA will continue to intensify efforts to increase DDI to strengthen the country’s economic recovery with the country transitioning to the endemic phase.
Substantially, the panel discussion surmised that for DDI to enhance economic growth for local entrepreneurs, there must be greater awareness created on the available initiatives, a greater role played by government policy in terms of generating growth focussed on Malaysian talent and increasing efficiencies through automation and digital transformation to mitigate issues such as labour shortages.
The bridge, MIDA plays, is to ensure investors are helped to allay global socio-economic headwinds and continue to create a conducive business ecosystem to ensure the sustainability of business and overall economic growth.
MIDA is the Government’s principal investment promotion and development agency under the Ministry of International Trade and Industry (MITI) to oversee and drive investments into Malaysia’s manufacturing and services sectors. Headquartered in Kuala Lumpur Sentral, MIDA has 12 regional and 20 overseas offices. MIDA continues to be the strategic partner to businesses in seizing the opportunities arising from the technology revolution of this era.