Malaysia a key market for global investors, says report

Written by Surin Murugiah
Friday, 18 September 2009 00:10

KUALA LUMPUR: Malaysia has been identified as one of the key markets for global investors within the next five years, according to new research published by UK Trade & Investment.

The country moved eight notches up to be ranked fifth this year in the list of countries that are seen to be the next wave of priority markets, based on a survey of more than 540 high-level business executives.

Commissioned by UK Trade & Investment, the Survive and Prosper: Emerging markets in the global recession report gives fresh insights into the opportunities and longer-term strategic importance offered by emerging economies.

The report examines global business attitudes to emerging markets in light of the global downturn.

In a statement yesterday, the UK’s Secretary of State for Business, Innovation and Skills, Lord Mandelson, said businesses should be strategic about their exports and plan for the long term.

“Many emerging markets are outperforming developed economies, and are expected to grow strongly for years to come,” he said.

In welcoming the report, Prime Minister Datuk Seri Najib Razak said he believed Malaysia had turned a corner and was aggressively advancing policies that reinforced the country’s competitiveness at a global level.

“I am pleased to see that our trading partners confirm this. The liberalisation process initiated by this government recognises the fact that Malaysia must remain open in order to remain competitive and that the process of opening up to overseas investment is critical to our overall economic development.

“We have made large strides in opening the financial services sector in particular. Supported by our talented and multilingual workforce, important institutional reforms and a firm commitment to the Rule of Law, we feel Malaysia is well on the path to becoming a top competitor in the global economy and a premier destination for foreign investment. I think this recent report reflects this,” he said.

The British High Commissioner to Malaysia, Boyd McCleary, said the report was a clear recognition by the global business community of Malaysia’s continued commitment towards attracting foreign investment.

“The recent liberalisation measures are a further indicator that Malaysia is moving in the right direction. Britain has always been a leading investor in Malaysia, with estimated cumulative investments of over £20 billion (RM115 billion) over the last 30 years.

“British companies have long valued the dynamic trade relations with Malaysia and with the release of this report, I am confident that more investment opportunities will arise,” he said.

Among the key findings of the report are that 77% of companies expect the prospects for the global economy to improve in 2010-11. It also found that despite the economic downturn, emerging markets support global profitability.

Emerging-market economies, on the back of the continued high growth and market size of China and India, have outperformed those of developed countries in 2009, the report said.

The survey also found 60% of the companies expected to derive more than 20% of their revenue from emerging markets in five years’ time, almost double the current 31%.

China was cited as the preferred investment destination over the next year and beyond by most respondents (45%) followed closely by India (43%) and other Asian nations (35%).

Meanwhile, political risk (including the risk of nationalisation and expropriation) was cited by 50% of survey respondents as the greatest government-related obstacle to doing business in emerging markets.