Malaysia moves up to 5th spot in UK trade report

Malaysia has been identified as one of the key markets for global investors, according to a new research published by UK Trade and Investment, a British government body.

In the report revealed at the Economist Intelligence Unit's Emerging Markets Summit recently, UK State Secretary for Business, Innovation and Skills, Lord Peter Mandelson said the report examines global business attitudes to emerging markets in light of the global downturn.

It ranked Malaysia fifth in the list of countries that are seen to be the next wave of priority markets, a marked improvement from 13th position last year.

"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," said Mandelson.

Commissioned by UK Trade and Investment, the report gives fresh insights into the opportunities and longer term strategic importance offered by emerging economies.

It is based on a survey of more than 540 high-level business executives from across 19 sectors; over 40 per cent of those interviewed worked for companies headquartered in emerging markets.

Prime Minister Datuk Seri Najib Razak, who welcomed the report, said Malaysia has turned a corner and is aggressively advancing policies that reinforce the country's competitiveness at global level.

"The liberalisation process initiated by the government recognises the fact that Malaysia must remain open in order to remain competitive," he said in the statement.

Najib also said the process of opening up to overseas investment is critical to the country's overall economic development.

This is supported by Malaysia's talented and multilingual workforce, important institutional reforms and a firm commitment to the rule of law.

"We feel Malaysia is well on path to becoming a top competitor in the global economy and a premier destination for foreign investment. I think the report reflects this," he said.

Meanwhile, British High Commissioner to Malaysia Boyd McCleary said the report is clear recognition by the global business community of Malaysia's continued commitments towards attracting foreign investment.

"The recent liberalisation measures are an indicator Malaysia is moving in the right direction," he said.

Britain has always been a leading investor with estimated cumulative investments of over STG20 billion (RM114 billion) over the last 30 years.

Among the key findings in the report include that 77 per cent of companies expect the prospects for the global economy to improve in 2010-2011.

Sixty per cent of companies surveyed expected to derive more than 20 per cent of their total revenue from emerging markets in five years - almost double the current figure of 31 per cent.

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