Malaysia lead economist Apurva Sanghi said the sectors that could be opened up include digital, legal, accounting, logistics, and transport.

“Malaysia’s investment-to-gross domestic product (GDP) ratio has been consistently coming down since the Asian financial crisis from a high of over 40% of GDP to below 20% today,” he said, adding that reviving investments is an essential aspect of boosting Malaysia’s growth.

According to OECD’s services trade restriction index, Malaysia is the eighth most restricted country when it comes to services among over 50 countries, Sanghi pointed out.

“Proactively liberalising services will remain key in boosting Malaysia’s investment, and the New Industrial Master Plan’s successful execution,” he said, adding that the NIMP will give renewed impetus to investments, both foreign and domestic.

In 2022, Malaysia saw the highest increase in net FDI inflow relative to its Asean neighbours at 39% and is ranked 23rd in the world.

He noted that among developing countries, Malaysia has successfully attracted the top projects for telecommunications such as the YTL green data centre park, and the FGV agri-food valley integrated farming project.

He said that Malaysia’s strengths are its open economy, great physical geography, deep institutional investor base, amongst others.

However, according to World Bank investors’ surveys, Sanghi said the top three factors to attract FDI are political and policy stability, quality of infrastructure, and talent.

“Although Malaysia has done well on the first two, it’s talent where Malaysia can do a lot better than it has when it comes to attracting FDI.

“Quality of talent also affects domestic investments,” he said, adding local companies have also complained of a lack of talent, and the talent they get ultimately is poached by foreign firms.

“So, the talent gap is where the rub is for Malaysia,” he added.