Speaking to FMT, Barjoyai Bardai of Universiti Tun Abdul Razak and Center for Market Education CEO Carmelo Ferlito said there were several ways of interpreting the information.
Barjoyai spoke of the many ways of measuring FDI, namely the commitment to invest, application receipts, investment approvals, and finally, the actual implementation of projects.
Until the projects actually begin, he said, the FDI figures would remain “birds in the sky”, especially since Putrajaya had yet to release the full lineup of investors.
International trade and industry minister Azmin Ali said recently that FDIs into Malaysia soared by 223.1% compared with the same period last year, with the manufacturing, services and primary sectors recording RM107.5 billion of total approved foreign and domestic direct investments.
“It is commendable that we have managed to get so many approved projects,” Barjoyai said. “But if we have approved, what are the responses from investors? Have they really moved in and initiated their projects?
“Because times are very challenging globally, it is quite surprising that foreign investors have decided to come here. Until the projects are implemented, we have to be a bit sceptical. ”
Ferlito said one contributing factor to the big numbers could be the 68% decline in FDIs last year, which meant a lower baseline.
“It may be more appropriate to evaluate things properly,” he added. “How many of the approved FDIs turned in actual investments and job creation?”
He suggested that it might be wise to measure the delta between approved and actual FDIs.
Ferlito also said it would be interesting to conduct a multivariable analysis on the impact of both foreign and domestic direct investments and to take into account expatriates entering and leaving the country.
Barjoyai said Putrajaya needed to be selective with investments to ensure the attraction of high-technology projects that would elevate Malaysians rather than those that were labour intensive.
He said Malaysia needed to focus on drawing partners geared towards the Fourth Industrial Revolution (IR4.0) and artificial intelligence (AI).
He added that Malaysia used to be so focused on drawing investors through incentives and promotion programmes that many who came in treated the nation like a “dumping ground”.
“Some companies are fond of doing this, moving their manufacturing facilities to less developed nations because they want to avoid the negative impact on the environment in their home countries.
“The margin of operations is also very small. They hire foreigners and treat them badly and this gives the impression that Malaysia is doing so,” Barjoyai said.
Ferlito said Putrajaya should send a clearer message to foreign investors about their strategic position in the country as well as to rethink its racially-oriented messages.