Malaysia is ranked 16th top prospective host economy for 2013–2015, up three spots, according to the World Investment Report 2013 released by the United Nations Conference on Trade and Development (Unctad).
The ranking was based on the percentage of respondents selecting an economy as a “top destination”.
Subtitled, Global Value Chains: Investment and Trade for Development, the report was launched by International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
In 2011, Malaysia was ranked 11th among the Top 20 economies with the highest foreign direct investment (FDI) rates of return, or FDI profitability, at 17%, testimony to Malaysia being a profitable location to do business.
Malaysia also maintained its ranking as the third largest recipient of FDI in Asean, the report said, adding that the country’s net FDI inflows last year saw a decrease of 17.4% to US$10.1bil (RM32.13bil) compared with US$12.2bil in 2011.
The bulk of Malaysia’s FDI inflows was in the manufacturing sector, unlike other Asean countries where investments were in the infrastructure, services and primary sectors, the report said.
“The decline in FDI inflows into Malaysia was in line with the global drop in manufacturing, where Unctad attributes it mainly to the decline in the value of greenfield projects,” it said.
The report said the domestic manufacturing sector was going through a period of transformation and restructuring, with industry players expected to reduce their investments in low-value sectors and increase their activities in research and development, high knowledge, high value-added and high technology industries.
Meanwhile, Mustapa said the Government had undertaken various measures to promote value-added activities, which include adopting an ecosystem approach to promote private investment, encouraging outsourcing activities and introducing domestic investment initiatives.
He also said many prominent multinational companies had chosen Malaysia to establish their regional and global operations.