FOREIGN DIRECT

INVESTMENT (FDI)
• CHAN HUAN SENG
UFC180035
• LOH SOON CHING
UFC180041
• M. HARIZ BIN MUINNUDIAN
UFC180045
• NOORAIN MOHD SAID
UFC180047
• TAN KOK LAM
UFC180059
INTRODUCTION
• FDI is a type of investment that involves the
injection of foreign funds into an enterprise that
operates in a different country of origin from the
investor.
9 MEGA PROJECT OF MALAYSIA THAT COULD CHANGE
MALAYSIA

1. Tun Razak Exchange (TRX) – GDV RM40 billion project that set to become would class financial district
2. Melaka Gateway – GDV RM5 billion, the Entertainment precinct
3. Iskandar Forest City – GDV RM450 billion housing development
4. High Speed Train (HSR Malaysia-Singapore) – RM60 billion estimated cost, expected completion by 2026
5. Pan-Borneo Highway – RM29 billion estimated cost, expected completion by 2023
6. East Coast Rail Link – $40 billion (RM160 billion)
7. Merdeka PNB 118 – GDV RM1.4 billion – Tallest Building in Malaysia, expected completion 2024
8. PAVILION Kuala Lumpur – Shopping Mall. Invested by Qatar Holding LLC.
9. UMW Toyota Motor (UMWT) has confirmed plans to build a new factory in Malaysia.- (RM2 billion) a total sum that
includes land cost, construction, equipment and engineering support from Thailand and Japan. It is the biggest
investment ever by UMWT in the company’s history.
HIGH SPEED TRAIN (HSR MALAYSIA-SINGAPORE)

• Singapore and Malaysia formally

agreed to postpone construction until
end-May 2020 on Wednesday (Sep 5).
The new agreement was signed by
Malaysia's Economic Affairs Minister
Azmin Ali and Singapore's Transport
Minister Khaw Boon Wan at the Prime
Minister's Office in Putrajaya, Kuala
Lumpur, on Wednesday afternoon.

Retrieved from/:
https://www.channelnewsasia.com/new
s/singapore/kuala-lumpur-singapore-hsr-
rail-link-what-to-know-10284406
Implication of Malaysian
economic after
postponed project High-
Speed Rail (HSR) with
Singapore
 Impact on Microeconomic
• People can moves around quickly and easily
• Helps to improve traffic condition on the road
If HSR project • Brings up economy around the stations area
• Positive impact to tourism industry
ON • Airline company may lose some income (alternative
way for travelling)

• Construction and infrastructure company will loss

income from the project, but airline company will
If HSR project win.
• People have lesser alternative to travel to Singapore
POSTPONED
 Impact on Macroeconomic
Postponed HSR Project:

Government • Government to pay penalty of RM500 million but save cost

of RM300 billion
Spending • Government can spend more in health and education sector

Investment • Re-consider the investment activities around station areas

• For example, setting up companies or factories and
Activities investment in properties.

Job • Job opportunities that expected to be created is slashed

Opportunities • Losing of talent
RECOMMENDATION
Advanced Infrastructure
• Pakatan Harapan Government should continue HSR project
due to marginal benefit bigger than marginal cost.
• According to IDE Japan, Malaysia could make USD$1.589
billion annually from HSR project.

Competent Human Resources

• Government should make more effort to ensure domestic
skills is adequate and competent.
• To provide more free education and job training opportunities.
RECOMMENDATION
Stabilized Nation Politics
• Malaysia’s FDI inflow decreased to RM41.0 billion in 2017 due
to instability of Malaysia politic led by 1MDB scandal.
• Total FDI in manufacturing sector increased to RM35.0 billion
in May to September 2018.

Discontinue of Cronyism Culture

• Excessive government-link companies across sector has stop
private investment from foreign sources.
• Government should balance the private-government ratio
across all sectors to attract foreign investor interest.
RECOMMENDATION
Introduction of New Technologies
• Initiative to invent new technologies to replace excessive
reliance on foreign labours.

Department of Statistic Malaysia. (2018, July 24). Statistics of Foreign Direct

Investment in Malaysia, 2017. Retrieved from
https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=322&
bul_id=TENVb0xWNXFiTnJ4ekk3R2d0NkFkdz09&menu_id=azJjRWpYL0VBYU
90TVhpclByWjdMQT09.
CONCLUSION

• FDI creates many positive economic

opportunities and conditions such as, raising
the level of capital stock or investment, creating
new job and new production capacity which
leads to an increase in the employment,
transferring assets such as managerial skills and
technology to the host countries providing
sources of processes, new technologies,
products, management skills and forward and
backward linkages with the rest of the economy
and also organizational technologies.
• FDI has performed an important part in the
economic growth and development of several
nations in recent decades.