Govt defends RM16b investment outflow

International Trade and Industry ministry says that the investment outflow shows that Malaysian companies were globally competitive and seeking places with low labour costs.

KUALA LUMPUR: The government defended the nation’s investment outflow worth RM16.91 billion for the first quarter of 2012, saying it reflected the strength of Malaysian corporate sector.

Earlier, PAS MP Dzulkefly Ahmad raised concerns that Malaysia only received RM9.43 billion in foreign direct investment (FDI) in the first quarter, as opposed to the investment outflow worth more than RM16 billion.

The Kuala Selangor MP also asked the International Trade and Industry Ministry on how it planned to address the situation.

In a written reply to Parliament, the ministry said that there were many reasons on why Malaysian companies invest out of the country; among them is to expand their businesses overseas.

“The companies are also looking for places with low labour cost, on top of trying to gain access to foreign technology and brand to expand their ventures,” said the ministry.

It also said that taking invetsments to the global arena would help Malaysian companies to be more competitive and bring better profit margins back to the country.

Meanwhile, Dzulkefly rebuttted the ministry’s statement, saying the companies were not taking their investments to benefit from cheap labour cost.

“Those investing outside Malaysia are from the oil and gas industry, financial companies and those involved in wholesale and retail. These companies are not labour-intensive types,” he said.