Malaysia’s financial account shows a large net outflow of investments in both the first (far right column) and second quarters of 2009.
| Financial Account | RM million | Q2/09 | -24,198 | -29,758 | |
| Direct Investment Abroad | RM million | Q2/09 | -8,964 | 435 | |
| Direct Investment in Malaysia | RM million | Q2/09 | 863 | 2,761 | |
| Portfolio & Financial Derivatives – Net | RM million | Q2/09 | -9,933 | -12,153 | |
| Other Investment – Net | RM million | Q2/09 | -6,163 | -20,799 |
Where is all the money going? – Source: Bank Negara
The latest Unctad investment flows report shows a similar net outflow of foreign direct investment in 2008.
I stumbled across those figures while writing the following piece on the Malayisan economy for Asia Times:
PENANG – Although Malaysia appears to have weathered the worst of the global economic slowdown, indications of a recovery are tentative and clouded by a worrying trend of net foreign investment (FDI) outflows as foreign companies shy from new commitments and local ones seek opportunities abroad.
Malaysian gross domestic product (GDP) contracted 3.9% year on year in the second quarter, an improvement on the 6.2% collapse recorded in the first quarter. With exports representing as much as 120% of Malaysia’s GDP, the slump in global demand and commodity prices has taken an especially heavy toll on Malaysian producers. Full article here.
Related posts:
Politicians taking their money out
Chinese taking their money out
Multinationals taking their money out
Why?
The unstable political environment
The constant Chinese and Indian bashing rhetoric
Too many public holidays (as most foreign investors I spoke to had complained)
Singapore is laughing, so is China.
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Ms Monique: You should not make sweeping and mischievous statements like “Chinese taking their money out” and “Politicians Taking their money out”. All sorts of people are taking their money out and you are making trouble for ALL Chinese and ALL politicians when you do not take care and think before you write.
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I overhead a conversation of someone who worked for one of the 5 big Al Longs. Seemed the Alongs are also taking money out and investing them in businesses in China. So, even the Ah Longs are doing it.
Maybe we all should be doing it before it is too late.
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Najibnomics? Sickening.
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We have the best brains in the Finance Ministry
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It will be most interesting to see the outcome on the capstone project by Harvard on ‘Najibnomics’
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What about all the money being sent back by each foreign worker ? we have to only blame our own people, nowadays foreigners do the cashier job at supermarkets and the bigger dapartmental stores,,even in top restaurants you see foreigners working as waitors , I wonder why can’t Malaysians do this work instead of complaining about the government and making a nuisance of themselves ?
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Where the money goes? Probably go to Swiss Banks.
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Anil, I think you to rewrite this paragraph in your article.
“Last year, approved foreign investment slumped to $3.0 billion in the first half of 2009, compared with $13.3 billion for the whole of 2008, according to the Malaysia Industrial Development Authority.”
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Thanks for pointing that out. It should read:
“Approved foreign investment slumped to $3.0 billion in the first half of 2009, compared with $13.3 billion for the whole of 2008, according to the Malaysia Industrial Development Authority.”
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People,
Well, I have been shouting all the time. IT’S ECONOMY, STUPID! Economy bad! Business bad! People no jobs! No food on the table! People don’t spend! Voila, One damned vicious cycle.
How do we get out of problems when FDI keep following out? Containing outflow FDI. Prim Pumping policy just like what most government would do.
What shall we do?
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We’ve bought many barrels of San Miguel. Would that account much for the roll-off?
No signs of ME petro-dollars coming in. Maybe we should have some small fire-house sales. Lelong something so the China guys would roll along in. They’re the only ones who have any dough. Or hasn’t Najib’s trip made any (impact) yet?
Hopefully we won’t bite rusty bullets.
So what’s on for the October budget?
I’ll bet a kilo of buah pala we’ll have some kind of lelong!
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Firstly,Businessmen see the country quite a risky place to invest now. The killing of the most wanted terrorist in Indonesia recently could create some ripples in this region. There could be repercussions in many other ways by others connected to this man. We see almost zero investment in South Thailand, South of the Philipines and of course in countries like Afghanistan and Pakistan. Secondly, businessmen do not favour the racial and religious issues affecting the country. Politicians are stirring this to stay in power. Businessmen,however,look at this as a liability. They prefer safer heavens, at least where they can operate with peace of mind.Thirdly, Malaysia has been getting too much bad publicity of late. Not many businessmen would want to associate themselves with countries that have “image” problems.
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Anil, I suggest you enable threaded (nested) comments for people to reply directly to commentators.
That is much easy for us to follow many discussions in the comments.
Under settings > discussion > Other comment settings > Enable threaded (nested) comments
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Done. Let’s give it a try.
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Yes, the comments are more organized now.
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The fundamental issue is where is future growth going to come from ?
Our manufacturing is unable to compete with China, India or Vietnam, and is slowly hollowing out. Our service sector seems to benefit foreign workers ( rather than locals ) as they form the bulk of staff, and repatriate most of their savings. Similarly, the plantation industry mainly employs foreigners as has reached a saturation point due to lack of land.
Construction industry ,particularly residential and commercial, is another dead end, as we have overbuilt over the last decade or more.
R & D sector like biotech and IT is another dead end due the poor quality of universities coupled with the brain drain of bright Chinese and Indians. Mineral sector which is dominated by Petronas is facing problems of depleting oil & gas reserves, with Malaysia destined to become a net importer of petrol in 3 to 5 years time.
Hence the capital outflow , as many Malaysians and foreigners, cannot seen any significant sector that is worth investing in.
The only source of growth appears to be the public sector ( government )which today employs nearly 1.4 million Malaysians in its various branches. A day will come when the government will no longer be the employer of last resort due to fiscal constraints .
We have unfortunately wasted our precious resources on many uneconomical mega projects, and coupled with corruption,croynism and flawed policies, are now in a precarious position.
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I’m really sick to see restaurants and hawkers filled with foreign workers.
My own action is to boycott those outlets and only patronize outlets staffed by local people.
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Your discussion did not take into account the outflow of wealth per Sarawak timber logs, traded at full international prices only when they are out of Malaysian waters.
Soon we will qualify as the sick man in ASEAN, as FDI flows to our neighbours. The Garuda is about to take off like China in 1979.
While we have a severe international image problems, our brother Yohdiyono stood steady next to Brazil’s Lula and just 1 place from Obama at front row at G20. Take note of our ASEAN giant from whom we can learn more than a lesson on how to salvage our international image.
It has surely to do with our being “on the wrong side of history,” as you would have heard Obama repeat during his recent speech at the UN General Assembly.
Kuching, Sarawak.
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anil,
when news that WD was closing their plant in Kuching, you blogged about with alot of hue and cry. The plant still stands now with a change in ownership.
WD has also increased their presence in PJ, they acquired the additional lots nearby…slowing down instead their operations in Thailand.
I’m not an employee nor fan of WD. Heck I don’t even use their hard drives. But if you raise issues selectively with a somewhat sensationalist tone to draw attention to these “corporate atrocities”… I do suggest following up with any new developments as well…positive or negative…cos that would mean workers being hired, jobs are created or maintained etc.
Now that would really be having justice flow like a mighty river.
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Frightening indeed.
What is going to happen to the common people
like me who has no money to transfer abroad.
Die-lah
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