Depend less on FDI to develop a competitive edge, says Umno man

Umno information chief Shahril Hamdan says we have lost our edge to attract foreign investments as other Asean countries have caught up.

PETALING JAYA: Umno information chief Shahril Hamdan said the government should invest more in domestic or indigenous technology and capital to maintain an economic competitive edge with other neighbouring Asean countries.

Speaking during an online forum organised by Chevening Alumni on youth in Malaysian politics, he said aside from human capital development, the country should move away from an over-reliance on foreign direct investments (FDI).

“A mindset shift that I’d like to see Malaysia attempt in the next decade or so is, alongside human capital development, we should invest in indigenous technology and indigenous capacity.

“This will allow us to not get too excited or rely too much on FDI going up and down,” Shahril said.

He was responding to a question on how Malaysia can maintain economic competitiveness with neighbouring Asean countries.

Shahril added that relying too much on FDI would inadvertently take away the focus from developing domestic or local capabilities.

Malaysia, he explained, was no longer the low-cost base that it was in the 1980s or 1990s.

“We are also no longer so special to foreign investors in the sense that other Asean countries can speak English as well as we can. They have caught up with us. The competitiveness of Malaysia to attract FDI can be built.

“But why rely on that FDI when I think a more radical approach is to think of what can be invested internally.”

He added that the government would however need to play a huge role in expanding these domestic investments.

Earlier this month, the international trade and industry ministry said FDI made up 38.8% of the total of RM109.8 billion worth of approved investments.

Domestic direct investments accounted for 61.2%, or RM67.2 billion.