| PUTRAJAYA, Malaysia, April 19
PUTRAJAYA, Malaysia, April 19 Malaysia announced
$3.7 billion in investments on Tuesday, hoping to jumpstart
foreign interest in its economy even as other Asian countries
try to stem speculative inflows in search of higher-yielding
Prime Minister Najib Razak unveiled 12 small and mid-sized
electronics, oil and gas and infrastructure projects as part of
a target to attract $444 billion of investments to become a
developed economy by 2020.
The investments include $159 million in spending by Infineon
Technologies (IFXGn.DE) to upgrade as production plant, a $165
million commitment from Asia Media to develop digital
media infrastructure and the creation of a state-owned energy
development agency to draw $106 million of investments this
"Today's announcement shows the continued interest of
investors in the Economic Transformation Programme," Najib told
reporters in the administrative capital, referring to the
10-year investment plan.
"The government aims to place the private sector as an
engine of growth."
Malaysia's investment drive had earlier drawn about $5
billion in commitments from oil giants Exxon Mobil and
Royal Dutch Shell Plc (RDSa.L) but most other projects have been
more modest. [ID:nSGE69O0B4]
In contrast to its neighbours Thailand, Indonesia and the
Philippines, which have been taking steps to stem hot money
inflows, Malaysia is trying to attract more investors.
Najib has set a goal of transforming the Southeast Asian
country into a high-income economy within 10 years by generating
new growth areas and restructuring the economy to lure
But analysts say a slew of past investment blueprints,
including a $105 billion plan to develop the southern Johore
state, has yielded limited results.
The Malaysian economy has been stuck in second gear as it
lacks the skilled workforce to become a financial services hub
but has outgrown its niche as a low-end manufacturing centre
with the rise of cheaper competitors such as Vietnam.
"For investors hoping for substantive reform, with these
announcements it's clear that nothing is taking off yet," said
Ibrahim Suffian, director at the independent opinion polling
firm Merdeka Center.
"But this helps to sustain Najib's popularity among the
public because it shows he is at least doing something about the
Foreign ownership of stocks on Malaysia's exchange stood at
just 21.2 percent of market capitalisation in September, versus
26.2 percent in 2007. Portfolio investment was at 3.5 billion
ringgit in the fourth quarter compared with 16.3 billion ringgit
in the third quarter.
Over the years, Malaysia has partially opened its financial
sector to more competition but investors want the government to
take more aggressive steps to reduce its fiscal deficit and
overhaul an affirmative action policy they say hinders
(Editing by Liau Y-Sing)