Malaysia records jump in investments, trade surplus

Malaysia records jump in investments, trade surplus

KUALA LUMPUR (AFP): Investment in Malaysia's manufacturing sector more than doubled in the first half of the year, reversing a sharp drop, a minister announced yesterday.

The country's trade surplus also chalked up a 70 percent increase in the first half of 1994, International Trade and Industry Minister Rafidah Aziz said as she launched the country's latest trade and industry report.

"After assessing potentials elsewhere, foreign investors are returning to Malaysia, which is still the best investment destination," Rafidah told a news conference.

She said approved investment in the manufacturing sector, the engine of Malaysia's rapid economic growth, more than doubled to 10.48 billion ringgit (US$4.19 billion) between January and June this year.

During the same period in 1993, such investment totaled only 4.35 billion ringgit ($1.74 billion).

Foreigners made up of 4.6 billion ringgit or 43.8 percent of this year's manufacturing investment, led by the electrical and electronics products sector, Rafidah said.

Amid competition from China, Vietnam and India, Malaysia's manufacturing investment fell to 13.8 billion ringgit ($5.52 billion) during the whole of 1993 from 27.8 billion ringgit a year earlier, she said.

Competition

Rafidah said the investment surge this year showed Malaysia had regained the competitive edge "but we need to enhance this advantage to face up to stiff competition from other countries."

The manufacturing sector's share of Malaysia's exports increased to 74 percent in 1993 from 69 percent the previous year, according to the International Trade and Industry Report released yesterday.

The report said the value of manufacturing exports rose by 25.5 percent to 89.7 billion ringgit compared with 71.4 billion ringgit the previous year.

Rafidah added that Malaysia's trade surplus shot up by 70.7 percent to 3.79 billion ringgit in 1993 from 2.22 billion ringgit in 1992.

Exports increased by 16.9 percent to 121.21 billion ringgit while imports grew by 15.8 percent to 117.42 billion ringgit last year, the report said.

Rafidah said Malaysia registered a trade surplus with all its major trading partners, except Japan, with which it recorded a 32.6 percent higher deficit of 16.5 billion ringgit in 1993, partly due to the yen's strength.

Malaysia's major markets are the Association of Southeast Asian Nations (ASEAN), the United States, European Union and Japan.

ASEAN groups Malaysia with Brunei, Indonesia, the Philippines, Singapore and Thailand.