The decline in FDI inflows into Malaysia to US$1.38 billion in 2009 is mainly due to:
(a)the global economic crisis which started in 2008 and continued in 2009, causing global FDI to decline by 37% as investors worldwide were more careful in making investment decisions involving large funds;
(b)Malaysia is in a transition from capital intensive to knowledge-based industry;
(c)Rising competition for FDI, from both new emerging market economies and established investment centres; and
(d)Many approved projects saw delays in implementation because of the then uncertain economic environment.
Malaysia continues to undertake new initiatives to attract FDI. This is evident from the FDI inflow in the first quarter of 2010, which amounted to US$1.41 billion compared with US$1.38 billion in 2009.
Additional initiatives are under study by the PEMANDU labs on the New Key Economic Areas (NKEAs). Several concrete investments have been identified and they will be announced later in the year.
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