High investment outflow a sign of LOSING CONFIDENCE - Dzulkefly Ahmad

Figures from the Statistics Department showing RM16.91 billion in national investment outflow in the first quarter of 2012, surpassing the total for 2011, prompted concerns from PAS's Dzulkefly Ahmad.

The Kuala Selangor member of parliament said the total was twice the investment inflow of RM7.48 billion this year.

“That means the net outflow investment from the country in the first quarter alone was RM9.43 billion, a number bigger than RM10.07 billion for the whole of 2011,” he said.

Dzulkefly, who heads PAS's Research Centre, also dismissed a claim that the high outflow was good for the country, saying it was not due to investors' need for cheaper labour.

He explained that a study would show that the investment outflow affected three main sectors of National Key Economic Area (NKEA) namely oil and gas, finance and insurance and wholesale and retail, and not the manufacturing sector which depends heavily on labour costs.

The trend, he said, was worrying and ran on the opposing trajectory of prime minister Najib Razak’s aim to increase domestic direct investment to 80 percent, out of a 93 percent increase in investment by 2020 complemented by 20 percent of foreign direct investment.

Dzulkefly warned that such a trend was unhealthy as the country needed more funds to spur growth under the government's Economic Transformation Programme (ETP) and Entry Point Project (EPP) locally.

“It cannot be denied that this points to the level of investor confidence in the the strength of the country’s competency and growth in the medium and long run despite various incentives by Najib for investments, such as the Tun Razak Exchange,” he added.

-Harakahdaily