Malaysia’s Financial Rebound

Global Business

The global financial crisis took a heavy toll on U.S. foreign direct investment in Malaysia. That changed last year when the U-S once again became Malaysia’s largest investor and export buyer. But it’s the quality not quantity of those investments that Malaysian officials are keeping an eye on. 

Malaysia’s Financial Rebound

Malaysia’s Financial Rebound

The global financial crisis took a heavy toll on U.S. foreign direct investment in Malaysia. That changed last year when the U-S once again became Malaysia's largest investor and export buyer. But it's the quality not quantity of those investments that Malaysian officials are keeping an eye on.

Workers overhaul aircraft engines at General Electric’s facility just outside of Kuala Lumpur. The center is just one facet of the businesses; including healthcare, power, water, and oil and gas that GE has developed in Malaysia over the past 40 years.

GE is one of just a few multinational corporations to make Malaysia its Southeast Asia hub. The company says it looked at such factors as cost, connectivity and infrastructure before opting for Kuala Lumpur in 2002, and that the investment has paid off.

U.S. companies last year pledged to invest almost 2 billion dollars in manufacturing in electrical and electronics, mining, healthcare, petroleum, and food. Intel is the largest American investor here, having invested around four billion dollars and employing 9,000 people. In many ways, Intel is a model for what Malaysia’s government wants to see in a foreign investor. It’s branching out well beyond just traditional manufacturing, in which Malaysia is losing its competitive advantage. Other US companies are starting to follow Intel’s lead.

Still, Malaysia has work to do to convince more investors to move into higher-end services that provide better paying jobs. The country acknowledges it has to improve its education system to produce skilled workers of the type those companies are going to be looking to employ