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For developing countries, including Malaysia, foreign direct investment (FDI) plays an extremely important role in the expansion and development of socio economic development. Malaysian companies have been investing abroad since the 1970s, but it was only in the early 1990s that the countrys outflows of foreign investment really became the focal point of the economy. this country. Malaysia is emerging as the 5th largest investor among developing countries in Asia ( UNCTAD 2005 ). Malaysias OFDI flow has grown from RM0.45 billion in 1980 to RM10.41 billion in 1997 and reached RM36.7 billion in 2007. For the first timeFor the first time in 2007 , Malaysia s outward investment inflows were higher than domestic inflows . And this trend will continue to be maintained in the following years . In recent years , FDI inflows into Malaysia have continuously declined sharply , even behind Vietnam in the region . In contrast, investment capital flows to foreign markets continuously increased, even reaching the highest level in Southeast Asia. In 2011, the amount of FDI that Malaysia received was RM36.62 billion while the country invested RM46.69 billion abroad. The OFDI line of Malaysia on average in the period 19992008 accounted for between 2%4% of GDP. It is interesting that studies on the domestic impact of DIA on the host country are relatively limited compared with studies on the impact of FDI on the host country. This is partly due to the lack of reliable and comparable data, especially for emerging and developing economies. This is considered an urgent issue for Malaysias external economy, and there has not been much research on this issue. Therefore, I have chosen the topic: “ Direct Investment Abroad of Malaysia in the period 2015 2022. Lessons learned for VietNam” for research.
The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang NATIONAL ECONOMICS UNIVERSITY SCHOOL OF INTERNATIONAL TRADE AND ECONOMICS DEPARTMENT OF INTERNATIONAL ECONOMICS INDIVIDUAL EXERCISE ON THE INTERNATIONAL ECONOMIC MODULE Subject: Direct Investment Abroad of Malaysia in the period 2015 - 2022 Lessons learned for VietNam Full name of student : Phan Thi Hong Van Student ID : 11218059 Major : Management Science 63a Grade : International Economics_09 System of government Instructor : Assoc Prof Dr Nguyen Thuong Lang Email : langnt@neu.edu.vn, langnguyen3300@gmail.com Tel : 0983478486 Duration : Second semester of 2022-2023 school year SĐTSV : 0335191718 EmailSV : 11218035@st.neu.edu.vn Ha Noi, 29th December, 2022 The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang DECLARATION I hereby declare that this assignment is entirely my own work The quotations and materials used in the exercise are completely honest, are sourced from and guaranteed to the highest degree of accuracy to the best of my knowledge If the above is not correct, I take responsibility for my assignment. Hanoi, 29th December , 2022 Student Phan Thị Hồng Vân ACKNOWLEDGMENTS The first , I would like to express my deep gratitude to the lecturers of the National Economics University in general and the lecturers of the Institute of Commerce and Economics International students in particular have enthusiastically taught and imparted valuable knowledge and experiences to us Especially, I would like to thank Assoc.Prof.Dr Nguyen Thuong Lang, who directly guided me throughout the course of the exercise During the time working with you, I have not stopped learning to accumulate a lot of useful knowledge for myself, but also have learned the spirit of serious and effective work, these are very necessary things for me in my career future study and work Finally, I would like to express my sincere thanks to my family and friends who have always encouraged, contributed ideas and helped in the process of studying and researching to complete this exercise. Hanoi, 29th December , 2022 Student Phan Thị Hồng Vân The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang TITLE INTRODUCTION .2 Inevitability of topic selection .2 2: Objectives 3: Task .2 Research object and scope .2 CONTENTS .2 CHAPTER I: OVERVIEW OF MALAYSIA .2 Overview of Malaysia 1.1 Area: 329,758 km2 1.2 Geographical location: .2 1.3 Population: .2 1.4 Main language: Malay .2 1.5 Currency: Ringgit (MYR) .2 1.6 Economy CHAPTER II: DIRECT INVESTMENTS ABROAD MALAYSIA General concept of outward investment 1.1 Definitions of investment 1.2 Classification 1.3 Forms of Foreign Direct Investment 1.4 Overseas investment 1.4.1 Impact of outward investment on the host country: 1.4.2: Impact of outward investment on the host country 2 Direct Investment Abroad Malaysia 2.1 Overview 2.2 Malaysia's main investment partners 2.3 Main investment sectors 2.4 Malaysian companies investing abroad CHAPTER III: DIRECT INVESTMENTS ABROAD MALAYSIA IN THE PERIOD 2015 - 2022 Malaysia's offshore investment before Covid-19 (2015 - 2018) 2 Direct investments abroad Malaysia during and after the Covid-19 pandemic (2019 - 2022) .2 The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang Assess 3.1: Positive 3.2: Crane: .2 The policy's meaning: New Investment for DIA in 2015-2022 .2 CHAPTER IV: LEARNINGS FOR VIETNAM Difficulties .2 1.1 The potential of Vietnamese enterprises is still weak .2 1.2 Vietnamese enterprises lack experience in investing abroad 1.3 The competitiveness of Vietnamese enterprises in general is still low, making the ability of foreign investment still low 1.4 The legal framework is not comprehensive .2 1.5 The procedure for transferring capital and money is complicated 2 Solution 2.1 On the State side .2 2.2 On the business side .2 CONCLUSION .2 REFERENCES The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang LIST OF ACRONYMS FDI Foreign Direct Investment OFDI OUTWARD FOREIGN DIRECT INVESTMENT FPI Foreign Portfolio Investment DIA Direct Investments Abroad MR/MYR Ringgit GDP Gross Domestic Product Ftas Free Trade Area FEA Finite Element Analysis Glcs Government Affiliated Companies 10 ASEAN Association Of Southeast Asian Nations 11 UNCTAD United Nations Conference On Trade And Development The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang INTRODUCTION Inevitability of topic selection For developing countries, including Malaysia, foreign direct investment (FDI) plays an extremely important role in the expansion and development of socio -economic development Malaysian companies have been investing abroad since the 1970s, but it was only in the early 1990s that the country's outflows of foreign investment really became the focal point of the economy this country Malaysia is emerging as the 5th largest investor among developing countries in Asia ( UNCTAD 2005 ) Malaysia's OFDI flow has grown from RM0.45 billion in 1980 to RM10.41 billion in 1997 and reached RM36.7 billion in 2007 For the first timeFor the first time in 2007 , Malaysia 's outward investment inflows were higher than domestic inflows And this trend will continue to be maintained in the following years In recent years , FDI inflows into Malaysia have continuously declined sharply , even behind Vietnam in the region In contrast, investment capital flows to foreign markets continuously increased, even reaching the highest level in Southeast Asia In 2011, the amount of FDI that Malaysia received was RM36.62 billion while the country invested RM46.69 billion abroad The OFDI line ofMalaysia on average in the period 1999-2008 accounted for between 2%-4% of GDP It is interesting that studies on the domestic impact of DIA on the host country are relatively limited compared with studies on the impact of FDI on the host country This is partly due to the lack of reliable and comparable data, especially for emerging and developing economies This is considered an urgent issue for Malaysia's external economy, and there has not been much research on this issue Therefore, I have chosen the topic: “ Direct Investment Abroad of Malaysia in the period 2015 - 2022 Lessons learned for VietNam” for research 2: Objectives Analyze the situation of Malaysia's outward direct investment in the period of 2015 - 2022, indicating the impacts of investment capital decline go abroad From there, give suggestions, guidelines and draw lessons for Vietnam 3: Task First , introduce Malaysia, the economic situation and the situation of outward investment Second, analyze the situation of outward investment in the period 2015 - 2022 Third, the study makes some recommendations and draws lessons for Vietnam. The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang Research object and scope 4.1: Research object: Malaysia's Outward Direct Investment Object 4.2: Scope: In the period 2015 - 2022 Research method The exercise uses analysis, synthesis and comparison methods to solve the posed problem The data is collected and analyzed mainly from the data sources and estimates of the World Bank and the OECD Besides data from: Central Bank of Malaysia, CEIC, CIA,…. Structure of the thesis In addition to the introduction, the end, the table of contents, the list of references, the thesis is presented in chapters as follows: Chapter I: Overview of Malaysia. Chapter II: Direct investments abroad Malaysia. Chapter III: Direct investments abroad Malaysia in the period 2015 - 2022 Chapter IV: Lessons learned for Vietnam The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang CONTENTS CHAPTER I: OVERVIEW OF MALAYSIA Overview of Malaysia 1.1 Area: 329,758 km2 1.2 Geographical location: Malaysia is located in the center of Southeast Asia To the west is peninsular Malaysia and an archipelago of islands off the coast, to the north by Thailand, to the south by Singapore To the east, Malaysia is bordered by the southern part of the island of Borneo, Brunei and Indonesia. 1.3 Population: The total population of Malaysia in 2022 is estimated at 32.7 million as compared to 32.6 million in 2021 with an annual population growth rate of 0.2 percent The decline in population growth rate is due to the lower number of Non-Citizens from 2.6 million (2021) to 2.4 million (2022) This is in line with the restriction in international travel by countries during the spread of the COVID-19 pandemic worldwide in 2020 and 2021.The Citizens population increased from 30.0 million in 2021 to 30.2 million in 2022 with the growth rate decreasing from 0.8 per cent to 0.7 per cent over the same period 1.4 Main language: Malay 1.5 Currency: Ringgit (MYR) 1.6 Economy The economy of Malaysia is the third largest in Southeast Asia and the 34th largest in the world in terms of GDP.[25] The 2018 labour productivity of Malaysia was measured at Int$55,360 per worker, the third highest in ASEAN.[26] According to the Global Competitiveness Report 2021, the Malaysian economy is the 25th most competitive country economy in the world.[27] Malaysia is a middle-income country whose economy has been transformed since the 1970s from a production of raw materials to a multi-sector economy Malaysia has ambitions to become a high-income country by 2020 and further along the value-added production chain After taking office, former Prime Minister Abdullah tried to promote the development of the economy by directing investment in the high-tech sector, medical technology His efforts were continued by the new Prime Minister Najip Prime Minister Najib also continued to boost demand for domestic economic activity, abandoning the habit of relying on exports However, Malaysian exports, especially in the electronics industry, still play an important role in economic development Malaysia continues to The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang benefit greatly from oil exports, gas due to rising energy prices in the world However, the increase in domestic gas and gas prices, combined with tight finances, has forced Kuala Lumpur to reduce support from the government The government is also less dependent on gas supplier Petronas, which contributes more than 40% of the national income The central bank still maintains the foreign exchange rate and the operating mechanism is well implemented, which has limited Malaysia's financial risks during the global financial crisis As an oil and gas exporter, Malaysia benefits from rising world energy prices The drop in global oil prices in the second half of 2014 caused Malaysia to lose revenue and devalue the Ringgit The government is trying to reduce its dependence on state-owned Petronas Oil and gas supplies accounted for about 32% of government revenue in 2013 The oil and gas industry provided about 29% of government revenue in 2014, and the fall in oil prices took a financial hit to the government Malaysia is a major exporter, so it could also be hit hard by falling commodity prices globally Bank Negara Malaysia (central bank) maintains large foreign exchange reserves To attract increased investment, Najib introduced amendments to special economic and social incentives for Malaysians under the New Economic Policy of 1970 but withdrew them in 2013 after he met with significant opposition from other stakeholders In September 2013, Najib launched the new Bumiputra Economic Empowerment Program, policies that favor and promote the economic condition of Malaysians Malaysia's international trade is favorable due to its proximity to the shipping route through the Strait of Malacca, and manufacturing is a key sector Malaysia is an exporter of natural resources and agricultural products, with oil being the main export Malaysia was once the largest producer of tin, rubber and palm oil in the world The manufacturing sector has a large influence in the national economy, but Malaysia's economic structure is shifting away from this situation Malaysia remains one of the world's largest palm oil producers The government is promoting an increase in tourism to Malaysia in an effort to diversify the economy and reduce reliance on exports As a result tourism has become Malaysia's third largest source of foreign exchange, but it is threatened by negative impacts from the growing industry, with large amounts of emissions and wastewater along with deforestation forest From 2013-2014, Malaysia was ranked as one of the best places to retire in the world, coming in at 3rd place according to the Global Retirement Index This is one of the results of the "Malaysia My Second Home" program, under which foreigners are allowed to live in Malaysia on a permanent visa for up to 10 years Malaysia has developed into a hub for Islamic banking, and has the highest number of female workers in the industry Knowledge-based service industries are also The international Economics exercise Assoc.Prof.D Nguyen Thuong Lang growing To create self-reliant defense and support national development, Malaysia privatized some of its military facilities in the 1970s The act of privatization created a defense industry, up to In 1999, it was under the management of the Malaysian Defense Industry Council The government continues to promote the sector and its competitiveness, aggressively marketing the defense industry The Ministry of Science, Technology and Innovation regulates science policy in Malaysia Malaysia is among the world's largest exporters of semiconductors, electronic equipment, information and communication technology products Malaysia began developing its space program separately in 2002, and in 2006 Russia agreed to transport a Malaysian to the International Space Station as part of the sale of 18 Sukhoi Su- fighter jets 30MKM worth billions of dollars between the two sides The Malaysian government invests in the construction of satellites through the RazakSAT program Since shifting the direction of economic development from inward to outward, Malaysia's foreign trade activities have become very dynamic, which is the main driving force for economic growth Malaysia also has appropriate government policies for each period to develop foreign trade, including: • Preferential investment projects (including domestic and foreign investment) and tax exemption and reduction for projects producing goods and services export. • Establishment of free trade zones (FTAs). • Encourage enterprises to participate in exporting. • Allowing foreign investors to own 100% of the shares of the enterprise if they can export 80% or more of the products. • Implement export credit including insurance for export risks. • Simplify procedures and documents related to export • Establishment of a specialized export agency (MATRADE). • Organize many export promotion fairs. • Organize trade missions (including high-level delegations) abroad to explore business and investment opportunities. • Regularly renewing the structure of export products 10