Lower FDIs in Selangor amid travel restrictions

The state was targeted to achieve RM12b of investments in 2020, without including the impact of the pandemic

by AFIQ AZIZ / pic by RAZAK GHAZALI

FOREIGN direct investments (FDIs) in Selangor is expected to drop this year due to all the restrictions in place since the enforcement of the various Movement Control Orders (MCOs) which has hindered business meetings and discussions among potential partners.

Selangor’s investment, industry and commerce, and small and medium enterprises (SMEs) state executive councillor Datuk Teng Chang Khim said global uncertainties due to the Covid-19 pandemic will also continue to hamper foreign investors’ appetite in choosing the state as its base.

Teng said as of September last year, RM8 billion of FDIs in the state were approved — all from the manufacturing sector, while the data on services sectors are still being processed.

“But for 2021, the challenges will be greater compared to last year because the results of 2020 were dependent on our efforts in 2019. In 2020, nothing much could be done as we did not have a single mission to attract foreign investors last year, except one that was held before the first MCO in March.

“So, we predict the FDI for 2021 would not be so encouraging,” Teng said in a virtual media conference after announcing the success of E-Bazar 11.11 Mega Sales Campaign yesterday.

In October, Teng announced that the state would only rake in RM8.5 billion of FDIs in 2020, which is half of the RM17 billion achieved in 2019.

Selangor was earlier targeted to achieve RM12 billion of investments in 2020, without including the impact of the Covid-19 pandemic.

“But, that does not mean Selangor took a back seat during the last MCO. We have shifted all the physical programmes online, including the discussion with investors.

“This included all the elements in the Selangor International Business Summit, which utilised digitisation throughout the programmes,” he added.

Due to the Covid-19 outbreak that became prevalent last March, the federal government implemented the MCO, closing the national borders which halted major economic activities.

Even though the government eased many regulations and restrictions in May and June, which allowed many to go back to work, the borders remains closed until now.

Some countries including Singapore and Hong Kong have tried to implement a bubble travel which allowed citizens to travel between cities that were deemed green zones.

However, the plan was cancelled due to the subsequent wave of the corona virus at the respective green zones.

In Malaysia, another round of MCO was reinforced last week due to the spike in Covid-19 cases, with a new record high of more than 4,000 infections reported in a day.

“For this year, we really cannot predict what the numbers of FDIs would look like, as we cannot even move now,” Teng said.

Nevertheless, he said one of the state’s biggest expo this year — the Selangor Aviation Show — which will showcase aviation related activities, is still on schedule to take place on April 2.

“But again, this will solely depend on the current MCO enforcement. We will still monitor the situation and see if the event will be continued or postponed to end of the year.

Meanwhile, Mentri Besar Datuk Seri Amirudin Shari announced that Selangor has gained RM1.04 billion in ripple effect to its economy through the two-month E-Bazar 11.11 Mega Sales Campaign conducted from Oct 26 to Dec 15 last year.

He said the amount includes a total of RM32.1 million of direct sales generated through the RM2 million in vouchers channelled by the state to e-commerce merchants, involving 73,791 players.

Amirudin said the state government would not initiate any policies to tax merchants, as the priority remains in digitalisation growth among the SMEs.

“It’s too early to tax them. But we will let this grow first. Maybe in the future we will discuss with certain organisations or tax agencies so the state will also benefit and get an income from it,” he said.