By S JAYASANKARAN
KL CORRESPONDENT
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MALAYSIANS invested US$14.05 billion abroad last year, far outstripping the US$8 billion the country received in foreign direct investment (FDI). According to the United Nations Conference on Trade and Development's (Unctad) World Investment Report, Malaysian overseas investment surged 27 per cent in 2008 from the year before. It was also the third consecutive year that the country's FDI outflows surpassed inflows.
The report also noted that Malaysia's FDI inflows and outflows had seen 'very little impact' from the global economic crisis despite significant, and deleterious, effects on overall investment worldwide.
Should anyone worry?
Not really. The figure is a total one and it would include Malaysians purchasing shares and homes abroad, for one thing. One also suspects that it might include repatriations by foreign workers in Malaysia to their respective homelands, which are sizeable and probably exceed US$2.5 billion a year.
But mostly it reflects the evolving structure of Malaysian corporations which have become increasingly globalised and integrated into the world economy.
The ringgit first began hitting the road - in sizeable numbers - in the early 1990s. Prodded by the exhortations of then prime minister Mahathir Mohamad, Malaysian corporations began pushing abroad. Indeed, Dr Mahathir routinely took along delegations of businessmen with him whenever he made official trips abroad, the better for him to open doors and show them opportunities.
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The rush abroad was galvanised by the Asian financial crisis. Then construction firms like IJM, Gamuda, UEM and Ranhill bid for jobs in India, Africa and the Middle East because the slowdown in Malaysia had dried up jobs. Not all succeeded but some (IJM certainly) became near-global heavyweights.
Faced with dwindling sources of growth back home, national oil corporation Petronas first branched out of Malaysia in the 1990s with the then aim of having 30 per cent of its revenues coming from overseas in 10 years. Almost 20 years later, the figure is closer to 45 per cent.
Indeed, the report ranked Petronas 84th among the world's top 100 non-financial transnational companies in terms of foreign assets. In terms of the top 100 non-financial transnational companies from developing countries, the national oil corporation was ranked fifth in foreign assets.
For some of Malaysia's other sectors, the problem has been how to manage success. Telecommunications, power and satellite-TV, for example, were all relatively new and exciting markets to be in during the 1990s when annual growth rates were double-digit.
But by the 2000s, the markets were relatively mature and the competition intense. Backed by the reserves accumulated in Malaysia, companies like Tanjong Plc and YTL Corporation began bidding for power jobs in places like Egypt and England and have since become far bigger players than they originally were.
In fact, Petronas was not the only Malaysian company singled out by the UN report. The others who made the non-financial cut included YTL Corp, Genting, Sime Darby. Telekom Malaysia and Tanjong.
It isn't just conglomerates investing abroad; in their train go consultancies and other service firms who might get their first break from Malaysian firms abroad but who have since set up shop there. HSSI Integrated, one of Malaysia's largest civil engineering consultancies, is one such example with offices in India and the Middle East.
The globalisation of Malaysia Inc isn't something to be feared; it is a natural consequence of a middle-income emerging economy groping its way towards maturity. It should be welcomed.
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