What is clear is that Unctad's report will likely show an improvement in foreign direct investment for Malaysia next year

THE signs may be clear that Malaysia has withstood the repercussions of the global economic crisis quite well. On another front, however, it is seeing less than satisfactory inflow of investments.

Last year, foreign direct investment (FDI) took a beating, and Friday's disclosure by the United Nations Conference on Trade and Development (Unctad) will give Malaysians further reason to worry about the nation's growth.

The world body said FDI into Malaysia plunged to US$1.4 billion (RM4.5 billion) from US$7.3 billion (RM23.4 billion). It is also a far cry from the average FDI of US$4 billion (RM12.8 billion) a year that Malaysia enjoyed between 1995 and 2005.

From the general public's perspective, it is crystal clear: FDI has nosedived since 2007 and the path seems to be heading only south.

Unctad's latest report is likely to be debated by economists, the government as well as parliamentarians in the coming weeks.

According to Unctad, Malaysia was not among the top 10 FDI destinations in the 2008-2009 period. However, the country made it to number five in terms of outward investment flow.

Malaysian companies invested US$8 billion (RM25.6 billion) abroad last year, down from US$15 billion (RM48 billion) in 2008.

In contrast, FDI into both Thailand and Indonesia exceeded their investments abroad.

In the case of Malaysia, outward FDI has been rising since early 2000 due to overseas investments by leading players in the banking and finance, construction and plantation industries.

Some may argue that Unctad's report may not be wholly accurate given the different way countries measure FDI.

In other countries, reinvestment is lumped together with the initial capital outlay, which will of course make the figure bigger.

The Malaysian Industrial Development Agency (Mida), however, measures approved investment and not profits ploughed back for expansion.

What is clear is that Unctad's report will likely show an improvement for Malaysia next year.

Mida has reported RM10.2 billion worth of potential investments from 28 foreign companies, including the big solar energy specialists, in the first three months of this year.

Granted, the investment environment has become more challenging. But as someone puts it, so has the region "as the neighbourhood becomes more prosperous".

This century will belong to the Southeast Asian region and its big economic partners. Malaysia will be a part of this development. The question is, how big a part.