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18 results

Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
  • Helen Ting Mu Hung, Andrew Jia Yi Kam
  • Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    01 September 2023
  • This report presents findings from a nationwide face-to-face survey of 2,627 Malaysians between March and April 2021 regarding public perceptions on the Election Commission (EC) and on election management.

    Malaysians by and large hold a cautious, moderate affirmation of the state of democracy in Malaysia, and of it having made notable progress over the past decade. A quarter of respondents regard the 2018 general election to be very free or/and fair, while 43 per cent think that it was free/fair though not without problems. This perception appears to have been influenced by the fact that there was a change of federal government. Public confidence in the integrity and impartiality of the election management process and the EC is weakly affirmative, as revealed by a majority expressing a lack of confidence in an eventual online voting system being handled transparently. Urban residents generally have greater distrust in state institutions.

    Some notable contrasts in regional trends: (a) Sarawakians have a high level of trust in state institutions; (b) Sabahans have the lowest appreciation for the progress made in the state of democracy in the country, the lowest satisfaction with civil liberty, or the lowest trust in state institutions except for the Malaysian Anti-Corruption Commission (MACC) and the EC; and (c) West Malaysians have the lowest level of trust in the MACC and EC but express the highest level of appreciation for the progress that have made in the state of democracy.

  • Foreword

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    01 September 2023, pp v-vi

  • Summary

    The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

    The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

    The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

    THE EDITORS

    Series Chairman:

    Choi Shing Kwok

    Series Editor:

    Ooi Kee Beng

    Editorial Committee:

    Daljit Singh

    Francis E. Hutchinson

    Norshahril Saat

  • Economic Outlook for Southeast Asia: Living with COVID-19

  • Edited by Daljit Singh, ISEAS - Yusof Ishak Institute, Thi Ha Hoang, ISEAS - Yusof Ishak Institute
  • Book:
    Southeast Asian Affairs 2022
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    01 September 2023, pp 21-41

  • Summary

    The hope that the COVID-19 pandemic would be contained in 2021 did not materialize as the coronavirus continued to ravage the economies around the world, including Southeast Asia. Although there were important lessons learned from 2020, the pandemic was far from over in 2021 for most Southeast Asian economies. Uncertainty continued to prevail as the region once again struggled with managing the pandemic and juggling between health and economic needs. Living with COVID, rather than a “zero COVID” strategy, soon emerged as the new norm for some of the economies in Southeast Asia,

    This chapter assesses the key factors affecting economic growth and recovery in 2021 as well as the prospects for sustaining the recovery in 2022. There are four main sections in this chapter. The second year of the COVID-19 pandemic in Southeast Asia is reviewed in the first section. The second section examines the impact of COVID-19 on regional growth in 2021 and 2022. The third section discusses the main factors that can affect the prospects of achieving or deterring the achievement of the forecasted growth. The conclusion is given in the last section.

    Continued COVID-19 Disruptions

    Containing the COVID-19 Pandemic: The Race to Vaccinate in Southeast Asia

    One year of hard-earned lessons from managing the pandemic and the rollout of COVID-19 vaccines at the start of 2021 provided hope for global recovery. But the subsequent emergence and rapid transmission of the Delta variant, which became the dominant form of COVID-19, soon disrupted the fragile global recovery. Once again, countries all over the world continued to wage battle against the coronavirus through vaccinations as well as a transition towards managing COVID-19 as an endemic disease.

    In Southeast Asia, the number of COVID-19 cases started to surge upwards in the first quarter of 2021 (Figure 1). Daily COVID-19 cases per million shot up towards the second half of the year. This was due in part to the spread of the highly contagious Delta variant and the slow rates of vaccination as well as the easing of restrictions in the early part of the year. The number of new cases per million peaked in the third quarter for some economies, but the average daily caseload in Southeast Asia started to decline towards the end of October 2021.

  • Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    01 September 2023, pp 1-61

  • Summary

    INTRODUCTION

    A lot have been published on the subject of democracy in Malaysia, yet there are few comprehensive survey-based academic studies on how Malaysians view the state of democracy, and, even rarer, in relation to election management and the country’s Election Commission (EC). Welsh (1996) on political attitudes among Malaysians in 1994 was one such study and based on a survey of 400 respondents, while the study by Muhammad Fathi Yusof et al. (2015) on public perception towards the EC is based on a small survey of seven questions among 1,104 respondents in 2014/15. Periodic and systematic international surveys on democracy have been conducted by the Asian Barometer of Democracy surveys, and Malaysia has been included since 2007 during its Second Wave Asian Barometer Survey (ABS). Thus far, three working papers or report with a focus on Malaysia have been produced from the ABS (Welsh, Suffian and Aeria 2007; Welsh Suffian and Aeria 2008;Welsh 2014). Otherwise, outputs from ABS have been in the form of cross-country regional studies among several Asian countries which include Malaysia (Chang, Chu and Welsh 2013, Chu, Welsh and Chang 2013, Huang, Chu and Chang 2013; Ikeda 2013; Lu 2013; Mujani and Liddle 2013; Park 2013; Wang and Tan 2013; Chu and Welsh 2015; Kang and Lee 2018). While cross-country comparative studies are useful in contextualizing political perception in Malaysia within an international context, they do not provide a detailed understanding of Malaysians’ perceptions on the EC and other state institutions, the management of elections, and the state of democracy.

    This report is an analysis of the findings from a nationwide survey conducted with 2,627 respondents between March and April 2021. The objectives are to find out how Malaysian citizens evaluate the performance of the EC in managing elections, perceive the neutrality of the EC, and also how they perceive the state of democracy and of political authorities in the country. As the EC is one of the fundamental institutions in the operationalization of democracy, i.e., in conducting popular elections, public perception of its performance and function is best understood in the general context of the latter’s evaluation of the state of democracy and perception of the legitimacy of state institutions as a whole.

  • Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    01 September 2023, pp vii-viii

  • Summary

    EXECUTIVE SUMMARY

    • • This report presents findings from a nationwide face-to-face survey of 2,627 Malaysians between March and April 2021 regarding public perceptions on the Election Commission (EC) and on election management.

    • • Malaysians by and large hold a cautious, moderate affirmation of the state of democracy in Malaysia, and of it having made notable progress over the past decade.

    • • A quarter of respondents regard the 2018 general election to be very free or/and fair, while 43 per cent think that it was free/fair though not without problems. This perception appears to have been influenced by the fact that there was a change of federal government.

    • • Public confidence in the integrity and impartiality of the election management process and the EC is weakly affirmative, as revealed by a majority expressing a lack of confidence in an eventual online voting system being handled transparently.

    • • Urban residents generally have greater distrust in state institutions.

    • • Some notable contrasts in regional trends:

      • – Sarawakians have a high level of trust in state institutions.

      • – Sabahans have the lowest appreciation for the progress made in the state of democracy in the country, the lowest satisfaction with civil liberty, or the lowest trust in state institutions except for the Malaysian Anti-Corruption Commission (MACC) and the EC.

      • – West Malaysians have the lowest level of trust in the MACC and EC but express the highest level of appreciation for the progress that have made in the state of democracy.

  • Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Print publication:
    14 November 2021, pp 1-61

  • Summary

    INTRODUCTION

    A lot have been published on the subject of democracy in Malaysia, yet there are few comprehensive survey-based academic studies on how Malaysians view the state of democracy, and, even rarer, in relation to election management and the country’s Election Commission (EC). Welsh (1996) on political attitudes among Malaysians in 1994 was one such study and based on a survey of 400 respondents, while the study by Muhammad Fathi Yusof et al. (2015) on public perception towards the EC is based on a small survey of seven questions among 1,104 respondents in 2014/15. Periodic and systematic international surveys on democracy have been conducted by the Asian Barometer of Democracy surveys, and Malaysia has been included since 2007 during its Second Wave Asian Barometer Survey (ABS). Thus far, three working papers or report with a focus on Malaysia have been produced from the ABS (Welsh, Suffian and Aeria 2007; Welsh Suffian and Aeria 2008;Welsh 2014). Otherwise, outputs from ABS have been in the form of cross-country regional studies among several Asian countries which include Malaysia (Chang, Chu and Welsh 2013, Chu, Welsh and Chang 2013, Huang, Chu and Chang 2013; Ikeda 2013; Lu 2013; Mujani and Liddle 2013; Park 2013; Wang and Tan 2013; Chu and Welsh 2015; Kang and Lee 2018). While cross-country comparative studies are useful in contextualizing political perception in Malaysia within an international context, they do not provide a detailed understanding of Malaysians’ perceptions on the EC and other state institutions, the management of elections, and the state of democracy.

    This report is an analysis of the findings from a nationwide survey conducted with 2,627 respondents between March and April 2021. The objectives are to find out how Malaysian citizens evaluate the performance of the EC in managing elections, perceive the neutrality of the EC, and also how they perceive the state of democracy and of political authorities in the country. As the EC is one of the fundamental institutions in the operationalization of democracy, i.e., in conducting popular elections, public perception of its performance and function is best understood in the general context of the latter’s evaluation of the state of democracy and perception of the legitimacy of state institutions as a whole.

  • Foreword

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Print publication:
    14 November 2021, pp v-vi

  • Summary

    The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

    The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

    The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

    THE EDITORS

    Series Chairman:

    Choi Shing Kwok

    Series Editor:

    Ooi Kee Beng

    Editorial Committee:

    Daljit Singh

    Francis E. Hutchinson

    Norshahril Saat

  • Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia

  • Helen Ting Mu Hung, National University of Malaysia, Andrew Jia Yi Kam, National University of Malaysia
  • Book:
    Public Perceptions of the Election Commission, Election Management and Democracy in Malaysia
    Published by:
    ISEAS–Yusof Ishak Institute
    Print publication:
    14 November 2021, pp vii-viii

  • Summary

    EXECUTIVE SUMMARY

    • • This report presents findings from a nationwide face-to-face survey of 2,627 Malaysians between March and April 2021 regarding public perceptions on the Election Commission (EC) and on election management.

    • • Malaysians by and large hold a cautious, moderate affirmation of the state of democracy in Malaysia, and of it having made notable progress over the past decade.

    • • A quarter of respondents regard the 2018 general election to be very free or/and fair, while 43 per cent think that it was free/fair though not without problems. This perception appears to have been influenced by the fact that there was a change of federal government.

    • • Public confidence in the integrity and impartiality of the election management process and the EC is weakly affirmative, as revealed by a majority expressing a lack of confidence in an eventual online voting system being handled transparently.

    • • Urban residents generally have greater distrust in state institutions.

    • • Some notable contrasts in regional trends:

      • – Sarawakians have a high level of trust in state institutions.

      • – Sabahans have the lowest appreciation for the progress made in the state of democracy in the country, the lowest satisfaction with civil liberty, or the lowest trust in state institutions except for the Malaysian Anti-Corruption Commission (MACC) and the EC.

      • – West Malaysians have the lowest level of trust in the MACC and EC but express the highest level of appreciation for the progress that have made in the state of democracy.

  • 8 - Reassessing Malaysia’s Export Opportunities in the TPP and CPTPP

  • Edited by Cassey Lee, Pritish Bhattacharya
  • Book:
    The Comprehensive and Progressive Agreement for Trans-Pacific Partnership
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    08 October 2021
    Print publication:
    15 January 2021, pp 179-217

  • Summary

    Introduction

    Malaysia's dependence on trade can be attributed to its geographical location and the relatively small size of its domestic economy compared to most of its regional neighbours. The use of foreign direct investment (FDI) as a tool for industrial development has further strengthened this dependence, as a majority of such investments in Malaysia and the region have been used to forge regional production networks for enhancing their cost and efficiency of production. This gave rise to a flow of “back and forth” trade, especially in intermediate goods, leading to a progressive increase in the share of merchandise trade in GDP to a peak of 193 per cent in 2000, before falling steadily to 131 per cent in 2014 (ADB 2015).

    Accessing markets for exports is therefore a critical component of Malaysia's trade policy. For example, although the country's original motivation for joining the Association of Southeast Asian Nations (ASEAN) may have been geopolitical in nature, the economic rationales grew stronger over time, particularly in the wake of the 1973–75 recession in the United Kingdom and the United States. ASEAN's subsequent Free Trade Area, or the ASEAN Free Trade Area (AFTA), promulgated in 1992 was Malaysia's first venture into regional Free Trade Agreements (FTAs). The country is also a member of the ASEAN Economic Community (AEC) that evolved from the AFTA. The AEC was subsequently launched in 2015.

    At the same time, Malaysia became a founding member of the World Trade Organization (WTO) in 1995. However, the protracted negotiations under the Doha Round of the WTO for further multilateral liberalization led to a flurry of bilateral and regional initiatives in Southeast Asia, including Malaysia, as alternative trade liberalization commitments to the WTO. To date, Malaysia has signed and ratified seven bilateral agreements, and is a party to the ASEAN+ agreements with China, Japan, Korea, India, and Australia and New Zealand. It is also in the process of negotiating another four FTAs.

    Malaysia joined the Trans-Pacific Partnership (TPP) in the third round of negotiations in October 2010, and signed the agreement in February 2016 with the other eleven founding members.

  • Exploring the Trade Potential of the DFTZ for Malaysian SMEs

  • Siew Yean Tham, Andrew Kam Jia Yi
  • Book:
    Exploring the Trade Potential of the DFTZ for Malaysian SMEs
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019, pp vii-viii

  • Summary

    EXECUTIVE SUMMARY

  • • Malaysia established the Digital Free Trade Zone (DFTZ) to facilitate the development of e-commerce and the country's small and medium enterprises’ (SMEs’) exports. The data revealed thus far indicates an increasing number of SMEs coming on board the DFTZ e-commerce platforms.

  • • The publicly disclosed data focus on the value of exports achieved but do not show whether these are from new or existing exporters or whether they are re-exports. They also do not highlight Malaysia's imports through the zone.

  • • The overall trend signals that Malaysia is losing its bilateral revealed comparative advantage in exports to China, as well as an increasing use of imports for exporting to China.

  • • While the DFTZ facilitates both exports and imports, differing standards and customs processes in different export destinations, including China, will require Malaysian SMEs to know and understand the standards and customs processes governing imports in each export destination involved.

  • • Imports are also encouraged by the de minimis rule, which allows duty- and tax-free imports of up to RM800 into Malaysia. Overall, imports can help enhance the competitiveness of Malaysian SMEs, expand choices for Malaysian consumers, as well as facilitate re-exports.

  • • A clearer understanding of the role of DFTZ in facilitating trade will require more detailed data collection, and a closer investigation of the imports going through the zone, and their uses.

  • Foreword

  • Siew Yean Tham, Andrew Kam Jia Yi
  • Book:
    Exploring the Trade Potential of the DFTZ for Malaysian SMEs
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019, pp v-vi

  • Summary

    The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

    The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

    The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

    THE EDITORS

    Series Chairman:

    Choi Shing Kwok

    Series Editor:

    Ooi Kee Beng

    Editorial Committee:

    Su-Ann Oh

    Daljit Singh

    Francis E. Hutchinson

    Benjamin Loh

Exploring the Trade Potential of the DFTZ for Malaysian SMEs
  • Siew Yean Tham, Andrew Kam Jia Yi
  • Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019
  • Malaysia established the Digital Free Trade Zone (DFTZ) to facilitate the development of e-commerce and the country's small and medium enterprises' (SMEs') exports. The data revealed thus far indicates an increasing number of SMEs coming on board the DFTZ e-commerce platforms. The publicly disclosed data focus on the value of exports achieved but do not show whether these are from new or existing exporters or whether they are re-exports. They also do not highlight Malaysia's imports through the zone. The overall trend signals that Malaysia is losing its bilateral revealed comparative advantage in exports to China, as well as an increasing use of imports for exporting to China. While the DFTZ facilitates both exports and imports, differing standards and customs processes in different export destinations, including China, will require Malaysian SMEs to know and understand the standards and customs processes governing imports in each export destination involved. Imports are also encouraged by the de minimis rule, which allows duty- and tax-free imports of up to RM800 into Malaysia. Overall, imports can help enhance the competitiveness of Malaysian SMEs, expand choices for Malaysian consumers, as well as facilitate re-exports. A clearer understanding of the role of DFTZ in facilitating trade will require more detailed data collection, and a closer investigation of the imports going through the zone, and their uses.

  • Exploring the Trade Potential of the DFTZ for Malaysian SMEs

  • Siew Yean Tham, Andrew Kam Jia Yi
  • Book:
    Exploring the Trade Potential of the DFTZ for Malaysian SMEs
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    31 January 2020
    Print publication:
    29 January 2019, pp 1-23

  • Summary

    INTRODUCTION

    In traditional international trade, geographical distance can affect trade negatively with trade declining as the distance between two markets increases. The concept of distance was later extended to cover subjective concepts, such as “cultural distance” as well common history, language, legal systems or even institutional dimensions such as trade agreements between trade partners. E-commerce on the other hand, differs from traditional trade in the distance dimension because the Internet is touted to have made the world flatter by reducing the time and transaction costs associated with distance. This has led to claims on the death of distance in international trade, while others deem that the role of distance has merely been reduced.

    Measuring the impact of e-commerce on exports requires a working definition of e-commerce that is quantifiable, and different proxies have been used in different studies and over time. The earlier literature focused mainly on the impact of Internet usage on international trade at the aggregate level. Clarke's cross-country study4 indicates that enterprises that are connected to the Internet, export more than similar enterprises that are not connected. Similarly, at the aggregate level, Freund and Weinhold found that increases in company's websites in a country help to explain export growth in the following year for the fifty-six developed and developing countries that were pooled together in their study. In another study, ICT infrastructure is found to be relevant for the export performance of developing countries, and its impact on exports seems to be more important as a country becomes wealthier.

    At the firm level, the relationship between the Internet and exports may not be so straightforward as it may be conditional. Lu and Julian, in a study covering a sample of 133 Australian firms found that using the Internet can help firms reduce the cost of doing international business besides giving them a competitive advantage over firms without Internet usage. The international experience of a firm is a significant factor in discriminating between high and low export-marketing performance.

    Firm-level studies focusing specifically on SMEs in developed countries indicate that the eBay platform has opened up export markets to SMEs at lower costs for some EU countries. A study of SMEs in the United Kingdom shows that ICT users are 15 per cent more likely to export, ceteris paribus.

  • Southeast Asian Economies: In Search of Sustaining Growth

  • from THE REGION
  • Edited by Daljit Singh, Malcolm Cook
  • Book:
    Southeast Asian Affairs 2017
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    12 January 2018
    Print publication:
    30 March 2017, pp 19-42

  • Summary

    The year 2016 will be remembered for its extraordinary events. It started on a promising note with the signing of the Trans Pacific Partnership (TPP) Agreement in February 2016, after prolonged years of negotiations. This was followed by the unexpected United Kingdom vote in favour of leaving the European Union (Brexit) in June and Donald Trump's stunning victory in the U.S. presidential election in November. The latter event has now cast doubt over whether the TPP will be ratified. In Southeast Asia the death of Thailand's revered King Bhumibol Adulyadej, the world's longest-reigning monarch, in October, also marked another historical moment. China's launching of the Asian Infrastructure Investment Bank (AIIB) in January 2016 signalled a new era in global finance, as the new international bank is perceived to rival the U.S.-led World Bank. All ten economies in Southeast Asia have signed on to be members, although the ratification of Malaysia and the Philippines had not been completed at the time of writing.

    Within the region there have been several changes that may affect its internal cohesiveness, as well as the region's economic and political relations with external powers. These include changes in political leadership in Laos, the Philippines, and Vietnam, while rising tensions over territorial disputes in the South China Sea have strained relations between China and some countries in the region. The signing of the TPP has also been perceived by some members of ASEAN as disruptive to ASEAN integration.

    Amidst such changes, how did the Southeast Asian economies fare in 2016? The main objective of this chapter is to examine the growth of the ten Southeast Asian economies over the year and the main factors that have contributed to this growth. It also discusses the issues that have the potential to affect economic growth of these countries in 2017 and beyond.

    Economic Performance in 2016

    Overall Growth Performance

    Global growth is projected to fall from 2015 to 2016 due to the uncertainties associated with Brexit and the global impact of the U.S. election results of November 2016. Even in the Asia Pacific, the growth rate for the region is forecast to stagnate from 2015 to 2016. Five of the Southeast Asian economies are expected to have slower growth in 2016 compared to 2015 (Table 1).

  • 5 - Outward Foreign Direct Investment from Malaysia

  • Edited by Cassey Lee, Sineenat Sermcheep
  • Book:
    Outward Foreign Direct Investment in ASEAN
    Published by:
    ISEAS–Yusof Ishak Institute
    Published online:
    19 May 2017
    Print publication:
    14 February 2017, pp 103-127

  • Summary

    INTRODUCTION

    Outward foreign direct investment (OFDI) from developing countries has progressively attracted research attention due to its increasing share in world outward flows. According to UNCTAD (2006a), only six developing and transition economies reported outward stocks of more than US$5 billion in 1990. By 2005, 25 developing and transition economies have exceeded that threshold, while contributing to 17 per cent of world outward flows. Malaysia is one of the contributors to this phenomenon. In 1980, Malaysia was ranked 11 in the top 15 developing and transition economies in terms of stocks of OFDI, but it moved up to the tenth position by 2013 (UNCTADSTAT 2014). OFDI in terms of flows surpassed inward flows after 2007, and Malaysia became a net capital exporter.

    These changes inevitably lead to comparisons between OFDI from developed and developing economies. Based on the investment development path (IDP) theory, there are five stages of development whereby a country transits from being a net recipient of investment flows to becoming a net source of foreign direct investment (FDI). The first stage is characterized by little inflows and outflows as the country may not have acquired the necessary location-specific advantages to attract inflows, except for given endowments such as natural resources. The firms in the country are also at a nascent stage of development and therefore do not have as yet the firm-specific advantages and resources for investing abroad. In the second stage, inflows start to emerge with the development of location-specific advantages such as increases in per capita income. By the third stage, however, inward flows may start to decline due to erosion of some location-specific advantages such as low labour costs and the increasing competitiveness of local firms as they move up their learning path and acquire firm-specific advantages. Outward stock of FDI may equal or exceed inward stock by the fourth stage, while in the fifth stage, the net investment position hovers around zero with inward and outward stocks tending to be of the same magnitude.