It is no surprise that we have long aspired to move beyond our image as a nation for low cost labour and transform into a more dynamic, investment-friendly economy. To that end, it is encouraging to see the increase in net FDI inflows in the first quarter of 2025 -- a two-year high and more than double the figure from the same period last year.
Especially following a period of political uncertainty and economic turbulence, this increase is a welcome sign of hopefully renewed international confidence in the nation.
However, once we delve deeper, it is clear that there is more to this increase; the bulk of the recent FDI increase has come in the form of intra-company loans; while such capital injections are vital for sustaining business activity, they seldom align with true engines of national development.
Indeed, when it comes to long-term commitment to our, our FDI numbers remain woeful. What is cause for further concern is that reinvested earnings have actually declined year-on-year. All of this means that our FDI as a share of GDP remains subpar compared to our regional peers.
We have often stated that FDI must become a cornerstone of our nation-building efforts, and as things stand, we are simply failing on this front. Short-term surges in FDI therefore may be encouraging but in the long run are inadequate.
We have no choice but to redouble our efforts to create a truly enabling environment for investors if we are serious about our economic ambitions as a nation. At the very least, this means addressing infrastructure gaps and fostering a culture of transparency and good governance to increase investor confidence.
It is only through bold reforms and focus on long-term prosperity will we be in a position to attract the quality of investment that will drive sustainable growth, create meaningful jobs, and help our country fulfil its potential and make real progress.
