MCO, political instability caused FDI drop, say economists

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An economist says Malaysia should invest in transport infrastructure. (Bernama pic)PETALING JAYA: Economists agree that political instability and the effects of the movement control order were among the key factors contributing to the huge drop in foreign direct investment last year.Malaysia recorded a 68% decline in FDI to US$2.5 billion in 2020 according to a recently released UN report.“Some factors affected Malaysia more than the region. The MCO had a longer duration, and there was a tighter lockdown compared with much of the region ,” said Vishrut Rana, an economist at S&P Global Ratings.“We see the decline in FDI into Malaysia in 2020 as a sharp, but temporary, cyclical downturn.”Vishrut Rana.Stating that political uncertainty did not play a significant role in affecting investment, Rana said the key factors – policy visibility and continuity – remain favourable in t…