KUALA LUMPUR, July 26 – The Ministry of International Trade and Industry (Miti) today remained confident it can reach the government’s target of RM115 billion in private investment annually until 2015 despite falling foreign direct investment (FDI).

Malaysia needs to get that much to achieve its target of growing investment by 12.8 per cent a year, according to the Tenth Malaysia Plan (10MP). Investments grew only two per cent on average between

2006-2010.

“RM115 [billion] may be a high projection but we have to set our targets high so that we work harder. And we will work hard,” Miti minister Datuk Seri Mustapa Mohamed (pic) said after meeting with 32 Malaysia-based business councils here.

He said Prime Minister Datuk Seri Najib Razak has already laid the foundation for this through his Government Transformation Plan (GTP).

“These are all preparations to ensure that Malaysia offers a strong investment climate for increased investments,” he said.

However, Mustapa was cagey when asked about Malaysia’s sluggish FDI rates.

“I’m working on it,” he said.

“I just read it in detail this morning so I can’t give rushed comments.”

Nonetheless, he remained “optimistic” about Malaysia’s ability to achieve six per cent annual GDP growth as set out in the 10MP.

Najib has come under fire from opposition parties for Malaysia’s lacklustre FDI rates, which have fallen faster than regional counterparts such as Singapore and China even while capital outflows dampened private domestic investment.

The World Foreign Investment Report (WIR) 2010 released by the United Nations showed that the once-roaring Asian Tiger’s FDI plunged 81 per cent last year, going below even the Philippines — long considered Southeast Asia’s basket case economy.

The report revealed that Malaysia suffered a large 81.1 per cent drop in FDIs compared to far healthier figures in Thailand (30.4 per cent), Vietnam (44.1 per cent) and Indonesia (44.7 per cent).

In May, Mustapa announced that investments in the country for Q1 2010 amounted to RM5.2 billion.

FDIs made up RM3.2 billion of this total, with Singapore, Taiwan and Japan being the biggest contributors.

Mustapa said the investment amount was still relatively low against the total amount of RM32.6 billion in investments received last year.

Najib has been trying to lift Malaysia’s profile as a destination for foreign investment to help the country achieve an average GDP growth of at least six per cent per annum over the next five years.

However, his administration has insisted that the GDP growth target is still achievable despite warning that the economy may slow down in the second half of the year due to external factors.