September 30, 2020

Malaysia is one of Asia’s most promising economies. Backed by a trade policy open to cross-border commerce and investment, Malaysia’s development has seen the virtual elimination of absolute poverty and a wide-scale fulfilment of the Millennium Development Goals – the precursor to the SDGs.

Malaysia Presents USD35 Billion Opportunity to Invest

Malaysia Presents USD35 Billion Opportunity to Invest

The Standard Chartered SDG Investment Map – Opportunity2030 reveals an almost USD10 trillion (USD9.668 trillion) opportunity for private-sector investors across all emerging markets to help achieve the UN’s Sustainable Development Goals (SDGs), with Malaysia representing USD35 billion of that total.

Opportunity2030 Malaysia

In Malaysia, the greatest SDG opportunity is found in SDG 9, which encourages improvement in industry, innovation and infrastructure. Opportunity2030 finds that to significantly improve Malaysia’s transport infrastructure by 2030, an estimated USD73.7 billion is required, with an opportunity for the private sector to provide USD25.8 billion of the funding. This need represents 71 per cent of the overall investment opportunity for Malaysia.

The second-largest opportunity for private sector investors is in improving Malaysia’s digital adoption levels, also an indicator of SDG 9. Securing full digital adoption in Malaysia – a combination of mobile phone subscription rates and internet connectivity – would require private-sector investment of around USD8.8bn.

Malaysia already has universal access to power so the investment opportunity to achieve this is not included in the country’s total investment opportunity figure. However, with a growing economy, there will be an additional need for continual investment in affordable and clean energy to maintain access in a sustainable way.

Transport reform has been a major policy initiative in Malaysia in recent years. With rural-urban migration on the rise and city centres increasingly congested, the government has sought to relieve the demographic pressure through projects like the Klang Valley Mass Rapid Transit system.
 
There is also a significant investment opportunity in achieving and maintaining universal digital access, which will require a total cash injection of USD14.7 billion, with potential private-sector investment of USD8.8 billion. Malaysia’s successes in achieving the Millennium Development Goals have largely closed the gap for clean water and sanitation.
 
However, with a further two percentage points to go, and to maintain existing performance, a total investment of USD3.9 billion is still needed, with a private-sector investment opportunity of USD0.4 billion by 2030.
A delicate mixture of agriculture, industrial innovation and central management is enabling Malaysia to escape the middle-income trap and become an increasingly attractive destination for foreign capital.
 
The Malaysian Prime Minister re-stated the government’s commitment to the SDGs at the recent Malaysia Sustainable Development Goals Summit held in Kuala Lumpur. Inclusive development is to become a core feature of Malaysia’s economic policy approach, with the government’s Shared Prosperity Vision 2030 aimed specifically at bridging the gap between rich and poor and delivering a truly inclusive growth process.
In order to meet the SDGs, the Malaysian Economic Affairs Ministry has placed a considerable emphasis on private-sector involvement. Senior figures have pointed to the funding gap in justifying new fiscal incentives designed to induce private contributions.
 
The Malaysia Development Bank, for example, established the Sustainable Development Financing Fund (SDFF) in early 2019 to enhance entrepreneurial solutions to development from the non-state sector.
 
Armed with an original capitalisation of more than USD242 million, the SDFF’s holdings were doubled in the recent 2020 Budget and its remit narrowed to focus on sustainable and green-energy initiatives.
CEO Standard Chartered

Abrar  A.   Anwar,  Managing   Director   and Chief Executive Officer of  Standard Chartered Malaysia says “As a relatively advanced economy with strong growth prospects, Malaysia is as an attractive place for investors. The government is committed to the UN Sustainable Development Goals through their Shared Prosperity Vision 2030 and has spoken of its emphasis on private-sector participation in order to achieve the SDGs.”

Opportunity2030: The Standard Chartered SDG Investment Map is a macroeconomic study that draws on global data sources and indicative private-sector participation rates to provide companies, institutional investors and other stakeholders with an overview of where their investments could have the greatest impact. It spans 15 of the world’s fastest-growing economies and estimates the potential private-sector investment opportunity to contribute to three of the most investment-ready SDGs (6,7 and 9). Within these SDGs, it focuses on four indicators:

  • water and sanitation services;
  • power;
  • telecoms (digital access);
  • transport infrastructure.

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