INVEST Penang is positive that the state will be able to achieve its target of attracting investments worth RM5 billion for 2021 if travel restrictions are lifted within the first quarter of the year, said its executive director Lee Kah Choon.

The special investment adviser to the Penang chief minister said the lockdown has become a hindrance for due diligence work that is necessary for new investments.

“The lockdown of borders has curtailed physical due diligence works on the ground for new investments. However, we are doing the preliminaries while waiting for the movement-control order (MCO) to be lifted,” he told The Malaysian Insight.

The state is currently focusing on facilitating reinvestments and expansion by existing investors.

“This area is very encouraging,” he said.

Penang has been under the MCO since January 14, which has now been extended until March 4. This second MCO has more relaxed conditions on eating out and allows almost all economic sectors to operate, but still prohibits inter-state and inter-district travel.

Lee said the Covid-19 pandemic has changed the way business is conducted, created new growth areas and eliminated obsolete technologies.

“The new norm will definitely change the foreign direct investment (FDI) flow, how manufacturing is to be done and what goods will be in demand. There will definitely be shake up in the industries,” he added.

Asked if better economic prospects can be expected after the roll out of the nationwide vaccination programme, Lee said recovery will be gradual as it takes time to achieve herd immunity.

“The overall growth will be gradual but some sectors may recover steeply due to pent up demand,” he said.

According to the Malaysian Investment Development Authority (MIDA), Penang had generated RM10.6 billion in approved manufacturing investment in the first nine months of 2020, while various phases of movement curbs were being implemented.

Of the RM10.6 billion total, RM1.5 billion in approved investments came in the third quarter alone.

FDIs accounted for 83% of the RM10.6 billion, while domestic direct investment for the period under review totalled RM1.1 billion.

This made Penang the second largest contributor to FDI in the country, accounting for 22% of Malaysia’s total.

In 2019, the state recorded an all-time high in investments of RM16.9 billion. – February 20, 2021.