Malaysia offers substantial opportunities to investors, particularly in the energy and high-end manufacturing sectors, according to Maplecroft. The country boasts high quality infrastructure and a largely pro-investment business environment.
"Nonetheless, challenges to rule of law – such as political interference over the judiciary and corruption – as well as racially discriminatory policies present significant impediments for investors," says Maplecroft in its summary on the latest Country Risk Report for Malaysia .
Despite a slowdown of economic growth in 2013, Malaysia’s long-term economic potential remains strong. However, the report points out that Malaysia will still need to diversify its economy to ensure long-term stability. Much of the country’s growth over the past five years has stemmed from favourable demand for hydrocarbons and agricultural commodities such as palm oil.
Implementation of international labour standards remains poor, presenting reputational risks to investors, according to Maplecroft. Ethnic minorities experience entrenched societal discrimination, such as barriers to accessing education, employment, social welfare, land ownership and business permits.