ABSTRACT
The development of Malaysia as an emerging economy, after attaining independence in 1957, has been heavily dependent on trade and foreign direct investment (FDI). Guided by continuous policy adjustments and strategy refinements over time according to changing needs and the economic environment, FDI channeled primarily through multinational corporations (MNCs) has contributed significantly to economic growth and the achievement of Malaysia’s social goals by most standards of development. From an exporter of primary commodities and importer of consumer goods, Malaysia has become a manufacturer and exporter of final and intermediate industrial products with the help of foreign capital inflows. MNCs developed production capacity, introduced technology, opened markets, and created jobs. During the past decade, the services sector has also expanded with FDI support. In addition to MNCs from industrial economies, MNCs from newly industrializing economies (NIEs) in Asia have come onto the scene. The ASEAN (Association of Southeast Asian Nations) Free Trade Agreement may expand to include other East Asian economies; Malaysia then would see more traders and investors in the enlarged regional market. There have been some in the country who have pointed to the negatives of MNCs, such as limited technology transfer, while others fear being overdependent on foreign firms.
