KUALA LUMPUR, Aug 29, 2007 (AFP) - Investors from the Middle East on Wednesday pledged to plow US1.2 billion dollars into a new development region in Malaysia's southern Johor state, the first major foreign investment for the project.
Firms from Gulf Cooperation Council countries will initially invest the money in land and infrastructure development in a deal signed with Malaysia's South Johor Investment Corporation Bhd (SJIC).
SJIC chairman Azman Mokhtar hailed the agreement as a milestone for the new Iskandar Development Region in southern Malaysia.
"This a historic and strategic landmark transaction between our two regions," he said at the signing ceremony. "By far, this is the biggest single foreign investment ever made in Malaysia."
The investors are led Mubadala Development Company, the investment arm of Abu Dhabi, which committed 520 million dollars. The rest of the money is coming from Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, and Abu Dhabi's Millennium Development International Company.
The project will be managed by Abu Dhabi-based developer AldarProperties PJSC.
Malaysia has embarked on an ambitious development plan to spread growth and jobs in Johor state and turn the area into a new Asian metropolis.
Prime Minister Abdullah Ahmad Badawi hopes to attract 50 billion ringgit (14.2 billion dollars) to the Iskandar Development Region over five years.
But analysts have said Malaysia will struggle to lure the dollars away from other nearby growing economies like Thailand, Vietnam, India and China.
Malaysia, Southeast Asia's third largest economy, has seen foreign direct investment steadily declining. In 2006 it amounted to an estimated 3.9 billion dollars, compared to 5.5 billion dollars in 2001. - AFP
