MITI Shifts To New Framework To Ensure Local Products Usage Benefit Domestic Economy

KUALA LUMPUR, Feb 4 (Bernama) -- The Investment, Trade and Industry Ministry (MITI) will focus on outcome-based measurement and monitoring under the New Incentive Framework (NIF) to ensure that investment projects using local content translate into real impact on the domestic economy.

Its Deputy Minister Sim Tze Tzin said the new approach is aimed at ensuring that commitments to use local products in investment projects — whether foreign (FI) or domestic investments (DI) — are no longer merely declarative in nature.

According to him, measuring the actual level of local content usage is currently done via a specific framework that combines quantitative and qualitative indicators, including the percentage of local sourcing for raw materials, components, machinery, and services.

“Additionally, the level of local companies’ involvement, including small and medium enterprises in the supply chain, is also a key indicator in assessing the degree of economic spillover domestic industries enjoyed from investments.

“The government also evaluates the percentage of local employment created, including aspects of skills upgrading and training, as part of the indicators for monitoring local content,” he said during the oral question-and-answer session in the Dewan Rakyat here today.

He was responding to a supplementary question from Wong Shu Qi (PH–Kluang), who sought clarification on the government’s measures to assess the actual level of local content usage in FI and DI investment projects.

Sim also said implementation progress of vendor development programmes, as well as efforts to transfer knowledge from investing companies to local firms, are also monitored in stages.

“All these indicators are assessed according to sectors, scale of investment, and level of industry maturity to ensure a more realistic and pragmatic evaluation.

“Monitoring is carried out at two main stages, during the pre-approval and post-approval phases of investment, with investment projects continuously monitored to assess the progress of the commitments,” he added.

For the post-approval stage, the government conducts continuous engagement sessions with investors and local vendors to ensure that the implementation of local content usage genuinely takes place throughout the investment period, he said.

Overall, he said the more structured and meticulous new policy approach aims to ensure that local companies and industries benefit from investments.

-- BERNAMA