KULIM, Aug 27 (Bernama) -- The Ministry of International Trade and Industry (MITI) faces a daunting task in trying to achieve a 50:50 ratio between foreign direct investment (FDI) and domestic direct investment (DD1) with the former still flowing into the country.

Its Deputy Minister, Datuk Mukhriz Tun Dr Mahathir said the challenge to get more local investment is not in the numbers, but more on the ratio.

"We are trying to achieve a 50-50 ratio betwen FDI and DDI. Its gets difficult when the amount of FDI is still coming in..its not slowing down.

"Domestic investment needs to catch up. This is the challenge.

"With the Economic Transformation Programme to stimulate economy, we are trying to make it exciting for local companies to invest.

"If before they saw very little excitement in our economy..now they say a lot of things are happening.

"Its not only about infrastructure but also other initiatives that make it interesting and exciting for them to stay put instead of investing overseas," he told reporters after Intel Malaysia's Aidilfitri Festive Cheer 2011 Programme at Intel Technology Sdn Bhd here last night.

Mukhriz said the government would like to also see joint ventures between FDI and DDI.

"When there is an economic crisis, it brings uncertainty in overseas markets and in situations such as in Japan which underwent a natural calamity. This is an opportune time for companies with very good technology to consider coming to Malaysia and entering into joint ventures with local outfits.

"That's the way to mitigate their risk in these kind of situations. Furthermore, specific sectors such as automotive, electronic and electrical, oil and gas have already established themselves in Malaysia.

"The companies need not start from scratch and can enter into joint ventures with the local companies," he added.

He said the ratio between FDI and DDI is 70:30 at present and moving towards 60-40 and as part of the plan to make it 50:50, the government cannot differentiate between local and foreign companies.

"The same incentives given to foreign companies should be given to local companies as well. We cannot discriminate.With the ETP, there are more opportunities for local companies to participate," he added.

On the FDI to the northern region especially Kedah and Penang, Mukhriz said its been quite encouraging and both states are still getting investments, especially in the electronic and electrical sectors, which has always been Malaysia's strength.

"Investments are coming from all over. One of the major issues is the uncertainty that comes with the global economic crisis.

"In order to mitigate this, we try to engage as much as possible with prospective investors, and take them through their concerns.

"So, by the time they are in a position to make a decision, they are quite certain about what they are getting into," he added.

-- BERNAMA