KUALA LUMPUR, Feb 23 (Bernama) -- The government hopes to increase the ratio of domestic investments to foreign direct investments (FDIs) to 60:40 by 2020 with improved business environment, investment policies and other incentives in the country.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said given the uphill challenges in the economic recovery globally, FDIs have been in on the decline.

It is therefore important to raise domestic investments to stimulate the domestic economy, he told reporters after the National Domestic Investment Dialogue & Seminar here Tuesday.

He said the current ratio of domestic investment to FDIs stood at 32:68.

"We have to work hard in order to reach there and it requires a relook of incentives (and) perhaps financing is the other issue," he said.

The 60:40 ratio is in line with the Third Industrial Masterplan (IMP3), which spans over a 15-year period starting from 2006.

"Financing, infrastructure, incentives are among the issues that we need to address to stimulate the domestic investments in the country. We need to tackle it in a comprehensive manner given its importance," he said.

Last year, the country recorded some RM32.6 billion in approved investments for 766 projects in the manufacturing sector, surpassing the IMP3 target of RM27.5 billion a year.

From the total approved investments last year, FDIs accounted for 67.8 per cent or RM22.1 billion and domestic investments made up the balance of RM10.5 billion or 32.2 per cent.

When asked on the government's incentives to expedite the process, Mustapa said the government has been actively improving the business environment through reviewed policies as well as regulation.

He, however, does not expect any new funds or allocation until the next budget.

Earlier, Mustapa chaired a question and answer session which lasted for about a hour and a half, covering issues ranging from financing, foreign labour, intellectual property and other issues faced by entrepreneurs.

The seminar which was organised by the Malaysian Industrial Development Authority (MIDA) and SME Corporation, attracted more than 800 participants comprising members from the public and private sector.

-- BERNAMA