KUALA LUMPUR: The government aims to raise the proportion of domestic private investment (DPI) to 60% of total investment by 2020 from the 32% recorded last year, reducing dependency on foreign direct investment (FDI), said the Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.

He said under the Third Industrial Master Plan (IMP3), domestic private investment would act as a key engine of growth boosted by a comprehensive business environment, investment policies and other incentives.

"It does not mean we don't want FDI, it's still important," he said at a press conference after officiating at the National Domestic Investment Dialogue and Seminar here today.

Mustapa said as of last year, the total approved investment for the manufacturing sector amounted to RM32.6 billion, with a 32:68 ratio between domestic private investment and FDI. Domestic investments accounted for RM10.5 billion while FDIs stood at RM22.1 billion.

Mustapa said issues such as financing, infrastructure and other incentives would be addressed in a comprehensive manner, as it was important to raise the percentage of domestic private investment, especially through the services sector.

He said the targeted growth areas within the services sector included green technology, tourism, medical and aerospace maintenance, repair and overhaul (MRO). "The potential growth of the aerospace MRO is 12% to 15% annually," he added.

On whether the government planned to offer more incentives to SMEs, Mustapa said: "We will constantly engage with the Treasury to have adequate funds for the implementation of our (SME) programmes."

The National Domestic Investment Dialogue and Seminar, organised by the Malaysian Industrial Development Authority (Mida) and SME Corp attracted more than 800 participants from the private and public sectors. During the dialogue session between participants and representatives from government agencies, questions and complaints heard centred around the need for foreign workers, intellectual property rights and financing.

Many participants from SME sectors argued that the approval process from SME Bank for funding was slow, adding that rejection of loan applications by the bank was mostly due to the lack of experts in the decision-making process.

Mustapa revealed that he had heard similar complaints from various parties and said he would meet Bank Negara Malaysia officials to address these issues as they could affect the government's move to stimulate the domestic investment.

"It was also raised during last week's National SME Development Council meeting chaired by the prime minister," he added. He also said that the government would make domestic private investment a key driver of the 10th Malaysia Plan, which was in the midst of being prepared.