Read the case study below and answer the questions that follow.

Foreign Direct Investment in Malaysia

Foreign Direct investment $($FDI$)$ in Malaysia registered higher net inflow of RM$48.1$ billion in $2021$ as compared to RM$13\mathrm{.}3$ billion in the previous year following a gradual recovery in the global economy from the after effects of the COVID$-19$ pandemic. The increase was mainly driven by higher flows in equity and investment fund shares, In terms of position, FDI climbed to RM$788\mathrm{.}8$ bilion as at end of $2021(2020$: RM$684\mathrm{.}9$ bilion$).$ Meamwhile, investment income rose to RM$101\mathrm{.}0$ billion from RM$43\mathrm{.}8$ billion in $2020.$

Manufacturing sectors were the main contributors for FDI flows in $2021,$ followed by Services and Mining & quarrying sector. The investment in Manufacturing sector was particularly in Electrical, transport equipment and other manufacturing subsector. while Services was largely in Financial & insurance$/$takaful activities. Main country for FDI flows were the United States of America $($USA$),$ Singapore and the United Kingdom.

The FDI position stood at RM$788\mathrm{.}8$ billion as at end of $2021,$ whereby Services was the largest contributor precisely in Financial & insurance$/$takaful and Wholesale & retail trade activities. This was followed Manufacturing sector with Electrical, transport equipment and other manufacturing as the main subsector. Singapore, Hong Kong and Japan remained as the largest investor country for FDI position.

Investment income increased to RM$101\mathrm{.}0$ billion from RM$43\mathrm{.}8$ billion in previous year, due to higher income eamed by foreign companies in Malaysia. Manufacturing and Services were the main sectors$,$ while investors from the USA, Singapore and the Netherlands gained the highest earnings in $2021.$

Foreign Direct Investment in Malaysia, $2001-2021($RM billion$)$

Question $1$

$($a$)$ Explain Foreign Direct Investment in Malaysia and quote $2$ examples $(10$ marks$)$

$($b$)$ Discuss advantages and disadvantages of FDI in Malaysia as host country $(40$ marks$)$