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50 Years of Merdeka: Past and Future — A Reflection

The nation achieved independence in 1957 at the same time as Ghana, when both countries were almost on par economically. Both countries are celebrating their golden jubilee of national independence this year, but Ghana is a failure in economic development, with its per capita income only about one-tenth that of Malaysia.

Should Malaysia feel proud that we are now ten times better off than Ghana, as had been suggested by a Barisan Nasional MP in Parliament?

This depends on whether we want to compare with the best or with the worst. There is no point in talking about” excellence, glory and distinction” if we are only proud to be compared with failed states and not prepared to compete with our equals or betters.

Malaysia was No. 2 in Asia after Japan in terms of prosperity and income when it achieved independence in 1957, despite having a per capita income of only US$200 per year. However, South Korea, Taiwan, Hong Kong and Singapore have caught up with us and gone ahead.

Although Malaysia’s per capita GNP had started to trail behind Hong Kong and Singapore in the first decade after independence, we were still ahead of South Korea and Taiwan. Malaysia’s per capita GNP in 1967 stood at US$290 as compared to Taiwan’s US$250 and South Korea’s US$160.

In 1967, Singapore’s per capita GNP was US$600 while Hong Kong US$620.

In the past four decades, South Korea’s per capita income multiplied about a hundred-fold, Taiwan by some 60-fold, Singapore by 45-fold, Hong Kong by some 40-fold with Malaysia lagging with an increase of only some 17 fold.

The brain drain of over a million talented, creative and enterprising Malaysians in the past four decades as a result of the New Economic Policy must bear primary responsibility for Malaysia trailing so behind Singapore, Hong Kong, Taiwan and South Korea.

Let us not indulge in any finger-pointing exercise but let us own up to our mistakes and have the courage to correct them in the best interests of the nation and future generations. Continue reading “50 Years of Merdeka: Past and Future — A Reflection”

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DBKL high-handed policy

by “Angry Housing Developer”

What I am going to relate did happened and if you are doubtful you may check with other developers from the Klang valley who were called to attend a meeting at DBKL on 31st July 2007.

The meeting was for the purpose of releasing the overdue bumiputra quotas of houses which had remained unsold after having complied more than once the stipulated conditions of DBKL.

All the developers who attended the meeting had already complied with the conditions of publishing in the major newspapers for sale of bumiputra units and in addition we were told to book a space in Mid Valley or a designated place for further campaign to sell the bumi units.

The above exercise does not come cheap. Advertising space in the major papers and rental of space at Mid Valley cost us close to RM20,000. Can you imagine our frustration when we were told to repeat the whole exercise when we could not sell the bumi units.

In exasperation I told the DBKL officials that even if we were to give 20% discount to the Malays they would not buy our houses because it was located in Salak South, Sg Besi, an exclusive middle class enclave of the urban Chinese. Nearby there is a market selling pork and a Chinese school. Also in the vicinity is a food court selling non halal food. So would any Malays want to buy them? No said the official, “You have to advertise in the papers again and do the campaign at Mid Valley again” without any compromise.

We are a small housing developer and the total units built was 40 and the bumi allocation was 12. At RM420,000 per unit an amount close to RM5 million was tied down to the project. No wonder alot of small companies were forced to abandon their projects. We had complied with all the stipulated conditions and now after more than a year of waiting DBKL still did not want to release the units to be sold to non bumis. Continue reading “DBKL high-handed policy”

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Slaying an Immortal Tiger: Malaysia’s New Economic Policy

by Azly Rahman

The New Economic Policy (NEP) owes it genesis to a vision that sought to redistribute wealth among Malaysia’s races and create a Malay middle class. Today, there are a significant number who believe that most of the benefits have gone to upper and upper-middle class Malays. As a whole, a vast swath of the Malaysian middle-classes remain relatively poor. It is the urban lifestyle has brought this group to such a level – like America’s middle-class, they are riddled with credit card debt and face rising costs of living.

The NEP created the country’s own Rockefellars, Vanderbilts, and Carnegies (dynasties of the ‘old money’), as it continues to create its own versions of Bill Gates, Rupert Murdoch, and Warren Buffet (newer dynasties of ‘new money’). In tandem, there are a growing number of millionaire Chinese and Indians that have benefited from the truncated structure of the NEP.

The NEP has also overseen the growth of a larger class of poor across all ethnic groups too, with Malaysia witnessing the rapid growth of an urban poor who live below the poverty line. Hypermodernity and rapid industrialisation, in the hunt for huge profits through expensive real estate projects have also engendered waves of immigration from Indonesia and Bangladesh, adding to the complex social dynamic in Malaysia’s urban centres.

The NEP was quite ill conceived to begin with, although in fairness, it was not meant to continue indefinitely unlike what one observes today. It was premised upon the principles of ethnic segregation and a leg-up for the most disenfranchised community – the majority Malay-Muslim population. A noble policy then, affirmative action was also the dominant philosophy of human development in the 1960s and 70s.

Today, the NEP can hardly be appended to noble intentions. The only Indian and Chinese individuals that continue to support it are either found in political parties that are aligned to the ruling coalition, the Barisan Nasional or to those Chinese and Indians who rely on government patronage for contracts and tenders. Continue reading “Slaying an Immortal Tiger: Malaysia’s New Economic Policy”

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NEP – about time the government wakes up

AY forwards an incisive critique of the NEP in the wake of the ruckus over EC Ambassador to Malaysia, Thierry Rommel’s public spat on NEP (reproduced below) ending with this very perceptive observation:

“I tell my clients that in Singapore, everything from education to jobs to business and government contracts, we have to compete with the rest of the world. In Malaysia, the Malay only needs to be better than other Malays.”

I refer to the malaysiakini report EU envoy summoned to explain NEP criticism. After reading the comments made by the European Commission’s top envoy to Malaysia, I cannot help but put my two cents worth into the fray.

I have worked and lived in Malaysia and am well accustomed to its social fabric and political system. As a foreigner, I have a better understanding than Westerners on this issue because I speak Bahasa Malaysia and have been exposed to Malay culture and traditions from young. Still, I am perplexed by the NEP and its predictable ills especially coming from an environment where meritocracy is, to a small extent, worshiped.

Essentially, all societies are unequal in some form or other but few in the developing world would attempt to make more equal by legislating a heavy-handed unequal-ness. This is what Malaysia has done. The extreme of this ideology has to be Mugabe’s confiscation of white-owned farm lands in Zimbabwe.

To me and others who swear by free competition, the NEP is flawed from its conception in 1970. What baffles me is that the Malay political elite remains adamant that a redistribution of wealth via such means is the one and only solution.

In my dealings with the Malaysian government, I have learnt that there is a feeling of ‘entitlement’ among Malays that makes for a curious insight. Continue reading “NEP – about time the government wakes up”

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NEP not a global-friendly policy

by Dr. Chen Man Hin

    THE NEP IS NOT GLOBAL FRIENDLY AND HAS CAUSED FOREIGN INVESTORS TO AVOID MALAYSIA AS A PLACE FOR INVESTMENT

The NEP has been under attack by many foreign investors the latest critic was Thierry Rommel, a top envoy from the European Union, who commented that trade relations with Malaysia has been hampered by its policy of bumiputraism which is racial and not acceptable by global standards.

What Rommel said was embodied in a 34 page European Commission report titled Malaysia-European Community Strategy Paper for the Period 2007-2013 which stated “Crucial policies are an open stance towards FDI, not least in the services sector which needs to be opened up; human capital development , innovation and research capabilities; more competition and less interference of government-enforced Bumiputra–related concerns in the functioning of markets.”

It is not only the European Union that is critical. The US Department of State also stated “one source of impediments to Malaysia’s economic growth is its complex network of racial preferences to promote the acquisition of economic assets by ethnic Malays (bumiputra). The public aim of these programs is to encourage a more even distribution of wealth among races. despite th stated goal of poverty alleviation, these raced based policies.. in practice wealthy and well-connected bumiputera receive the lion’s share of the benefits. The resulting economic distortions in the property, labor and stock markets inhibit growth and deter both foreign and domestic investment.”

The world opinion of NEP is negative and is shown by statistics of FDI inflows into Malaysia and other countries. Continue reading “NEP not a global-friendly policy”

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If not for people like Rommel, South Africa would still have Apartheid

by Richard Teo

South Africa would still continue to practise Apartheid if the international community had taken heed of DPM advice that outside parties should “not meddle in the affairs and domestic policies of the country”.Yet it was pressure from the international community which viewed apartheid with such revulsion that it eventually led to the downfall and dismantling of South Africa’s racist policies.

Yet in the same breath it was business as usual for our DPM and the P.M himself to offer unsolicited advice as to how southern Thailand should be governed in order to quell the daily violence. Not only were advice given unsparingly but it was open govt policy to provide sanctuary for Muslim militants who seem to have unhindered access to Malaysian borders.

Our leaders are always in a denial mode whenever there are legitimate criticisms levied at our govt or our policies while at the same time feeling they have a divine right to pinpoint the inadequacies of other less unfortunate countries.

Datuk Hishammuddin Hussein should learn to control his temperament and avoid making foolish statements that foreigners should not interfere in govt business without first knowing its history.

In this globalised, flat world we are living now no country can live in isolation and this borderless world will continue to invite criticisms if policies and governance are not in accordance with norms. Continue reading “If not for people like Rommel, South Africa would still have Apartheid”

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Urgent parliamentary debate on EU Ambassador’s critical speech on NEP, productivity and competitiveness

I have given notice to the Speaker, Tan Sri Ramli Ngah to move a motion of urgent definite public importance on Wednesday on the controversial speech by the European Commission Ambassador to Malaysia Thierry Rommel critical of the New Economic Policy and the country’s declining FDIs and competitiveness.

The motion I have submitted is as follows:

“That under Standing Order 18(1), the House gives leave to Ketua Pembangkang YB Lim Kit Siang to move a motion of urgent definite public importance, viz: the speech by European Commission Ambassador to Malaysia Thierry Rommel critical of the New Economic Policy (NEP) and the country’s productivity and competitiveness losing out in foreign direct investment.

“Last Thursday, speaking at the EUMCCI luncheon talk of local and foreign businessmen, Rommel said the NEP was discriminatory and amounted to protectionism against foreign companies.

“He added that the Government was using the NEP as an excuse to practise ‘significant protectionism of its own market,’ including the automotive sector, steel, consumer goods, agricultural products, services and government contracts.

“In his speech, Rommel also gave a ‘factual, non-emotional’ six-point critique of Malaysia’s productivity and competitiveness, viz:

  • human capital development and the public education system;
  • the public service delivery system;
  • transparency and predictability in the ‘rules of the game’ concerning government regulations, decisions affecting business, public procurement;
  • corruption;
  • the rule of law to everyone; and
  • security – physical, administrative and legal.

“The Deputy Prime Minister, the Education Minister and the Foreign Minister have accused Rommel of meddling in the internal affairs of the country and of being ‘arrogant’ and having ‘overstepped his authority’.

“Although the Deputy Prime Minister said Rommel’s speech was ‘factually disputable’, this has not been done. What does the government propose to do if Rommel can factually back up his criticisms when summoned to explain his speech?

“It is more important for Malaysia’s international image as a democratic and progressive country prepared to face the challenges of globalization that Rommel’s speech should be openly disputed than to shut him up.

“Parliament should have an urgent debate to show the world that the nation and government is prepared to face criticism.”

Continue reading “Urgent parliamentary debate on EU Ambassador’s critical speech on NEP, productivity and competitiveness”

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Withdrawal of Maybank 50% bumi rule – first Ijok effect but tactical retreat or strategic decision?

I am not surprised by the Cabinet decision yesterday directing Maybank to withdraw its discriminatory ruling that law firms must have a bumiputra partner with at least 50% stake before they could qualify to be on its legal panel as this is the outcome of the first “Ijok effect”.

Although the Barisan Nasional (BN) had won the recent Ijok by-election in Selangor with BN trumpeting it as a great victory, BN leaders know that it is a pyrrhic victory won at too great a cost in money, manpower and machinery and which is not sustainable in a general election.

This is why the Prime Minister, Datuk Seri Abdullah Ahmad Badawi had asked MCA and Gerakan to explain the reason for the swing of Chinese voters to the Opposition in Ijok, although he and other top Umno leaders have equal reason to worry about Umno failure to make a significant dent in the Malay ground despite humongous expenditures of money, manpower and machinery which made a total mockery of laws to prevent money politics in elections and Abdullah’s pledge to uphold integrity and fight corruption.

However, many questions await answer, including: Continue reading “Withdrawal of Maybank 50% bumi rule – first Ijok effect but tactical retreat or strategic decision?”

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Maybanks’ legal panel – what is the truth?

by I Bernadette

First, my ethnicity is irrelevant — and I am not defending MayBank or/and its policies.

The fact that racial discrimination has been ‘cast in stone’ so to speak, into policies of organizations like MayBank, is nothing new. In Malaysia, corporations linked to the Government and not just MayBank have fine-tuned the art of racial discrimination to a heart beat.

What is new in the case of MayBank in its latest ruling is that it would appear to be encroaching on the principle of free speech as protected by our Federal Constitution of 1957 — asking that law firms hoping to deal with it be first majority-owned by a certain class of Malaysians based on race. What right has MayBank got to go around telling private individuals who go into business as partners, how profits on their earnings are supposed to be distributed among them, what equity participation they should have in their private ventures and what internal policies they should or should not follow? Isn’t this the responsibility of private individuals as free citizens?

But at least MayBank has been forthright on the issue by making public its policy. Others are less so if they ever do. Apparently it arises out of MayBank’s genuine desire to comply with what after all is government policy.

Since the issue is one basically of racial discrimination against certain categories of lawyers based on race, in favor of one class of Malaysians vis-à-vis the others, one cannot be faulted for asking whether the proper forum ought not to be the country’s legislative body responsible for such laws i.e. Parliament and not MayBank.

Consider this. For a law firm looking to do work for a bank even on an ad hoc basis, the partners would have to work hard — ‘working hard’ means in most cases many hours on the golf fields at prestigious clubs scattered not only all over the country but overseas with its team of ‘enablers’ if you will where business deals are made. This acts to automatically exclude most of the small to medium law firms with their limited resources, limited experience (on the golf fields rather than in any field) and limited track record as a firm because they are new and the partners are young. Continue reading “Maybanks’ legal panel – what is the truth?”

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Freeze new Maybank bumi ruling until EPU methodology on ethnic equity ownership made public

Although Maybank Bhd has said that it will review its new ruling that with effect from 1-7-2007, one of the criteria for legal firms to be on its panel is that 50% of the equity of the partnership of the legal firm must be held by Bumiputras, its statement is ambivalent and unsatisfactory.

This is because the Maybank statement seems to imply two things:

  • firstly, that existing legal firms which are already on the Maybank panel, and which had been given one year to comply with the new ruling, may now be exempted from the 50% bumiputra partnership ruling;
  • secondly, that for all practical purposes, new legal firms will have to comply with the 50% bumiputra partnership ruling if they are to be emplaced on the bank’s panel.

In keeping with the principles of CSR (corporate social responsibility), Maybank Bhd should not speak in ambiguities but must make clear its policies and guidelines. For this reason, Maybank should clearly explain whether the 50% bumiputra partnership ruling for its panel lawyers will come into force on 1st July 2007 and how it will impact separately on its existing panel lawyers and new firms.

The controversy raised by the Maybank ruling, whether on the blogosphere or among the Malaysian public, have highlighted one important issue — that the few law firms doing good business with the government, statutory bodies or public listed companies with large government holdings are the politically connected ones, which is a more important consideration than whether they are bumiputra owned and operated or with substantial bumi equity.

Or as one poster on my blog put it: “In many of the cases if there is a bumiputra partner he’s probably a retired government servant or a stay-at-home mom who lends their names for a few bucks every month”.

I call on Maybank to be a model of CSR and make public the top 25 legal firms on its panel which have been given the most bank business each year for the past 10 years. This is to allow Malaysians to judge whether the criteria for legal firms on its panel who are given the most Maybank business are the politically-connected ones rather than based on meritocracy or other critera. Continue reading “Freeze new Maybank bumi ruling until EPU methodology on ethnic equity ownership made public”

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What else does the govt want from us?

What else does the Govt want from Us?
by Richard Teo

On the same day when it was reported that two major banks “require law firms to have a minimum of three partners of which one must be Bumiputra with a minimum 50 per cent stake in the firm before they can do any business with the banks” another report in Singapore says “Job ads in the city: No age, race.”

Two different emphasis on policy matters, one from our close neighbour Singapore and one from our own virtually sums up the two different directions we are heading.

After 50 years of being in power our leaders are still promulgating laws and policies which are dividing the nation while in Singapore, the rationale is to eliminate race as a criterion to select candidates for jobs believing in the concept that “multi-racialism is a fundamental principle here”.

How divergent and different each nation’s path has become.One will lead the nation to ultimate destruction whilst the other will grow and prosper.

How can our leaders be so myopic and parochial? Why must it always be the Malays vs Chinese thing? Can’t they adopt a more pragmatic view that the Chinese are not their enemies and that we are all sitting in the same boat. If this boat sinks we sink together. Continue reading “What else does the govt want from us?”

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Scrap Maybank ruling on 50% bumi partnership for law firms on its panel – unacceptable NEP extension

The Prime Minister, Datuk Seri Abdullah Ahmad Badawi should scrap the inequitable and unacceptable Maybank extension of the New Economic Policy (NEP) by requiring law firms on its panel to have at least 50 per cent bumiputra partnership.

Maybank has imposed the rule that with effect from 1-7-2007, one of the criteria for legal firms to be on its panel is that 50% of the equity of the partnership of the legal firm must be held by Bumiputras. For legal firms which are already on the Maybank panel, they have a year to comply with the new ruling.

Maybank, a government-linked company, has justified the new ruling on the ground that Malaysia was working towards improving the quality of service industries including the legal profession to face the challenges of globalization.

But this is a most unconvincing ground for the new Maybank ruling has nothing to do with the upgrading of the quality of service industries, whether legal profession or other fields. On the contrary, the opposite may be the case.

Furthermore, it will create new national divisions by undermining the nation-building process especially at a time when the country is celebrating the 50th Merdeka anniversary when Malaysians have discovered that the country had not made much progress in promoting national integration in the past five decades. Continue reading “Scrap Maybank ruling on 50% bumi partnership for law firms on its panel – unacceptable NEP extension”

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BN’s Pyrrhic victory in Ijok – next general election before 50th Merdeka celebrations on August 31?

Is the next general election likely to be held before 50th Merdeka Anniversary celebrations of August 31 as a result of the Machap and Ijok by-elections?

Until now I had completely ruled out the possibility of the next general election being held before August 31 as the hundreds of million of ringgit that will be splurged all over the country to celebrate our half-a-century of nationhood would have been planned with an eye to recreate the “feel good euphoria” which had been so successful in the 2004 general election to give the Prime Minister, Datuk Seri Abdullah Ahmad Badawi an unprecedented victory mandate of 91% of the parliamentary seats.

There have been two schools of thought among the election strategists in Umno and Barisan Nasional. — whether the next general election should be held next year before end of April when Datuk Seri Anwar Ibrahim regains his civil right enfranchisement to stand for elective office or latter part of this year.

As a result of the Machap and Ijok by-elections, the third option of a general election before the 50th Merdeka Anniversary celebrations on August 31 appears to be seriously on the cards.

Those who advocate early polls even before the splash of the 50th Merdeka anniversary celebrations are worried that the longer the next general election is delayed, the worse it is going to be for the ruling coalition as Abdullah’s stocks can only further plummet with his proven inability to fulfill his 2004 general election pledge to lead a clean, incorruptible, accountable, transparent, efficient, democratic, just and people-oriented government.

Umno and Barisan Nasional leaders who have various serious allegations hanging over their heads also want early polls to end their agony so that they can start on a new slate by claiming personal vindication with a Barisan Nasional election victory.

Although the local stock market hit an all-time high yesterday with the Kuala Lumpur Composite Index (KLCI) rising to a record 1,342.79 points, there is considerable nervousness as to how long such a bullish situation can last. Continue reading “BN’s Pyrrhic victory in Ijok – next general election before 50th Merdeka celebrations on August 31?”

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Singapore Malays better off than Chinese in Malaysia

Singapore Malays better off than Chinese in Malaysia
by Richard Teo

It is rather ironic that Baki Aminuddin could venture to write in Malayisakini that “S’pore Malays worse off than Chinese here” when in fact the opposite is the truth.

Before I begin to answer his fallacious argument I would like to pose one very simple question to him. If S’pore Malays are really worse off in Singapore why is there no exodus of Malays from S’pore to Malaysia? Instead the opposite is happening where the Chinese are making a beeline to Singapore for work and education?

Baki is naive to deny that LKY’s statement that the BN govt is systemmatically marginalising the Chinese and non-Malays. Before condemning the S’pore govt of marginalising the Malays and their education Baki should support his assertion with facts rather
than spurious allegations.

There is no official policy to deny the Malays the chance to further their education till tertiary level provided they have the abilty to compete on a level playing field. Can Baki honestly say that the Chinese and non-Malays in Malaysia are given the same opportunity in education? Is it not a fact that Malays are exclusively given places in Mara schools where with their one year matriculation exams they can hop into any of the local universities whereas non-Malays have to undergo the more rigorous two year STPM exam to gain admission? Continue reading “Singapore Malays better off than Chinese in Malaysia”

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The NEP has been abused to help the rich

The NEP has been abused to help the rich

The NEP has been abused to help the rich
by Richard Teo

How long can the govt continue with its NEP policy? If the govt’s denial that ASLI’s report “of 30% bumiputra equity ownership had already been exceeded ” then it’s incumbent upon the govt to provide a clear official methodology as to how corporate equity is measured.

Earlier, the centre for public studies headed by Dr, Lim Teck Ghee had made a statement that its findings had established bumiputra equity ownership had exceeded 45%. In order to rebutt this findings by ASLI and to deny further credence to the findings that “corporate equity distribution was narrowly based, unrealistic and has resulted in an underestimation of the true volume and value of bumiputra equity”, the govt must reveal the official methodology to measure corporate equity. Based on its
calculation it must provide clear irrevocable proof that bumiputra’s equity has regressed to a lowly 18% in 2006.

At that time when the ASLI’s findings was published many UMNO leaders including the P.M called the report “baseless, inaccurate and irresponsible”. UMNO vice-President Tan Sri Muhyiddin Yassin went even further and called it “rubbish”.

There was a beacon of hope to establish the truth when DPM Najib gave an assurance that the methodology used to calculate the Bumi’s corporate equity would be publicly revealed.That assurance was given almost six months ago and it appears quite likely that the DPM has reneged on his word.

NEP in its present form has been abused and lost its initial noble objectives of helping the poor and the needy instead of the rich of one single race. Instead of affirmative action based on poverty it was exclusively based on a policy of helping just one race irrespective of the wealth of that person. Continue reading “The NEP has been abused to help the rich”

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Nazri’s reply in Parliament completely unsatisfactory and unacceptable

The reply by the Minister in the Prime Minister’s Department, Datu Nazri Aziz in the final winding-up of the debate on the Royal Address yesterday is totally unsatisfactory and unacceptable, particularly on four public interest issues of national importance.

As Nazri’s reply blatantly disregarded the paramount principle in nation-building which had recently been enunciated by the Raja Muda of Perak, Raja Nazrin Shah, MCA Ministers are challenged to speak up in Cabinet to dissociate themselves from Nazri’s reply on four important public interest issues:

  • Brain drain with migration overseas of one to two million of the best and brightest of Malaysian sons and daughters for over three decades;
  • Education Minister and UMNO Youth leader, Datuk Seri Hishammuddin Hussein’s keris-wielding at the recent Umno Youth assembly in the context of rising chauvinist and extremist demands and pressures;
  • Rejection of the Inter-Faith Council proposal;
  • Worst corruption crisis in nation’s 50-year history.

Nazrin’s keynote address on “Prospects and Challenges of Nation-building” at the Young Malaysians’ Roundtable Discussion on National Unity and Development in Malaysia last week must be compulsory reading for Cabinet Ministers and all Barisan Nasional MPs — and they should be made to pass a test to ensure that they fully understand Nazrin’s speech and grasp the message of the Raja Muda of Perak.

The most important message of Nazrin’s keynote address is that Malaysia belongs to all Malaysians equally, and all have an equal right and responsibility to take ownership of their country and its future, as represented by this declaration: “Malaysians of all races, religions, and geographic locations need to believe beyond a shadow of doubt that they have a place under the Malaysian sun.”

Unfortunately, Nazrin’s message that all Malaysians must have an equal place under the Malaysian sun has not been understood by Nazri, Barisan Nasional Cabinet Ministers and MPs particularly from the MCA. Continue reading “Nazri’s reply in Parliament completely unsatisfactory and unacceptable”

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Winning back FDIs – fundamental policy changes needed and not merely incentives

Winning back FDIs

Winning back FDIs
by Dr. Chen Man Hin

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced a bouquet of incentives to induce foreign investors to put their money in Johore’s Iskandar Development Region (IDR). Undeniably the incentives are attractive.

While the development of IDR is important and should be encouraged, it is vital to realise that foreign investments are needed badly for the country as a whole. Therefore, the incentives for IDR should logically be implemented for the whole country.

Malaysia unfortunately is bypassed by foreign investors and is low in their choice to park their money. It is definitely not on the radar of foreign investors, contrary to the claim of the Minister for International Trade, Datuk Paduka Rafidah Aziz.

UNCTAD report on FDI shows that Malaysia has much lower FDIs than many other countries in ASEAN – Continue reading “Winning back FDIs – fundamental policy changes needed and not merely incentives”

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Why Iskandar Development Region will fail

Why Iskandar Development Region will fail
by Richard Teo

The response from the foreign investors to the Iskandar development Region is quite evident. After few months from its launching, the Iskandar Development Region has received lukewarm response from the foreign investors.

This prompted Tun Musa Hitam, a member of the Iskandar Development region Authority(IRDA)advisory Council to say unequivocally that ‘it was time to give up the New Economic Policy (NEP) for the success of the Iskandar development Region(IDR).’

On 22nd March 2007, our P.M declared that six sectors would not have to have Bumiputra equity participation.

For 50 years our malay political masters have deemed fit to cling to the NEP policy and now without much persuation they have willingly relinquish that condition for the Iskandar development Region. Why?

The simple reason is that Malaysia has missed the boat. Most of the FDI’s that we are targeting have taken flight to China’s economic region of Shenzan, Hangchou and to India’s Mumbai and Bangalore region.

Of late whatever FDI left have gone to Vietnam. So who are we trying to attract to the IDR? In order to answer this question let us examine the profile of the investors in Malaysia. Continue reading “Why Iskandar Development Region will fail”

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Musa Hitam’s merit call for IDR to attract FDIs – extend to whole country

Musa Hitam's merit call for IDR to attract FDIs

Thirdly, on international competitiveness.

The Royal Address quoted the World Competitiveness Yearbook 2006 where Malaysia’s position has improved from 28th place in 2005 to 23rd place in 2006.

Since last month, the government has tried to generate a “feel good” atmosphere among the people with the message that good economic times are back.

Parliament was told that since 3rd January 2007, the Bursa Malaysia Composite Index has been recording an encouraging performance and exceeded 1,200 points, a level which has not been reached since the Asian currency crisis in July 1997. There was the record 2006 trade volume breaching RM1 trillion. We are told that in 2006, “total investments in the country remained strong, reaching its highest level in the history of our nation”.

On February 13, International Trade and Industry Minister, Datuk Seri Rafidah Aziz announced that Malaysia is back on the global investment map, with a record RM46 billion investments in 1,077 approved manufacturing projects last year by local and foreign investors — a 48 per cent jump from the RM31 billion invested in 2005. This was made up of RM20.2 billion of foreign investments and RM25.8 billion in local investments.

Is the government right that Malaysia is “out of the woods”, dispelling the gloomy news in the past few months that Malaysia is in danger of dropping out from the radar of foreign investors because of increasing lack of international competitiveness, whether in efficiency of public service, quality of education, good governance, transparency and integrity?

The United Nations Conference Trade and Development (Unctad) World Investment Report 2006 last October revealed unflattering figures about Malaysia for the year 2005, viz: Continue reading “Musa Hitam’s merit call for IDR to attract FDIs – extend to whole country”