Doubt for the political future a detriment for Malaysia’s economy
No businessmen would want to work with a country that keeps changing its PM or governments because that translates to changing policies.
Wong Chun Wai, The Straits Times
Let’s face it – investors will not put their money in Malaysia if they’re unsure of the country and the federal government’s status tomorrow.
Malaysia once proudly told investors it has a stable government, but it can no longer make that sales pitch.
The present federal government under Prime Minister Tan Sri Muhyiddin Yassin has a wafer-thin majority, and it’s struggling to keep the administration intact.
Law makers from Umno in the ruling coalition have threatened to withdraw support and want an immediate general election, despite the raging pandemic.
Datuk Seri Anwar Ibrahim still thinks it’s his entitlement to be Prime Minister, and probably spends his time counting and recounting his list of supporters.
Tun Dr Mahathir Mohamad still feels he should be PM – for the third time – and that no one is ever going to be as good as him.
Datuk Seri Najib Tun Razak awaits jail sentence and would do anything to avoid the slammer.
Meanwhile, PAS president Datuk Seri Abdul Hadi Awang, the king maker, is busy spinning the myth or rather, fantasy, that the minority non-Muslims are hatching a plan against Malay-based parties.
Now, even with several billions of dollars to invest, why would anyone want to look at Malaysia, especially if one needs justification for their shareholders?
They can choose any country they want in Asean, or anywhere else which could offer a better deal.
An unstable government, squabbling politicians, endless shortage of labour, constant water disruptions, corruption, and race and religion issues aren’t going to make for great selling points. After all, we know how ruthless our competitors can be because these factors will surely be used against Malaysia.
Keeping it real, if you are an investor, there’s no room for doubt. You want deals as certain as sunrise.
No businessmen would want to work with a country that keeps changing its PM or governments because that translates to changing policies.
Then, there are ministers who display prejudice against businessmen who signed on agreements with their predecessors.
They opine that these businessmen must be lackeys of the past government. So naturally, they insist on the review of those huge projects, further delaying their implementation. And finally, they broker for new contracts as well.
So, it’s not surprising that one of the biggest concerns among Malaysians is a report by the United Nations on foreign direct investments (FDI) to Asean countries, which has placed Malaysia as the hardest hit in the region in 2020.
Nearly all Asean countries have seen drops in FDI, but Malaysia is down 68 per cent.
FDI is an investment made by a firm or individual in one country, into business interests in another, according to one definition.
To paint a clearer picture, the report states that FDIs to many developed and developing countries have also dropped in 2020, especially in South-east Asia, which contracted by 31 per cent due to decline in investment to the largest recipients. The tale is similar in South America and Africa, too.
The report predicts that global FDI flows will remain weak in 2021 as the slide continues, with most investors likely to remain cautious in committing capital to new overseas ventures.
Alarmingly, the drop in FDI in Malaysia began a few years ago, and not just in 2020 or 2019.
This was before the uncertainties from the Covid-19 pandemic, which locked the entire world down, and not just Malaysia. So, it’s not the sole reason.
Let’s see how we stack up. Vietnam is the poster boy of Asean investment now.
No one cares if a country is ruled by a single party, so long as it’s politically stable. It’s much easier to deal with than democratic India, what with its nosey, quarrelsome politicians, love for litigation and bureaucracy.
Vietnam, on the other hand, has a huge, hungry and young workforce.
Singapore has an image of being a squeaky-clean country. Again, PAP has been ruling since 1963, and it has a sound legal framework and financial regulation.
The island nation has become the most attractive place for digital companies, including start-ups.
Grab was set up by a Malaysian who left for Singapore after failing to get support. We know how that one turned out.
The ride-hailing company has a strong, professional workforce, which comprises many Malaysians and expatriates. Singapore makes expats and rich people feel welcome, while we’re still unclear about our Malaysia My Second Home policy.
It’s easier for untrained and unskilled foreigners to stay and secure permanent resident status in Malaysia than it is for a foreigner with millions to spend.
Indonesia is getting its act together, and with a population of more than a quarter of a billion people, and with increasing Internet and smartphone penetration, it’s a massive market by itself.
President Jokowi has pressed the right buttons and provided the image to the world that it’s a tolerant and moderate country.
We know our weaknesses, so for our sake, we need to paint a rosier picture. The last thing Malaysia needs is self-inflicted pot shots.
