Tuesday, October 17, 2006
Malaysia falls behind Indonesia
A responsible, democratically elected government will sound the alarm bells and a serious, concerted effort will be undertaken to ensure proper steps are taken to effectively stop further bleeding if a United Nations-sanctioned report concludes that foreign direct investment inflow into the country has dipped significantly in a span of just one year, relegating this country into a lowly ranking of six out of a pool of ten countries. If there is a need to compound things further, let's also assume foreign direct investment inflow into this group of ten actually spiked by more than forty percent within the same period. This effectively means that foreign investors still like the Southeast Asia region a great deal. A spike in investments in the region but a blatant dip for Malaysia? This would mean a disturbing trend in my book.
For the record, the United Nations Conference on Trade and Development's World Investment Report (WIR) 2006 revealed that Malaysia’s FDI inflow contracted by 14.21% to only US$3.97 billion (RM14.63 billion) last year from US$4.62 billion (RM17.02 billion) in 2004. This was a sharp contrast to the overall FDI inflows into Southeast Asia, which jumped 44.7% to US$37.14 billion (RM136.83 billion) last year, mainly driven by mergers and acquisition activities.
Okay, I just made up my first two sentences based on the report’s finding stated above. But not the part of the alarm bells and serious effort. Malaysia of late has not been known to view foreign reports with open arms but instead views them through the prism of “foreign propaganda.” But this time, Indonesia – our favourite source of menial labour – has for the first time upstaged us as far as foreign investment inflows are concerned. Singapore (of course), Thailand and even the Philippines left Malaysia behind. I suppose we can beat our chests with the fact that we still lead over countries like Myanmar and Laos in the area of FDI!
Indonesia’s foreign direct investment inflow jumped nearly five times to more than US$5 billion in 2005 from just under US$2 billion in 2004. Any way you look at it, this is bad news, and the Prime Minister’s spin doctors have a lot of work to do. This drop in FDI cannot be conveniently directed to his predecessor’s doorstep. This happened on Pak Lah’s watch. No new growth areas have really excited investors – local and foreign. Our competitiveness which we have taken for granted for more than a decade, is slowly but surely eroding. No wonder the Minister responsible for foreign direct investment in the sectors of industry and international trade Datuk Paduka Rafidah Aziz has been pursuing a personal policy of staying out of sight of the media spotlight.
It would earn the government a whole load of goodwill domestically and foreign appeal if it reviews the practice of narrow, race-based policies, to wealth distribution policies which are more class-based. Malaysia must realize that current policies that enrich some UMNO members disproportionately to the detriment of the larger mass of people (Malay, Chinese, Indian) left seething in despair and quiet anger, will make Malaysia weak in the global market. De-politicize the education system and help people who need assistance and a leg up. The evidence of past follies is already reaching the ears of the business decision makers of the world. It is time that our decision makers take courageous decisions now although with current evidence so far, I find that unlikely. Malaysia desperately needs responsible leadership!
It would be amusing to see the politicians who were extremely loud to the point of rudeness, to ridicule the methodologies used by a think-tank to calculate the Bumiputera equity share, to demand the same of the United Nations. Good night. ¶ 9:47 PM
For the record, the United Nations Conference on Trade and Development's World Investment Report (WIR) 2006 revealed that Malaysia’s FDI inflow contracted by 14.21% to only US$3.97 billion (RM14.63 billion) last year from US$4.62 billion (RM17.02 billion) in 2004. This was a sharp contrast to the overall FDI inflows into Southeast Asia, which jumped 44.7% to US$37.14 billion (RM136.83 billion) last year, mainly driven by mergers and acquisition activities.
Okay, I just made up my first two sentences based on the report’s finding stated above. But not the part of the alarm bells and serious effort. Malaysia of late has not been known to view foreign reports with open arms but instead views them through the prism of “foreign propaganda.” But this time, Indonesia – our favourite source of menial labour – has for the first time upstaged us as far as foreign investment inflows are concerned. Singapore (of course), Thailand and even the Philippines left Malaysia behind. I suppose we can beat our chests with the fact that we still lead over countries like Myanmar and Laos in the area of FDI!
Indonesia’s foreign direct investment inflow jumped nearly five times to more than US$5 billion in 2005 from just under US$2 billion in 2004. Any way you look at it, this is bad news, and the Prime Minister’s spin doctors have a lot of work to do. This drop in FDI cannot be conveniently directed to his predecessor’s doorstep. This happened on Pak Lah’s watch. No new growth areas have really excited investors – local and foreign. Our competitiveness which we have taken for granted for more than a decade, is slowly but surely eroding. No wonder the Minister responsible for foreign direct investment in the sectors of industry and international trade Datuk Paduka Rafidah Aziz has been pursuing a personal policy of staying out of sight of the media spotlight.
It would earn the government a whole load of goodwill domestically and foreign appeal if it reviews the practice of narrow, race-based policies, to wealth distribution policies which are more class-based. Malaysia must realize that current policies that enrich some UMNO members disproportionately to the detriment of the larger mass of people (Malay, Chinese, Indian) left seething in despair and quiet anger, will make Malaysia weak in the global market. De-politicize the education system and help people who need assistance and a leg up. The evidence of past follies is already reaching the ears of the business decision makers of the world. It is time that our decision makers take courageous decisions now although with current evidence so far, I find that unlikely. Malaysia desperately needs responsible leadership!
It would be amusing to see the politicians who were extremely loud to the point of rudeness, to ridicule the methodologies used by a think-tank to calculate the Bumiputera equity share, to demand the same of the United Nations. Good night. ¶ 9:47 PM
