COMMENT It came as no surprise that the government blamed the global financial crisis as the reason why our foreign direction investment (FDI) has plunged by a shocking 81 percent last year.
Trade Minister Mustapa Mohamed reportedly said that the government acknowledged the “dampening” of FDI inflow into Malaysia, but said it reflects a larger trend where the world FDI flows in 2009 fell by 37 percent.
There is a huge gap between 81 percent and 37 percent, if our government knows how to do the maths.
The figures in the World Investment Report 2010 by UNTCAD, a United Nations think-tank, which showed Malaysia’s FDI dropped to USD 1.38 billion last year, from USD 7.32 billion in 2008, is both ironic and telling.
Malaysia is now ranked sixth among the Southeast Asian nations on FDI inflow, losing out to our neighbours like Singapore, Thailand, Indonesia, Vietnam and even the Philippines.
The report has not only confirmed that we have lost much of the shine to our neighbours, but it also reveals a grim picture for us to restore investors’ confidence and present ourself as a competitive nation.
Since Prime Minister Najib Tun Razak took power last year, he has launched a series of ‘feel-good’ policies like the New Economic Model and the 10th Malaysia Plan, which were hyped up as people- and investors-friendly policy.
The truth remains that we’re still struggling to combat our ballooning budget deficit, which the government aims to narrow to 5.3 percent this year, despite that analysts are doubtful whether that is attainable after the government pumped in RM67 billion last year for the two largely ineffective stimulus packages.
Najib has not really tackled the issue of how to make the bumiputeras more competitive, race-based affirmative action policy remains while corruption and leakages in government delivery system are rampant.
Recent private visit
It is the ordinary Joes that are the ones who suffered the most with the ’5-in-1′ price hikes recently while tens of millions were spent to hire a public relations firm to boost up the PM’s image.
During this time, his wife enjoys a good time with her guest like Hollywood star Robert de Niro who she said would help to clear “misconception” about Malaysia among foreigners (though the latter says he was on a private visit, we have no clue whether the rakyat’s money is involved to treat him nasi lemak and roti canai).
Compared to our neighbours, we did not see such a drastic decline in FDI in Thailand which has suffered its worst political violence in decades in the recent months.
The Bank of Thailand has raised its economic growth forecast recently and expect the country to grow a strong 6.5 to 7.5 percent this year.
Singapore, meanwhile, is set to become the world’s fastest-growing economy this year after the government said it will expand between 13 and 15 percent.
And Malaysia? Our economy is officially forecasted to grow 5.5 percent this year though Najib himself would love to see a 6 percent expansion.
Perhaps he require some help from his wife’s guest, Robert de Niro to achieve this.
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