MICCI: Malaysia must fix three areas to get FDI
By Lee Wei Lian
Malaysian Insider, KUALA LUMPUR, Jan 21 —
Malaysia must pay attention to foreign equity limits, environment and security standards, and infrastructure particularly broadband communications if the country wants to boost its flagging foreign direct investment, says the country’s oldest business association.
Stewart Forbes, executive director of the Malaysian International Chambers of Commerce and Industry (MICCI) also said the country must make a choice between taking big bold strides to a new economy or be left behind to remain a middle income country by more aggressive emerging economies.
But he picked on broadband, for which Malaysia had targeted a 50 per cent penetration rate by this year.
“The broadband has to meet international standards. The ICT infrastructure in Malaysia is a limiting factor and doesn’t meet the needs of high tech industries,” Forbes told The Malaysian Insider in an exclusive interview.
Malaysia began its Information Communication Technology (ICT) drive in the 1990s when it launched the Multimedia Super Corridor that stretched from Kuala Lumpur’s business district to the new administrative capital Putrajaya and Cyberjaya, its centre for the IT sector. But other countries in the region have leapfrogged Malaysia to provide better broadband and other IT facilities.
Forbes also cautioned that the country’s practice of being generally protective of local industries made it difficult for it to implement reforms such as opening up the economy.
Malaysia is currently struggling to move up the economic value chain but the government has traditionally dragged its feet when faced with making difficult decisions such as the introduction of minimum wages, removal of subsidies, the phasing out of uncompetitive industries and the implementation of meritocracy partly to avoid upsetting its voter base and partly due to its aversion to risk.
This tendency to avoid reforms in the past could also explain why Malaysia’s development remains relatively stunted when compared with regional economies like Singapore, Taiwan and South Korea despite having a head start in education and infrastructure and the added bonus of plentiful natural resources.
The Najib administration, however, plans to unveil a new economic model next month which is expected to address some of the structural issues plaguing the country but will require significant political will to see it through.
“If you want 100 per cent protection, you cannot do major changes but can only do tiny changes,” Forbes said.
“It is not acceptable to take baby steps, but you need to take large steps to a new economy.”
“Everyone is moving fast now,” he added “If you move too slow, you will be overtaken.”
Forbes also suggested that the country look to importing the talent it needs in order to scale up its skills capacity and highlighted the difference in the number of expatriates in Malaysia and its neighbours.
He said it is easier now than before to bring in expatriates but the number, currently about 38,000, is still “critically low.”
He added that he heard of a case where the Singapore government declined to give one expatriate a work permit but offered a permanent residency instead.
“Singapore is saying: ‘Let’s lock talent into our gene pool’,” said Forbes.
MICCI traces its history back to 1837 when it was formed as the Penang Chamber of Commerce and Agriculture and is reputedly the second oldest organisation in the country, after the Royal Malaysian Police.
It currently has over 900 members made up of multinationals, large local conglomerates and small and medium enterprises.
It is a founding member of the national umbrella for commerce associations — the National Chamber of Commerce and Industry of Malaysia which is made up of MICCI, the Federation of Malaysian Manufacturers, Malay Chamber of Commerce Malaysia, The Associated Chinese Chambers of Commerce and Industry of Malaysia and the Malaysian Associated Indian Chambers of Commerce and Industry Malaysia.
It is also a member of the World Chambers Network and the Confederation of Asia-Pacific Chambers of Commerce and Industry.
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