For the past two weeks, Malaysians had been fed with the news that good economic times are back, with the country drawing a record RM20.2 billion in foreign investment in manufacturing, a record 2006 trade volume breaching RM1 trillion, rocketing share prices, a strong ringgit and rising foreign reserves.
The Prime Minister Datuk Seri Abdullah Ahmad Badawi had denied that an imminent general election is on the cards because of the slew of good economic news to generate a “feed good euphoria” reminiscent of the period before the 2004 general election.
Although the next general election will not be held in the next few months, everyone would expect the holding of early general elections in the next eight to 14 months before April 2008, when Datuk Seri Anwar Ibrahim would regain his civil liberties including the right to stand for elections at the end of his five-year disqualification from the date of his prison release.
But are the good economic times back for the people of Malaysia? If so, a little-noticed announcement on Chinese New Year’s Day has sent out a very different message.
On February 18, 2007, Bernama reported that the government had scrapped its earlier plan to extend the textbook loan scheme to all school students, both at primary and secondary level, from next year. Deputy Education Minister, Datuk Noh Omar was quoted as saying that the move was scrapped as the ministry would incur an extra sum of over RM100 million yearly.
When the government has to cancel the textbook loan scheme for all students because it cannot afford the additional expenditure of RM100 million, it strains credibility to believe that the government and the country is aflush with funds.
Malaysians have been told in the past fortnight that the country is back on the global investment map, in reversal of 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:
- Foreign direct investment (FDI) in Malaysia dipped to US$3.97 billion in 2005 from US$4.62 billion in 2004;
- For the first time since 1990, Indonesia managed to overtake Malaysia in drawing FDIs. Inflows to Indonesia surged by 177% to US$5.26 billion in 2005. Indonesia registered a 177 per cent hike in FDI from US$1.89 billion in 2004 to US$5.26 billion in 2005, while Malaysia suffered a 14.3 per cent shrinkage of FDI.
- As a whole, FDIs to South, East and South-East Asia reached a new high of US$165 billion in 2005, a 19% increase over 2004, with China (US$72 billion), Hong Kong (US$36 billion) and Singapore (US$20 billion) as the biggest receipients of FDIs in 2005.
Ten days ago, the Minister for International Trade and Industry, Datuk Seri Rafidah Aziz gave a glowing picture of foreign investments for last year, with one mainstream newspaper declaring: “Malaysia is back on the global investment map”.
She announced a record RM46 billion achieved last year — RM20.2 billion of approved foreign investments in manufacturing as compared with RM17.9 billion in 2005 and RM25.8 billion in domestic investments compared with RM13.1 billion in 2005.
Rafidah’s FDI figures however do not tally with the latest Unctad figures released in its “Number 1, 2007 Unctad Investment Brief” which has given an even lower estimate for FDI for Malaysia for 2006 as compared to 2005.
In its preliminary estimates of FDI inflows in 2006, Unctad figures for Malaysia see a shrinkage of 1.6 per cent to US$3.9 billion from US$4.0 the previous year, while FDIs for the whole region of “South, East and South-east Asia” register an increase of 13.1 per cent from US$165.1 billion in 2005 to US$186.7 billion, with Thailand recording a 114.7 per cent increase from US$3.7 billion in 2005 to US$7.9 billion and Singapore a 58% increase from US$20.1 billion in 2005 to US$31.9 billion.
The Prime Minister should explain the RM6.4 billion difference in MITI’s FDI figure of RM20.2 billion (or US$5.7 billion) for 2006 and UNCTAD’s preliminary estimates of US$3.9 billion (RM13.8 billion) for the same year.
This difference would increase to RM9.85 billion if we take into consideration two qualifications to the MITI figures released by Rafidah:
Firstly, the figures are for approved FDI figures for the year which are very different from actual FDI inflows for the year. For instance, for 2005, approved FDIs in manufacturing was RM17.9 billion (US$4.71), but actual FDI inflow into the country was US$3.97 (RM15.1 billion) — a shortfall of RM2.8 billion.
Secondly, the FDIs in manufacturing represents only 75% of total FDIs, which will bring the difference between FDIs for manufacturing as approved and actual inflows for 2005 to RM6.6 billion.
On the same basis that some 75 per cent of FDI inflows in 2006 was for manufacturing, then the difference between MITI and Unctad figures for FDI inflows for manufacturing would increase further to RM 9.85 billion — which is no small figure.
A full and proper explanation for these different set of FDI figures should be given to the people in keeping with the government’s pledge of accountability, transparency and good governance.
#1 by devilmaster on Saturday, 24 February 2007 - 3:27 pm
Manipulating economic figures have been a norm in Bolehland under Abdullah administration.
In October 2006, Dr Mahathir accused Abdullah of having developed a habit of lying.
#2 by Jonny on Saturday, 24 February 2007 - 4:02 pm
Another David Copperfield illusion act.
#3 by trojan_horse78 on Saturday, 24 February 2007 - 4:07 pm
what is DAP stand on FTA malaysia?
#4 by democrate on Saturday, 24 February 2007 - 6:34 pm
If it is a government of the people the economy recovery should bear the cost of the price hike of petrol,the price hike of the highway and reduce the Johore 2nd link toll.It is a laughing stock to the whole world that a country like Malaysia having rich resources given by mother of nature and in the absence of natural disaster that bcos’ of corruption and abuse of power ended up with the people has to suffer for all these burden that supposed to be’ pikul ‘ by the ruling party. Pak Lah election is near soon the recent topics are very clear that it is a election recipe . Pak Lah i will say the mega project in JB will fail if the attitude of your son in law and the man who carried the kris around do not change cos they are like ghosts to scare off the investers !
#5 by k1980 on Saturday, 24 February 2007 - 6:37 pm
The Abdullah administration will never give a full and proper explanation for these different set of FDI figures to the people because its very survival at the coming general elections depend on the spin that the economy is booming. Malaysia is set to become the sick man of Southeast Asia.
#6 by dawsheng on Saturday, 24 February 2007 - 6:41 pm
Our country is in the hand of god now. God willing, Badawi will lose the next GE.
#7 by WFH on Saturday, 24 February 2007 - 8:36 pm
I have a problem with “Approved” investment -vs- “Actual” Investment – If a direct investment proposal, foreign or domestic, is “approved” in Year 1, according to MITI it is deemed to be as good as commited investment and included in its statistics. My problem is if the investment takes off only in the next, or later, year, the actual invested capital introduced in year of commencement will also be included as Actual investment of that next or later year. Isn’t that double counting? Does MITI have any system which quantifies the carry-forward of investment commitments rolled-out, and ensures that it is not reported as if it had been commenced? Who, or what body, if any, reviews (audits?) MITI statistics and announcements to ensure that basic principles of accounting against double-reporting are adhered to?
Incidentially, I read elsewhere that the MITI fat lady’s son’s company, Nasioncom, has been rapped by the Securities Commission for over-reporting sales for 2005, reporting about RM200 million, of which 2/3 were ‘non-existence” sales.
Runs in the family, so it appears?
#8 by Bigjoe on Saturday, 24 February 2007 - 9:50 pm
I had raised the discrepancy when Rafidah first announced the numbers. If you read the statement, its not clear if its approved project or actual FDI and worst it appear to be mixing up both akin to mixing apples and oranges. If Rafidah’s 2006 numbers is approved project, it means that FDI is still falling for the coming year because approve project generally reflect actual FDI for the following year..
I have a sinking feeling that what they will end up doing is not answer the question but say things like UN figures is wrong or have different or something. Its crock – its data manipulation to get whatever numbers they want..
#9 by izrafeil on Saturday, 24 February 2007 - 11:38 pm
The disparity i think is as follow
1. perhaps GOMEN use both domestic and external DI in imputing the figures.
2. perhaps difference between approved and actual
what is there to shout about when we compare the FDI even with our tiny tiny tiny neighbour Johor’s south Island? shame on Mesia for not giving regional comparison
#10 by ENDANGERED HORNBILL on Sunday, 25 February 2007 - 12:30 am
Whilst some countries like our southern neighbour is striving to be in the top half of the First World, I kinda get the feeling the way we are messing around with figures and statistics, the way we are managing people and resources, we should not be surprised we end up in the bottom half of the Third World.
Recently some author wrote a book about the ‘Flight of the Creative Class’. Well, the First World countries and those that aspire thereto will continue to receive those flights of creative genius. And those that are doomed to stay in the Third World will continue to experience the negative impact of those flights.
By suppressing meritocracy and adopting discriminatory standards in employment, education and electoral processes, we are sealing in the rot, the refuse and the rejects. Take a ‘wild’ guess where we are headed?
#11 by ENDANGERED HORNBILL on Sunday, 25 February 2007 - 12:40 am
BERNAMA REPORTS: “PM Challenges Local Researchers To Develop Leading-edge Applications”
My question to Pak Lah is: With the ‘flight’ of creative genius and the ‘suppression’ of creative talent, do we have the critical mass and motivation to spearhead research in leading-edge technology? How has this become blunted? What are you, as the PM, doing about this instead of the steady stream of ‘feel-good’ lip-service and the unending flow of ‘spiritual’ advice and other inanities?
#12 by ENDANGERED HORNBILL on Sunday, 25 February 2007 - 12:45 am
BTW, we are still waiting for Naguib’s promised release of the computation on the Bumi Equity. How many months have swept by and yet NAguib is unable to work out or provide such simple figures? First World!
#13 by accountability on Sunday, 25 February 2007 - 3:22 am
if they can manipulate figures for the NEP, and the ever-increasing toll rates and highway project costs – wat’s so surprising about this new fairy-tale?
DPM najis alone is already pro at the UK sports center spin-doctoring while PM aab was equally skilful with the private jet spin.
#14 by DarkHorse on Sunday, 25 February 2007 - 10:35 am
The difference between today and say the early 80s, is that foreign investors when they looked at all those figures published by MoF, MITI, MIDA and BNM etc they asked themseves, “What is it that is not covered or not mentioned here.” Today the same foreign investors when they look at reports emanating from the same sources would have to ask more than that. Today the same foreign investors need to ask the most basic of all questions, “Is this true?”
To window dress is one thing but to mislead is another. That’s how far we have gone with our integrity. Who cares about transparency??
#15 by bennylohstocks on Sunday, 25 February 2007 - 3:42 pm
Good times are back!!
http://malaysiancartoons.blogspot.com/2007/02/good-times.html
#16 by Maddresearch on Thursday, 24 May 2007 - 10:29 am
“It’s not just Maybank
CH Ong, May 9, 07 2:33pm
Maybank’s policy that legal firms must have at least 50 percent bumiputera equity in order to qualify for appointment to it’s panel of lawyrs is similar to that being practised by other GLCs over the years.
However the other GLCs do not announce their discriminatory policies. They simply implement such policies. I have not come across Petronas service stations being operated by non-bumiputeras. I am a non-bumiputera professional in private practice without a bumiputera partner and my professional services are not welcomed by Petronas.
Because of Petronas’ discriminatory policies I have stopped patronising Petronas service stations. If only all non-bumiputera Malaysians stopped patronising Petronas service stations, then perhaps the Petronas management will rethink their discriminatory policies.
I used to buy petrol from BP service stations but since BP has been bought over by Boustead, I have stopped patronising them. I don’t even know what they are called now. The reason is that I found out Boustead’s property division also practised discriminatory policies when appointing consultants.
In the early eighties, when Sime Darby ‘s property division was headed by a non-bumiputera (an Indian gentleman), I was appointed to provide professional services. As soon as bumiputeras took over, my services were no longer welcomed and required.
Also in the early eighties my company was a customer to bumiputera company. This company was an associate company of Island and Peninsula . However when I approached Island and Peninsula with the intention of getting my company registered as a provider of professional services, I was told clearly that my services were not welcome because my company did not have any bumiputera partners.
I then did some research and discovered that generally the so-called GLC property companies being run by bumiputeras practise discriminatory policies. Since then I have never considered buying any property from such companies.
All the above are facts which I am aware of. All these GLCs may well be practising other discriminatory policies which I am not aware of and which I shall not speculate on.
I have been a customer of Maybank, for both banking and credit card services, for more than 25 years. Since Maybank has decided to openly practise discriminatory policies, I have also decided to take steps to terminate my accounts with Maybank, and I shall definitely let them know my reason for terminating my accounts.
I believe that if all non-bumiputeras let all these GLCs know how they feel about their discriminatory policies, by way of action and not just words, then perhaps they will not be so arrogant.
Gerakan Youth chief Mah Siew Keong’s statement: “In many smaller towns, a lot of lawyers are a one-man show. If the 50 percent bumiputera equity (policy) is enforced, then it means all those lawyers operating alone will not be allowed to do any work for the bank,” only shows that he is weak and dare not condemn outright Maybank’s discriminatory policy.
Is he suggesting that in big towns and cities where most legal firms are partnerships rather than one-man shows, it is then OK for Maybank to practice it’s discriminatory policy? ”
For the above, this is a tip of the icebergs only! This is why the GLCs should consider as bumiputra companies when come the ownership of bumiputra. In some of the examples, like petronas even there was black and white stated as JV company where non bumi can have 30% shares but when they found there is a non bumi worker in that company, the bumi officers from petronas will start harassing the company management! There are many ways the non malays are discriminated in black and white!!! Please talk about unity and wasting money in trying to teach our kids in unity (I am all for unity, peacefulness and harmony). Once they are in the secondary schools they realised they are discriminated by themselves.