Lim Kit Siang

The world has spoke “yes to economic freedom, liberal market, no to NEP and corruption”

By Dr Chen Man Hin, DAP life advisor

UNCTAD, a UN body has issued its World Investment Report (WIR) 2010 on Foreign Direct Inflows (FDIs) of world countries.

The report on the 2009 FDIs into the Asean region are as follows

Singapore US$16.1 billion
Malaysia 1.38 billion
Philippines 1.95
Thailand 5.95
Indonesia 4.88
Vietnam 4.56

The FDI for Malaysia in 2008 was US$7.2 billion, which meant that there was a 81% precipitous drop for the year 2009.

The DAP had warned many times over the past few years that there should be a change in strategy to attract foreign investment into the country. The steady fall of FDI into Malaysia was a clear indication that the policies of the government were unattractive to investors, both foreign and local. but our warnings fell on deaf ears.

Now the day of reckoning has come. The WRI of 2010 has clearly indicated that FDIs to Malaysia has fallen by 81%, largely because foreign investors do not find the investment climate friendly.

LOSS OF INVESTMENT CONFIDENCE.

There were early warning signs. The European Union sent a delegation to Malaysia and they commented that there were restrictions on free trade and were not happy about the New Economic Policy restriction of 30% bumiputra equity. America too have reservations about procurement which favoured bumiputras with the 30% bumiputra equity, as a result of which, America would not sign a free trade agreement with Malaysia.

POOR PERFORMANCE OF KLCI

Compared with other stock markets in Asia, the Kuala Lumpur Composite Index (KLCI) performed badly showing severe loss of investor confidence

HANG SENG INDEX STRAITS TIMES INDEX INDONESIA STOCK INDEX KOSPI (KORES KLCI (MALAYSIA)
1990 2750 1500 1200
2000 15000 2000 680 1000 974
2010 20500 2950 3000 1800 1337

The stock indices show that after twenty years, Hong Kong index increased 8 times, Singapore 2 times, S Korea up by 80%. As for the KLCI, it hardly increased at all. It has remained almost static since 1990.

This is a sad reflection of the utter lack of confidence in the KL market, meaning that local investors have no confidence in the economy.

There is a complete loss of investor confidence by both foreign and local investors.

CAUSES this is a grave situation and the Prime Minister should review his political and economic policies of the country, in the eyes of the world, Malaysia has fallen our of the ranks of the Asian tigers, and even below Indonesia, Thailand and Vietnam. The Prime Minister must change to a LIBERAL, FREE ECONOMY with no more rent seeking, no more closed tenders, and definitely no more NEP. If he cannot change, then it is a matter of time when Malaysia will join the ranks of banana republics like Zimbabwe.

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