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Speech at DAP Seputeh Dinner

by Lim Guan Eng

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(Kuala Lumpur, Saturday): Malaysia's International Trade & Industry Minister Datuk Seri Rafidah Aziz should apologise to European Union’s envoy to Malaysia Dr Thierry Rommel for her unjustifiable and unwarranted personal attacks in insisting that the NEP has attracted FDIs, which are not borne out by facts. Sadly instead of admitting that she has got her facts wrong, she has decided to take the hysterical nationalist approach in blaming Rommel for having an attitude problem.  

Instead of shooting the messenger, Rafidah should look at the cold hard facts that shows the NEP and its racial quota policy has indeed hurt foreign investment. The UN Conference on Trade and Development (UNCTAD) No. 1 2007 Investment brief shows that Malaysia’s FDI has declined by 1.6% from US$ 4 billion in 2005 to US$ 3.9 billion in 2006. The report mentioned,

“FDI flows to Asia and Oceania maintained their upward trend, reaching a new high of $230 billion - up 15% from 2005. Thus, the share of this region in total FDI to developing countries rose from 59% to 63%. China and Hong Kong (China) remain the leading destinations,followed closely by Singapore with some $32 billion of inflows - an unprecedented level. India also saw record inflows.”

From 2005 to 2006, Hong Kong’s FDI rose 15.4% from US$35.9 billion to US$ 41.4 billion, Singapore rose 58.8% from US$ 20.1 billion to US$ 31.9 billion, India rose 44.4% from US$ 6.6 billion to US$ 9.5 billion and Thailand despite the Islamic terrorist insurgency rose a remarkable 114.7% from US$ 3.7 billion to US$ 7.9 billion. For Malaysia to drop 1.6% from US$ 4 billion to US$ 3.9bilion when our neighbours in the region have rising FDI is a shocking indictment of the unattractiveness of our investment climate and failed policies such as the NEP.

Private scandals of corruption can not be allowed to defeat or distort public policies just to distract attention

The NEP is now the biggest stumbling block with foreign investors until on June 21, Rommel was moved to say that Malaysia’s attractiveness to foreign investors had weakened because of the education and economic policies favouring bumiputras at the expense of other groups was detrimental to Malaysia. Rafidah should take heed of Rommel’s criticisms of a lack of a level playing field and that, “Together with an inefficient public service, corruption and the questionable and unchecked practices of Malay preferential treatment, it had also dampened the business environment and economy of the countr.”

Corruption engendered by the NEP has reached such alarming proportions that caused Malaysia’s ranking in the Transparency International Corruption Perception Index(CPI) to drop from No. 39 in 2005 to No. 44 in 2006. Private scandals of corruption can not be allowed to defeat or distort public policies just to distract attention.

The truth hurts and may even increase Rafidah’s blood pressure, but Malaysia needs to face up to the challenges of globalisation and competition when Malaysia becomes a net oil importer by 2010. Without the contribution of 40% of oil revenues from Petronas to our yearly national budget, developing our human resource and discarding failed policies such as NEP is the only solution.

There must be equal opportunities in education and employment to face the challenges of globalization. Malaysians must be encouraged and rewarded for hard work. Unless we are good enough we will not be able to compete internationally. We must liberate human resources and potential – for all people, not just a privileged few. Human resources, more so than natural resources, is the nation’s key both in economic and social progress.