4 Practices Of Good Governance To Reverse Fall in FDI

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Malaysia Can Only Reverse The 16% Fall In Foreign Direct Investment(FDI) From RM 15.6 Billion In 2003 To RM 13.10 Billion In 2004 By Adopting 4 Practices Of Good Governance; Transparent, Timely And Truthful Disclosure; Effective Action Against Corruption; A Culture Of Excellence And Accountability

Speech
- During The May Day Celebrations Organised By 9 Negeri Sembilan Indian Branches
by Lim Guan Eng

(Senawang, Saturday): DAP expresses concern at the RM 2.5 billion or 16% fall in FDI from RM 15.6 billion in 2003 to RM 13.1 billion in 2004 as announced by Minister of International Trade Datuk Seri Rafidah Aziz last month. The RM 2.5 billion fall in FDI for Malaysia in 2004 reflects the lack of confidence of foreign investors in the Malaysian economy.
Malaysia must win back investor confidence as FDI is a very important engine of economic growth for the country. Malaysia can reverse the 16% fall in FDI by adopting the 4 practices that would impress foreign investors’ namely good governance; transparent, timely and truthful disclosure of information; effective action against corruption; and inculcating a culture of excellence and accountability.

For instance in spite of Prime Minister Datuk Abdullah Badawi’s repeated promises to curb corruption, no real progress has been made. Actions against VIPs involved in corruption were taken mostly before the 2004 general elections, whilst the 18 VIPs under investigation “disappeared” after UMNO Youth Deputy President Khairy Jamaluddin’s remarks that we must look towards the future and not focus on retroactive actions.

The action against UMNO officials suspended from holding party posts for practicing money politics in UMNO elections also backfired when those suspended were allowed to cling on the government posts. Amongst UMNO wakil rakyats who were suspended are Silam MP and Parliamentary Secretary to the Entrepreneur Development And Co-operatives Ministry Samsu Abdul Rahman suspended as Silam UMNO Division deputy head, UMNO MP for Titiwangsa Datuk Astaman Abdul Aziz suspended as Wangsa Maju Division head and Melaka State EXCO member for Tourism Heritage And Culture Datuk Amid Nordin suspended as Kota Melaka UMNO division head.

It does not make sense that you can be a Minister even though you are not qualified to hold posts in UMNO. Worse the ACA was not allowed to investigate and take action on such money politics even though it is a corrupt practice. Clearly being an UMNO official requires a higher moral and ethical standard than holding a government post.

Such selective prosecution and double-standards does not inspire confidence amongst foreign investors when the Transparency International said the perception of corruption in Malaysia has worsened with Malaysia sliding from 37^th in 2003 to 39^th in 2004.

Foreign investors have a right to expect timely, transparent and truthful disclosures. Malaysians have a right to expect a more responsible and professional performance from our country’s economic managers!

Good governance as well as a corporate culture of excellence and accountability are important requirements sought by foreign investors. Singapore is a good example how a country without natural resources can fashion itself to be an internationally renowned trade centre by relying solely only on human resources and accepted practices.

Negeri Sembilan Menteri Besar Must State Whether He Expects Total Investment To Recover From The 42% Drop Of RM790 Million From RM 1,844 Million In 2003 To RM 1,054 Million In 2004

Total investment in Negeri Sembilan dropped by 42% or RM 790 million from RM 1,844 million in 2003 to RM 1,054 million in 2004. To date Negeri Sembilan Menteri Besar Datuk Mohamad Hassan has not explained the reasons behind the drop in investment in his state. Neither has he stated his expectations of whether he expects total investment to recover from the 42% drop of RM 790 million this year.

The Menteri Besar had said that he appointed his elder brother to be the State Secretary of UMNO Negeri Sembilan because his brother was not ambitious and could be trusted. Having a trusted person would enable Datuk Mohamad Hassan to focus on economic development and increase investment. Such poor performance in attracting investment in 2004 highlights the failure of his economic management.

Datuk Mohamad Hassan should also apply the four practices of good governance; transparent, timely and truthful disclosure of information; effective action against corruption; and inculcating a culture of excellence and accountability if he is serious about winning foreign investors’ confidence.

Transparency and accountability is very important to show that he has nothing to hide. The Menteri Besar’s rejection in the last Negeri Sembilan State Assembly meeting of 10 questions by Opposition Leader Anthony Loke and 13 questions from DAP Bahau Assemblyman Lim Fui Ming is not only undemocratic. It is also a severe setback to open transparent and accountable government that can win back foreign investor confidence. Datuk Mohamad must admit his government’s weaknesses and not allow the people of Negeri Sembilan to be punished for his policy mistakes or failures.

(30/4/2005)

* Lim Guan Eng, DAP Secretary-General