Mahathir is old, but not stupid

He has a point about the problem with selling off property to foreigners.

COMMENT

By TK Chua

Suddenly Tun Mahathir was accused of not being able to understand the difference between foreigners owning land in Malaysia and Malaysia’s sovereignty.

The prime minister of 22 years has become “stupid” in the eyes of many who at one time had never failed to queue up to kiss his hand.

Sadly, I think the stupidity is the other way round. Those criticising and belittling Mahathir now are in actual fact the ones who are genuinely stupid.

I don’t think we can ever interpret what Mahathir said, in the literal sense. Of course, foreigners owning large swathes of prime lands will not affect Malaysia’s sovereignty in the immediate term.

But if the whole area is carved out exclusively for foreigners from a particular area, may I know what kind of development model is this? How will this affect the interests of ordinary Malaysians in the future? How would this affect the independence and future administration of the country?

Unfettered purchase and ownership of lands and real estate would unequivocally push the prices beyond the reach of most Malaysians, including the middle class.

How could Malaysians ever compete with the rich from China in terms of wealth and purchasing power? Five to 10% of the wealthy from China are probably equivalent to the population of the whole of Malaysia. Is there any wonder why the prices of real estate are escalating far beyond the reach of most Malaysians?

Foreign direct investments (FDI) into manufacturing and services are very different from FDI into land, real estate and infrastructure. The former creates and increases Malaysia’s productive capacity in terms of employment generation, transfer of technology, exports, and foreign exchange earnings. It also helps in generating higher-paying jobs.

FDI into land, real estate and infrastructure, on the contrary, means selling off national assets.

Ownership changes hands, from Malaysians to foreigners. We get one-time proceeds from sales but there will be no recurring income.

In fact, selling off infrastructure, like energy generation plants, ports, and railroads will result in Malaysians paying foreigners for the use of facilities within their own country. Instead of export earning, there will be an outflow of funds.

Dr Mahathir Mohamad may be old, but he is certainly not stupid.

TK Chua is an FMT reader.