Vision 2020: Derailed by racial, religious politicking not FDI

Wong Choon Mei, Malaysia Chronicle

Former premier Mahathir Mohamad is right in warning that Vision 2020 will be not be achieved, but the reason is not due to Malaysia’s reliance on foreign direct investment, rather it will fail because of the incessant racial and religious politicking in the country, pundits said on Thursday.

“Tun Dr Mahathir is absolutely right in that Vision 2020 cannot be achieved based on the current outlook, where foriegn investors do not regard Malaysia as a prime destination anymore,” Ramon Navaratnam, chairman of the Asian Strategy and Leadership Institute, told Malaysia Chronicle.

“We as Malaysians therefore urge him as an elder statesman to show the leadership in guiding the country towards a more conducive and harmonious environment for both the citizen and the investor. Tun Mahathir can play a leading role in stopping the religious and racial bigotry that is now clearly undermining both our society and economy.”

Vision 2020 to stay a vision, ETP pie-in-the-sky

The 85-year old Mahathir had on Wednesday warned Prime Minister Najib Razak’s administration that it was moving in the wrong direction by chasing after foreign funds. He said Malaysia should emphasize on domestic direct investments and cited the example of South Korea.

Dr Mahathir - savior or troublemaker

His remarks were immediately rebutted by Minister in the PM’s Department Idris Jala.

“I believe that we can achieve Vision 2020 by 2020. I agree with Dr Mahathir that we must change the strategy. That’s why the Economic Transformation Programme is necessary,” Idris said. “I agree that we must change to domestic investments.”

Vision 2020 was a socio-economic plan introduced by Mahathir in 1991 to transform Malaysia into a developed nation by 2020. It also sought to create a Bangsa Malaysia. The ETP unveiled by Idris last week is a RM1.4 trillion package of investments spread over 20 years to transform Malaysia into a developed nation by 2020.

However, the ETP has been heavily panned for being pie-in-sky because no details as to how and from whom the government could secure the RM1.4 trillion of funds. It should also be noted that Idris himself had a few months ago pointed out that Malaysia would go bankrupt in the same manner as Greece if the government did not immediately cut subsidies on consumer essentials and raise prices.

Pundits also point out that in 2009, FDI to Malaysia plunged 81 percent. A lot of that outflow was also due to Malaysian firms investing in foreign countries.

“FDI will always be an essential of source of funding for Malaysia. Without the foreigners coming in, how do we gain new technology and how do we access new markets overseas? The thing is, it would be tough to convince the foreign investors when the locals themselves are moving out,” Ramon said.

"I do hope that Tun Mahathir will recognize the importance of FDI because these have helped countries like Korea, Taiwan and China make the jump into highly-industrialized status. Even today, they are hungrily scouring for more FDI."

Racial and religious politicking

Another prominent corporate personality Azman Hashim, founder and chairman of the AmBank group, has also warned against using racial and religious issues to win votes as these have scared investors away.

Banker Azman Hashim

“When investors see me their first question is not how is your economic outlook, but what is the prospect of political stability and racial and religious harmony? Some use politicisation of race and religion as game cards to win political favour,” said Azman.

Indeed, since Najib took over premiership in April 2009, Malaysia has experienced some of its worst episodes of racial and religious bigotry. Early this year, ultra-Malay rights group Perkasa was formed with Mahathir as its patron.

The group has been featured in many top overseas financial reports and publications as reflecting the views of the Umno conservatives, who form the bulk of its membership. The perceived lack of political moderation in the ruling party has been cited as a key factor why Malaysia is no longer able to compete for FDI or regarded as a "stable" country.

“Mahathir is the one causing all the trouble and everyone knows it. He doesn’t want anybody to mess around with the outdated systems he set up decades ago. Now to cling to power, he is playing the race and religious card to hilt," PKR strategic director Tian Chua told Malaysia Chronicle.

"Of course, FDI won’t come in. That’s why he is saying, don’t chase for FDI. With him and Perkasa around, frankly, which investor would take the risk? Political stability is a must for investors. Then healthy competition, and costs that don't get bloated up because of corruption. Does Malaysia, as she is now, satisfy these criteria?"