1MDB weighs on gov't acceptance of foreign investment

The 1MDB scandal is still impacting the government it seems, weighing on Putrajaya's considerations in accepting new foreign investments.

Speaking at a press conference in Kuala Lumpur today, Entrepreneurship Development Minister Mohd Redzuan Yusof said countries such as Bahrain, Russia and others which he declined to name were keen for their respective sovereign wealth funds to invest in Malaysia.

He said these included funding infrastructure projects such as ports or setting up joint investment funds that could benefit small and medium enterprises.

However, he said Putrajaya was cautious about taking in foreign money, admitting that one concern was money-laundering.

"We need to be sure, we need to get clearance from Bank Negara.

"We need to make sure they (the foreign sovereign wealth funds) are not involved in money-laundering schemes," Redzuan said without specifying which wealth funds the government was concerned with.

The minister's remarks come over a year after Pakatan Harapan ousted BN from power. BN's downfall had been partly due to the 1MDB scandal.

Authorities in Malaysia and the US believe that over US$4.5 billion in 1MDB funds were siphoned and laundered allegedly for the benefit of individuals such as fugitive businessperson Jho Low and former prime minister Najib Abdul Razak.

The scandal put a spotlight on global banking regulatory practices as well as the conduct of other sovereign wealth funds in countries that lack government transparency.

For Redzuan, however, caution appeared to be a possible hindrance to the economy.

"If we look at similar joint development funds (set up by foreign sovereign wealth funds) there are already several in our region but we are not a party to them," he said.

He said a lack of response from Bank Negara and Khazanah Nasional to these potential deals were also putting off investors.

"Some of these funds are shying sway because there is no response," he said.

Redzuan was speaking to reporters after delivering a keynote address at the Malaysian Economic Summit 2019 in Kuala Lumpur.

In his speech, Redzuan said the lack of financial and human capital was hurting local SMEs.

The minister said Malaysia ranked 26th in global innovation but 50th in entrepreneurial development.

"There is innovation in this country [...] but we are not creating an environment for them (innovators) to thrive in," he said.

The government was trying to resolve this matter with Prime Minister Dr Mahathir Mohamad expected to launch the National Entrepreneurship Policy (DNK) next week, he added. - Mkini