Commentary Politics

Seeing the future from the Forest

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TheMole
Written by TheMole

By Salahuddin Hisham

THE political argument on China’s foreign direct investments (FDI) has finally reared its ugly head. The true intention is to attack the Forest City project in Johor Baru.

The campaign is the all too familiar foreign bashing and is racially motivated.

But it is not the first time the allegation of selling the country is heard. Countries targeted in the past included Britain, United States and Singapore. Before China became a target, it was the TPP, which means 12 Pacific Rim countries.

Salahuddin Hisham was involved in various financial markets but has since, turned political and online.

Similar allegations were made in the past against one leader after another. Since the general election is drawing near, expect this to continue.

However, the attention on Forest City cannot negate the importance of FDIs as an essential component of economic growth. From 1975 to 2015, FDIs in Malaysia had average 3.79% of GDP. Its contribution to the economy is significantly more.

The FDI market is competitive. Many resource rich countries have emerged post-Cold War. New developing economies are taking up the void left by the now middle income trapped economies like Malaysia.

Even China is opening up to attract more FDIs, doing so through research and development collaborations.

In Malaysia, we are stuck debating whether to impose constraints on FDIs instead of preparing, adapting and adjusting our knowledge, skills, capabilities and innovativeness to meet the new opportunities and challenging landscape.

Attracting FDI means opportunities are brought to the younger generations. They need not leave their family and villages to search for new pastures.

If anti-immigrant is the underlying sentiment in this political debate, it was past manufacturing-driven FDIs that contributed to the current foreign labour dependence.

Since the mid-90s, Malaysia has shifted away from a production based economy to a knowledge-based economy. The main engine of growth has been the services sector particularly in finance, transport, telecommunication, IT and education. Manufacturing is changing from being labour intensive to value added.

It begs the question: Is the former prime minister initiating an anti-immigration wave similar to Brexit, Trump and Le Pen?

Donald Trump’s inauguration will be held this Friday. His statements leading to that day have created uncertainties in the trade, foreign and security policies of the largest economy in the world.

The unpredictable Trump is likely to move away from the experiments in the liberal world order to be conservative, inward looking and protectionist. As a trading nation, Malaysia could be seriously affected, unless it prepares itself.

With the on-going global slowdown, there is hardly any country with sizeable and immediately available FDIs other than China.

The pie is not being made available by too many so we can’t be too choosy. At the same time, we can’t have the cake and eat it too.

FDIs cannot be on our terms only. There must be give and take. Malaysia may have to concede in some areas in order to gain in others. Allowing investments in certain sectors could lead to sizeable investments in others.

Concerns have been highlighted, so the necessary measures need to be put in place. It should be kept professional and not politicised.

To claim that Chinese nationals, equivalent to the estimated number of people who benefitted from the Project IC in Sabah, will be flown in to live in Forest City and acquire citizenship is shocking – propaganda as old as Goebbels.

Investments in property or real estate by foreigners are not new to Johor. At one time, the federal and state governments allowed a neighbouring country to invest in a 53,000-hectare water catchment investment together with security installations.

Thousands of hectares of land were sold to Singapore companies or Malaysian-fronted Singapore companies.

There is also the My2Home programme to attract retired foreigners to buy homes to live in Malaysia.

Rubbishing the government’s initiative mid-stream and quarreling incessantly put the country in a weaker bargaining position. It could deny the benefits from the geographically strategic advantage of the Straits of Malacca.

Instead of politicising the generous FDIs from China, Malaysia should be preparing itself and readying the nation to piggy back on this new wave of investments.

Pak-China Technical and Vocational Institute in Gwadar, Pakistan, is a China majority funded effort to impart specialised skills to locals to operate the deepwater port built and funded by China.

Malaysia should seek such investments from China to train Malaysians in rail and port operations and maintenance. It could also include the services sector that could be exported, like telecommunication and highway project management.

In 2015, Britain’s Imperial College made a trip to China to expand its ties in education, research and innovation. They consummated research collaborations in cutting edge technology and resolved to make Imperial College as China’s best academic partner in the West.

It is time institutions of higher learning look beyond rankings but instead pursue similar opportunities because this helps transform the education system into real life economic applications.

FDI inflow increases with the level of financial development, infrastructure development and trade openness.

The scaremongering is that China’s Chinese will invade and dominate southern Johor. It reflects ignorance of what the world is today. This alarmist misrepresentation of the past and present makes us lose sight of the future.

Peninsular Malaysia has a long history of labour shortage and dependence on foreign labour. Since the days of the Malacca Empire it has been attracting economic migrants. Colonial Malaya brought Indians and Chinese to attend to work in the plantation and tin mines.

It is openness to migrants that allowed a Kerala descendent to be the longest serving prime minister till now.

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