IN the 1970s and 1980s, the Philippines was known as the “sick man” of Asia because of its poor economic record and unwillingness of foreign companies to invest in the country under the dictatorship of Ferdinand Marcos. Even after the fall of Marcos in 1986, it took the Philippines decades before foreign investors returned to the country.
Is Malaysia in danger of going down the same path and be seen as the new sick man of Asia in the 2020s because of political ineptitude and the inability to manage the Covid-19 crisis under the Perikatan Nasional (PN) government?
The inability of the PN government to manage the third wave of Covid-19 cases has resulted in a second movement control order (MCO) at the start of this year.
At the same time, new data has emerged, which shows a significant decline in foreign investor confidence in Malaysia. According to the January issue of the United Nations Conference on Trade and Development, it was reported that foreign direct investment (FDI) inflow to Southeast Asia fell by 31% to US$107 billion (RM433 billion) last year.
While a fall in FDI inflow into the region last year was not surprising, given the impact of the pandemic, what was shocking is the fact that FDI inflow to Malaysia fell by 68% compared to Singapore (-37%), Indonesia (-24%), Indonesia (-10%) and Thailand (-50%).
FDI into the Philippines, no longer the sick man of Asia, actually rose by 29% last year.
These figures are actual FDI inflow to the respective countries unlike the FDI figures announced by Finance Minister Tengku Zafrul Abdul Aziz earlier this year, which are only approved investments and not realised ones.
Malaysia’s poor performance in terms of actual FDI inflow last year was reported by many local publications and would no doubt have been picked up by the foreign press. At the same time, reports on some multinational companies moving their regional headquarters out of Malaysia to places like Indonesia have also created the image that Malaysia is no longer an attractive place for foreign investors.
These reports play in a part in building the larger narrative that Malaysia is lagging behind our neighbours on many fronts – not being able to manage the Covid-19 crisis, being plagued by political instability, having an incompetent cabinet, and flip-flopping on government policies in ways that damage the business environment.
While these negative reports have been circulating for the past week, the international trade and industry minister has not issued any statements to address this issue or to counter the negative narrative that is plaguing the country’s image domestically and internationally.
Just as he was inept at managing his portfolio when he was economic affairs minister in the Pakatan Harapan government, he is proving himself equally (if not more) inept in his current position.
With this kind of economic and political leadership under the PN government, it would not be surprising if Malaysia finds itself being labelled as new sick man of Asia. – The Vibes, February 1, 2021
Ong Kian Ming is Bangi MP and assistant political education director for DAP
