[MGG] The Prime Minister Leaves In Stealth For The United

The Prime Minister did not attend Friday prayers on 1 September 00, as his office he would. He could not. He left the night before for urgent negotiations with an American conglomerate in the United States.

Television news last night (2 September) showed the Prime Minister in formal meetings with the Motorola Inc. topbrass in Chicago. He had hoped to camoflauge this meeting by addressing Islamic groups, but supporters of He Who Must Be Destroyed At All Cost prevented that. An invitation from one Islamic group to address it was withdrawn, and an award from another could well be amidst noisy protestors. Hence his having to leave the country in stealth. The official media no doubt would portray this visit, as every other, a success, but far more serious issues are at stake. It raises fundamental doubts about future foreign investment, with foreign companies already here negotiating for more tax breaks and investment incentives than allowed. This urgent meeting with Motorola follows hard behind-the-scenes bargaining after it decided to shift its Malaysian operation to Vietnam and Malaysian officials wanting to retain Motorola. Malaysia blinked, provided Motorola with fresh incentives, but its key officials would not come down to initial the agreement. So, the Prime Minister rushed to Chicago instead. And a company which already taken advantage of all Malaysian investment breaks is given them afresh to continue to invest.

Malaysia lost significantly when Ford and General Motors, after difficulties in establishing plants in Malaysia, moved on to the Philippines and Thailand. Malaysian officials continue to deny it but Ford officials were in Kuala Lumpur earlier this year to negotiate for a stake in Proton, the Malaysian car manufacturer. The General Motors deal apparently failed when Malaysian officials insisted upon one influential son-in-law as its local partner. Officials reeled in shock when they left. The two companies and many more, as part of the globalisation, position themselves in regional markets to take advantage of lower tariffs and fewer protecticionist pressures. Malaysia is caught in a bind.

The Philippines, Thailand and Vietnam strengthened their infrastructure to take advantage of the Asian Free Trade Area rules, and Thailand is upset that Malaysia wants to push further forward the 2002 deadline to reduce by 35 per cent the tariff barriers for motor cars. The Motorola decision to move to Vietnam, with all its setbacks and backwardness, proves Hanoi's success in weaning foreign investment. It does not have the infrastructure but has the skills. Malaysia, on the other hand, has the infrastructure without the skills. Even the earlier sales pitch of an English-spakeing workforce is not true; even their officers cannot articulate in it. The Multimedia Super Corridor, with all its bells and whistles, is impressive, but its importance is now in property speculation than an Asian Silicon Valley. We are only told how land prices in it have gone up, not in how many countries have relocated from elsewhere to take advantage of it.

Malaysia in recent years lived on its laurels. The official arrogance, the we-know-it-all view of the world, the others-are-stupid syndrome, an authoritarian administration that brooks no dissent, and the belief that its ill-thought out panacea for Malaysia's is the only one has reduced this once proud nation to beggary. This comes from the absence of a strong opposition. The customary debate that framed these policies is absent even amongst officials. The minority view strengthens the majority's focus. Sunni Islami is all the more dominant because the vibrance of the minority Shia Islam keeps it in check.

The Malay community, which it thought it had proprietary rights over, is deeply divided, with the more important cultural heartland moving away from it.

The Malaysian government is in a tailspin because it now has to contend, after 40 years of no challenge, with the forces of a man who sits in Sungei Buloh jail. Every move it takes is with an eye to what he or his supporters have in store. But because this challenge comes at the tail end of decades of autocratic dominance, the government does not know how to react. It bolts the barn door each time after the horses have fled. In all aspects of governnance. This and thoughtless action ties it in ever-tightening knots.

Which is why the Prime Minister dousing fires as they flare cannot work. Other foreing investors with expansion plans would demand similar terms as Motorola, and move if other countries give bettter terms. Malaysia was once attractive for investment; it is, to a foreign investor, no more. Indeed, Vietnam has the skills -- it is already the preferred choice for computer programmers; they are cheap, good, and fast -- even if the United States bombed its infrastructure into the Middle Ages in a failed bid to conquer it. Thailand has become a more attractive place for foreign investment because the hassles of setting up a factory is not as politically loaded or bureaucratic as in Malaysia, with the added bonus of efficient workers. Political and racial divisions inhibit that in Malaysia. So, in reality, Malaysia, after its initial years of stupendous growth, is brought to a halt by the fallout from that growth and the arrogance that spawned. Our recent history, especially under the Mahathir years, is choked with the remains of sogososhas, privitisation, destruction of the banking system, the institutions of government, mega projects that could not turn in a decent return of investment and remain a continuing drain on the Treasury. And we now pay the price for it.

M.G.G. Pillai
pillai@mgg.pc.my