MCCI: Take My Advice!

Lee Wei Lian reports this from the Malaysian Insider today (21 January 2010).

The country’s oldest business association,the Malaysian International Chambers of Commerce and Industry (MICCI)has given its 5 sen advice to the government.

What are these?

PAY ATTENTION to foreign equity limits, environment and security standards, and infrastructure particularly broadband communications if you want to boost you flagging foreign direct investment. Harsh,don't you think?


Stewart Forbes, executive director MICCI did not mince his words. Make a choice then take big bold strides to a new economy or be left behind to remain a middle income country by more aggressive emerging economies. In other words, be a thorough-breed horse at Ascot or be a poor donkey in the backwaters,by and by.

Let us look at his priority pickings.

i) Broadband-target a 50 per cent penetration rate by this year.

It must be international standards. Currently, the ICT infrastructure is a limiting factor and doesn’t meet the needs of high tech industries.

Malaysia way way up front when it began its Information Communication Technology (ICT) drive in the 1990s viz the launching of the Multimedia Super Corridor that stretched from Kuala Lumpur’s business district to the new administrative capital Putrajaya and Cyberjaya, its centre for the IT sector. But like the proverbial hare, it slept while other countries in the region leapfrogged Malaysia to provide better broadband and other IT facilities.

ii) Stop protecting local industries. continue this protection and you cannot reform the economy, much less open it up to foreign investors.

Malaysia is currently struggling to move up the economic value chain but the government has traditionally dragged its feet when faced with making difficult decisions such as the introduction of minimum wages, removal of subsidies, the phasing out of uncompetitive industries and the implementation of meritocracy partly to avoid upsetting its voter base and partly due to its aversion to risk.

This tendency to avoid reforms in the past could also explain why Malaysia’s development remains relatively stunted when compared with regional economies like Singapore, Taiwan and South Korea despite having a head start in education and infrastructure and the added bonus of plentiful natural resources.

The whole world is sceptically watching out for the new economic model to be unveiled in February 2010. This model is expected apparently to address some of the structural issues plaguing the country. Will the current government have a will of steel politically to see it through?

“If you want 100 per cent protection, you cannot do major changes but can only do tiny changes,” says Forbes.The time to take baby steps is well nigh over,Mr. PM. Baby, you need BIG STEPS here and now!

“Everyone is moving fast now,” he added “If you move too slow, you will be overtaken.”

iii) Talent Search. Forbes also suggested that the country look to importing the talent it needs in order to scale up its skills capacity and highlighted the difference in the number of expatriates in Malaysia and its neighbours.

He said it is easier now than before to bring in expatriates but the number, currently about 38,000, is still “critically low.”

He added that he heard of a case where the Singapore government declined to give one expatriate a work permit but offered a permanent residency instead.

“Singapore is saying: ‘Let’s lock talent into our gene pool’,” said Forbes.

So, Malaysians-take heed and start running doubly fast as you need to be the quickest hare to win this game now!