Investors find Opposition open for business

KUALA LUMPUR, March 22 – For the past week, businessmen from government-linked chiefs to those who run the country’s small-and-medium sized industries have been making a beeline for the 26th storey of the Komtar building in the heart of Georgetown.



Their date was with Penang’s new chief minister Lim Guan Eng and they wore anxiety on their sleeves. Anxiety because they were moving into unfamiliar territory, dealing with a greenhorn chief executive of a loose alliance with little experience in governing a state, let alone the country’s manufacturing hot spot. Halfway into the meetings and the fear is replaced by hope.


Lim Guan Eng, they found out, is hungry for investments.


He wants the Federal Government to fast-track the Second Penang Bridge, continue with plans to build the monorail and pump more money into the state. He promises businessmen that tenders will be more transparent and that as long as their projects bring benefit to Penang, they will be given the red carpet treatment.


Says an executive of a government-linked company: “There was no hesitation on the CM’s part to listen to our ideas for development.’’ Similarly, another businessman who met Kedah’s PAS Menteri Besar last week said that the 60-minute session was spent on discussing projects and not on religious do’s and dont’s.


It is still early days but there is less trepidation that the Malaysian economy will grind to a halt now that 5 states are under the control of PKR-DAP-PAS.


To be sure, investment banks are still taking a wait-and-see approach, wondering how the BN-controlled federal government will deal with the states, especially with daily stories of potential defections and questions on Prime Minister Datuk Seri Abdullah Ahmad Badawi’s longevity in the top job.


But there are several reasons why it could be business as usual around Malaysia.


The federal government will not shut off the pipeline to these states. Selangor alone contributes 30% of the country’s Gross Domestic Product. Abdullah cannot hope to get 6% national growth this year if they stop infrastructure projects or choke off investments to the state.


As S. Jayasankaran of the Singapore Business Times wrote: “Even if Mr Abdullah was pushed aside, no new prime minister would dare exclude the 5 Opposition-held states from development… cutting them off would imperil the national economy.’’


For the Opposition, keeping investors happy and the wheels of the economy moving will decide if their stay in power is going to be a touch and go affair, or something more permanent. There is little doubt that Malaysians are excited by the prospect of a 2-party system developing but all ideals will be junked if talk is the only currency flowing in Kedah, Penang, Perak, Selangor and Kelantan.


That is why PAS’ Husam Musa has been telling his party men to go easy on strident talk and focus on making things easy for businessmen. The PKR-DAP-PAS alliance hope that if they reduce opportunities for corruption and remove administrative humps, even the doubters will be won over by the time the next polls are held.


Another lubricant for business as usual is the royalty.


The royal households in Selangor and Perak are business-friendly and have interests in a wide range of areas. They would frown on any move by the new governments to allow politics to bring trade to a halt in their states. For example, the new Selangor MB Tan Sri Khalid Ibrahim has signaled that the water transfer project from Pahang to Selangor will go on unimpeded.


Still, a few curveballs could throw off even the best-laid plans. A slowing world economy would be bad news for one of the world’s leading trading nations. Also, some of the biggest problems with Malaysia’s delivery system have been linked to its 1 million civil servants. No doubt that there are different political masters in 5 states but the same public servants who were impediments to change are still occupying the same places.


How Lim Guan Eng, Khalid Ibrahim and friends deal with these little Napoleons will be interesting. For the time being, though, even some of the country’s best-known businessmen are willing to give the new boys in power the benefit of doubt.


One of Malaysia’s most prominent businessmen has been telling friends this week that it had become impossible to deal with avaricious Umno politicians in the last few years. They demanded a bigger slice of any project and had become so arrogant.



He is looking forward to dealing with less “demanding’’ politicians in the 5 states. – THE MALAYSIAN INSIDER