Tuesday, November 21, 2006


On November 4, 2006 Prime Minister Dato Abdullah Ahmad Badawi unveiled the blueprint for Iskandar Development Region (ISKANDAR). It is hoped that the 2500 sq.km zone would turn Johor into a world class business hub to be on par with Hong Kong and Shenzen in China.

The plan is to turn ISKANDAR into a business haven with high tech industries and the building of international theme parks, a water front city, a medical park and educational facilities. This in turn is expected to spur migration of manufacturing companies from Singapore and the region to Johor. To attract Singaporeans and foreigners, there will be an area designated as Free Access Zone (FAZ) which would allow foreigners and primarily Singaporeans to enter, live and work in the FAZ with no passport, immigration and custom clearance. Infact foreigners could also live in FAZ but travel to work in Singapore.

However, for five days potential investors saw the worst manifestation of negative, divisive and destructive and piquant polemics, enough to make any potential investor to give ISKANDAR (and Malaysia) a miss. What was on display for potential investors was sabre rattling talk, bone chilling warnings and blood curdling speeches where speakers without mincing words targeted and directed their anger against the Chinese. Then there was act of kissing the unsheathed keris (a recent phenomenon in the UMNO general assembly) seen as an adversarial act. Perlis delegate openly questioned “Dato Hisham has unsheathed the keris, waved the keris, kissed his keris. We want to know when is he going to use it”. UMNO exco member Datuk Azimi Daim warned ‘ when tension rises, the blood of Malay warriors will run in our veins”. Malacca delegate Hasnoor Sidang proclaimed that UMNO’s willingness to risk lives and bathe in blood. Other speakers talked about becoming amok if their rights were questioned.

For ISKANDAR to succeed it will naturally require participation and investment from foreigners and particularly Singaporean Chinese. However, after hearing all this incendiary language and watching open display of kissing an unsheathed keris would they still be attracted to investing in ISKANDAR? Would it not be wrong for them to believe that there is something seriously wrong in Malaysia and that their investment maybe safer elsewhere.

The question now is in the aftermath of the recently concluded UMNO general assembly would foreigners be interested or even be attracted to invest in ISKANDAR? Delegates who were spewing venom against the Chinese forgot to realize that investors require not only a condusive business environment but also an environment which provides safeguards for their business, personal property and their lives. Singaporean Chinese have not forgotten the destruction of Chinese businesses and bloodbath against the Chinese during the riots in Indonesia during the Asian financial crisis.

In the case of Johor, there is no denying that the Johor economy is to a large extent dependent on Singaporean investors and particularly Singaporean Chinese. For ISKANDAR to succeed it will very much dependant on Singaporean Chinese investors. The Singapore and Indonesian government are in advanced stages of setting up special economic zones in Indonesia particularly in the Riau Islands of Batam and Bintan.. After listening to the blood curdling threats against the Chinese and the sinister connotation of the act of kissing an unsheathed keris, would foreigners and particular Singaporean Chinese investors be keen to invest or even live in ISKANDAR ?

The speakers who warned about bloodbath and running amok forgot to realize the threat posed by Vietnam. Vietnam is fast rising and is seen as an alternative to China. For the investor and particularly Singaporean Chinese why would they want to risk their investment in Malaysia. Instead Vietnam in comparison may now be seen not only as an attractive and viable alternative but more importantly a safer option for their investment. For all the sufferings done by the American to the Vietnamese, Vietnam does not begrudge or threaten Americans or their investments.

Watching delegates lapping-up to inflammatory speeches against the Chinese and the adversarial act of kissing keris which received vociferous applause, gives any potential investor an impression that all is not well in Malaysia and that there are percolating undercurrents awaiting to implode. Already Malaysia is suffering from a drop in Foreign Direct Investment and if investors had doubts about Malaysia, the five day ransfest may have convinced to give ISKANDAR a miss. That is a real pity because in truth ISKANDAR could succeed.

In the rush to score sectarian points, UMNO delegates forgot that in a globalised economy, the last thing an investor need is a climate of fear and danger.

ISKANDAR, unfortunately may have to pay the price for the piquant polemics.

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