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Boom or Gloom in Malaysia?

Updated On: Feb 27, 2007

There has been a flurry of good news on the economic front.

The Malaysian trade surplus was over RM108 billion in 2006, continuing nine years of trade surplus. The total value of trade has exceeded RM1 trillion, the highest ever. The Malaysian currency is at an eight-year high of RM3.49 against the US dollar. Total Investment has reached RM46 billion in 2006, an impressive increase of 48% over the previous year.

Now even Malaysia’s neighbour, Thailand is hoping for a piece of the growth. Thai Prime Minister is urging Malaysian businesses to invest in south Thailand. He explained, “This is a great opportunity for Malaysia to invest in southern Thailand, because some foreigners would hesitate to invest there… But, for Malaysia, it is an area in which you have common ethnicity and a common religion.” Both Thai and Malaysian governments have set up a Joint Development Area along the borders and are planning to establish an industrial park and electrical transmission linkages.

While Thailand is trying to woo Malaysian businesses, Malaysian Prime Minister Abdullah Badawi is hoping to attract businesses to Malaysian’s southernmost state, Johor. The hopes are that Johor would be transformed into a metropolis similar to China’s Shenzhen or Hong Kong. A massive project, the Iskandar Regional Development Region, which covers an area of 2,217 square kilometers, has been planned in Johor. Badawi told reporters after the inaugural meeting of the Iskandar Regional Development Authority, “Our 20-year plan is to attract US$105 billion, and RM50 billion in the next five years.” 

Thus far, Johor has attracted RM20 billion, including signing up the luxury Aman Resorts and the no-frills Tune Hotel. A high-profile advisory panel which includes tycoon Robert Kuok and former deputy Prime Minister Musa Hitam, has also been formed to provide pointers on the Johor development.

Despite all these signs of a booming economy. Doubts have been raised over the accuracy of some of the figures. Opposition Leader Lim Kit Siang questioned the record-high FDI figures of RM20.2 billion announced recently by the Trade Minister Rafidah Aziz. He cited the figures in the report of the United Nations Conference on Trade and Development (UNCTAD) which put FDI into Malaysia as RM13.8 billion and asked for explanation from the government’s figures on the discrepancy in these figures. 

Regardless of whether the economic picture is as rosy as the Malaysian government is trying to paint it, there is little doubt that there is a strong rally in the Malaysian stock market. The benchmark Composite Index of Bursa Malaysia hit a 13-year high with a total market capitalization crossing the RM1 trillion mark. The bullish momentum in the stock markets look set to continue, according to an editorial in Business Times Singapore.  Yet, even the rally was not without controversy as some opposition alleged that the Malaysian government had artificially push up the stock market.

While the rising economic tide is likely to lift most boats, the Malaysian federal government has other problems to concern itself, not the least over over-zealous state governments in pursuit of “religious morals”.

The Terengganu state government was planning to hire spies to catch Muslim couples in compromising positions or committing khalwat (or close proximity). This controversial plan has created such uproar in Malaysia that even Badawi who had been overseas (in Indonesia) was forced to comment on it. He said, “We do not need to form groups for spying because if there is anything bad happening, there are laws on indecent behaviour in public places… if we want to go around spying on others, this can be seen as an intrusion of privacy.”

A rising economy is usually good news. However, if the Malaysian government wants the country to really rejoice, it still has to stay vigilant over creeping religious conservatism that is creating tensions and divide within the plural society.  (26 February 2007)

Sources:

KL Rejects Doubts Over Glowing Economic Data (The Straits Times, 26 February 2007)

PM Urges Malaysians to Invest in Deep South (The Nation, 25 February 2007)

Thai PM Hails Very Good Bilateral Ties Between M’sia and Thailand (Malaysia General News, 24 February 2007)

Johor Economic Zone Pulls in $8.7b Worth of Investments (The Straits Times, 24 February 2007)

M’sia’s Billion Dollar Confidence (Today, 24 February 2007)

Who Needs ‘Snoop Squads’ In Malaysia? (Today, 23 February 2007)

Bulls Rampant in KL Exchange (The Business Times Singapore23 February 2007)

PM: Economy Doing Well, It’s No Artificial Push (New Straits Times, 23 February 2007)