PETALING JAYA – Foreign Direct Investment (FDI) is not just about investment in the manufacturing industry alone as the country has outgrown that model, said Datuk Abdul Rahman Dahlan.
In response to Tun Dr Mahathir Mohamad’s criticism of the Forest city project, the Minister in the Prime Minister’s Department said in order for Malaysia to progress into a high income nation, the country needs to develop other industries as well, particularly the services sector.
“In most developed countries, the services sector contributes as much as 80% of the employment and their Gross Domestic Output.
“In an effort to break out from the middle income trap and provide higher income jobs, particularly knowledge-based jobs, for Malaysians, the Government had made a deliberate effort to develop the services sector and rebalance our economy,” said Abdul Rahman, adding that this effort by the Government has been going on since 2009.
Dr Mahathir in his criticism said that FDI was supposed to be about investment in the manufacturing industry instead of the sale of land in the country to foreigners.
He further claimed that FDI gained through the sale of Malaysian land to foreign companies would be detrimental to the country, unlike FDI in the manufacturing industry.
Dr Mahathir’s comments have been called an exercise in “fear-mongering” by Johor Ruler Sultan Ibrahim Ibni Almarhum Sultan Iskandar.
In a no-holds barred interview with The Star on Monday, a visibly upset Sultan Ibrahim singled out the former premier for “putting political interests above Malaysian interests, particularly Johor”.
“Let me ask him this – Forest City is to be built on reclaimed land and most of these units are condominiums. In simple language, these units are up in the air. They are strata units.
“I would like to ask Dr Mahathir if these foreign buyers can just take their apartments back home or carry off an inch of the reclaimed land,” Sultan Ibrahim said.
In his statement on Saturday, Abdul Rahman accused Dr Mahathir of being “stuck in the past”, adding that Malaysia has outgrown an economy solely based on low-cost manufacturing and needs to diversify into other industries.
“Mahathir needs to understand that Malaysia has out-grown that model and we can no longer compete based on low-cost manufacturing industries as this would mean to continue depressing Malaysian salaries and income, a chief complaint of Malaysians before 2009.
“It is sheer insanity to keep on doing the same thing and expecting a different result,” he said.
He added, however, that the manufacturing industry in the country was still receiving FDI.
“Malaysia still places high importance on the manufacturing sector.
“However, the Government has become more selective in what type of FDI in manufacturing it wants here and prefers high value-added manufacturers with a high degree of automation that is vertically integrated that takes advantage of our extensive infrastructure and the advantages that Malaysia offers,” he said.
He also said that the Federal and Johor governments will continue prioritising the welfare of Malaysians.
“Although land is a state issue, there are enough laws and regulations at both the state level and Federal government that will act as checks and balances on foreign investment.
“The Johor state government and the Federal Government will never allow the rights of Malaysians, especially the Bumiputra population, to be encroached on.
“This is a promise we intend to keep,” he said.