Fewer seeking second home in Malaysia
Falling number reflects KL's struggle to compete for foreign talent
By Carolyn Hong, Malaysia Bureau Chief
Penang island, with its beaches and historical town centre, draws the most number of Malaysia My Second Home programme applicants from Europe. But the programme has seen a falling number of successful applications over the last three years. -- PHOTO: THE STAR/ASIA NEWS NETWORK
KUALA LUMPUR: The red carpet has been rolled out for wealthy foreigners to make Malaysia their second home, but fewer people seem to be making a beeline for it.
Data from the Malaysia My Second Home (MM2H) programme shows the number of successful applications falling by half in the last three years since it reached a high of 2,600 in 2006.
MM2H was formerly known as the Silver Hair programme for foreign retirees, but it was overhauled and renamed in 2002 to widen its target to wealthy foreigners in general.
Applicants who are below 50 years old must have liquid assets of at least RM500,000 (S$204,000) and RM10,000 in monthly income earned from abroad.
Those aged 50 and above need assets of RM350,000 and a monthly offshore income of RM10,000.
A report on Malaysia's workforce by Citigroup, an investment bank, noted that Malaysia could be losing its appeal as a place to live in.
Tourism Malaysia chairman Victor Wee, however, blames the decline on the fact that the authorities are taking a closer look at candidates.
He said that in the past, many applicants tried to use it as a foothold by which to gain work, while some had even lied about how much money they had, using fake bank statements.
'In the earlier years, some of the people who came were not those that we targeted,' Mr Wee said.
'We are in the process of adjustment. We now have a lot of interest from Britain, Japan, South Korea and Australia, and a growing interest from Iran.'
Penang island, with its beaches and historical town centre, draws the most number of MM2H participants from Europe.
MM2H is often seen as a tourism sideshow because of its small numbers, but it has a greater significance. This is because the scheme sells Malaysia as a desirable long-term second home.
The issue of Malaysia's appeal to foreigners has become important to the government after it acknowledged that it needed foreign talent to drive its stagnant economy forward.
Prime Minister Najib Razak raised the topic during a speech to Malaysians living in Singapore recently. He told them that Malaysia needed global talent - whether Malaysians who live abroad or foreigners - but it faces stiff competition.
'We will create more opportunities, more excitement and more buzz in Malaysia to attract the Malaysian diaspora and expatriates to the country.'
The World Bank's Malaysia Economic Monitor recently noted that only a quarter of Malaysia's workforce of 12 million comprised skilled labour.
This has become a serious obstacle as the bank's investment climate assessment report in 2007 found the shortage of skill to be the main concern of employers.
Malaysia is belatedly trying to tackle this problem. It has tried various measures with limited success.
Pouring money into tertiary education has not produced the desired results. The drive to churn out graduates in large numbers came at the expense of quality.
The struggle to retain local talent has been equally difficult as they were wooed away to developed countries.
The country has tried to fill the gap with foreign talent but efforts had been marred by complaints of bureaucracy and prejudices against certain nationalities. The government has pledged, yet again, to relax immigration policies.
Datuk Seri Najib had announced in his maiden Budget that the family members of skilled workers will get visas within 14 days, and that foreign men married to Malaysian women will get permanent residence.
But will they come? The Citigroup report noted that beyond easing immigration rules, equally important factors are the business environment and living conditions.
Malaysia has undeniably fallen behind in this respect. The Citigroup report highlighted two surveys which show Malaysia's ranking to be below expectations.
Mercer's 2009 Quality of Living survey ranks Kuala Lumpur at 75 out of 215 cities, unchanged from the year before even as Jakarta is moving up. A.T. Kearney's Global Cities Index saw KL ranked 40 out of 60 cities.
'KL's weaker rankings versus that of its regional peers could place it at a disadvantage when vying for foreign talent,' the Citigroup report noted.
Malaysian Employers Federation executive director Shamsuddin Bardan was recently quoted on a website as saying that Malaysia's ability to attract expatriates is being challenged.
He said it now has about 38,000 expatriates compared with 80,000 in the 1990s.
That decade was unusual, however, because massive construction projects like the Petronas Twin Towers and KL Towers attracted short-term technical expertise.
Malaysia's image abroad has taken a bashing in recent years. The crime rate is often blamed, but it has also been marred by controversies over moral policing and religious disputes.
Mr Andy Davidson, an expatriate who has lived in Malaysia for more than 20 years, told The Straits Times that there is some paranoia in the West concerning Muslim countries.
It does not help that Malaysia keeps making international news for cases like that of Ms Kartika Sari Dewi Shukarno, who was ordered to be caned for drinking beer.
Mr Najib found that out first-hand when he was in New York last month to meet foreign investors.
'One such issue and it takes us months to clear it up,' he was quoted as saying in the New Straits Times.
The good news is that the government is swinging into action to fight crime, with some early success.
It is also building a new economic zone from scratch in southern Johor.
It will have to move fast to show results.
Keep an eye on the MM2H for a glimpse on whether it is succeeding.
India faces 'water wars'
Experts warn of more violent protests if perennial shortages are not addressed
By P. Jayaram, India Correspondent
NEW DELHI: Indian cities may be heading for 'water wars' if the country's perennial shortages are not addressed, experts warned.
The protest in Mumbai on Thursday by hundreds of people against a stringent water cut is a sign of things to come, they said.
One person was killed and more than a dozen were injured in the financial capital when police used batons to disperse the protesters outside the Mumbai Municipal Corporation headquarters.
The capital, with a population of 16 million, had announced that a steep water hike was in the offing.
'Sources (of water) are fast depleting and there is serious mismanagement in the distribution of water in the cities,' said Mr R.K. Srinivasan, a water expert at the Centre for Science and Environment (CSE), a Delhi-based research and advocacy organisation. 'What we saw in Mumbai and some other places is just the beginning of water wars which will intensify in the years to come.'
He said a CSE survey three years ago found that 33 per cent of the water was lost during distribution in Mumbai, while 47 per cent of the water supply was lost in New Delhi because of old and leaky pipes.
While mismanagement of water has always been a problem, this year it has been compounded by a sharp drop in rainfall. This year's level of monsoon rainfall is said to be the lowest in decades.
The shortfall in Maharashtra state, of which Mumbai is the capital, is so bad that the Municipal Corporation had to announce water cuts of 15 per cent for residential users and 30 per cent for commercial users. The cuts came into effect on Oct 28 and would be in place till July 2010.
According to official estimates, almost half of the 604 districts across the country are affected by drought, resulting in an influx of job seekers from the rural areas to the cities.
Mr Rahul Narvekar, a spokesman for Shiv Sena, which controls the Municipal Corporation in Mumbai, said the city was catering to the needs of 15 million people but has the capacity to provide water to only nine million.
But CSE's Mr Srinivasan said the problem applied to all Indian cities. 'Urban centres now account for 27 per cent of India's population and it will increase to 50 per cent in 20 years, putting further pressure on resources.'
Already, cities like New Delhi, Mumbai, Chennai, Bangalore and Hyderabad have depleted nearby water sources and have to bring water from dams and reservoirs 300km to 500km away.
The sourcing of water for the cities from rural areas has created resentment among the local population. In 2005, five farmers were shot dead in Tonk district in Rajasthan, during a protest against the diversion of water to Jaipur, the state capital 100km away, from a dam in their area. The farmers were already angry over the displacement of more than 70,000 people from 63 villages during the construction of the dam.
In many rural areas, women still have to walk long distances to fetch drinking water, though most political parties come to power promising drinking water to all villages.
The Indian government launched an 'Urban Renewal Mission' in 2005 to address the shortage of drinking water supply, housing and social services, as well as inadequate sanitation.
Officials said private companies would participate in the programme, which would cost 500 billion rupees (S$15 billion).
Under the programme, loss of water due to leakage would be reduced to 15 per cent by 2012. Rainwater harvesting has been made mandatory while steps are under way for waste water re-use to ensure 24-hour water supply.
[Water shortage and other insecurities can make cities in India and China less competitive.]