MALAYSIAN Prime Minister Najib Razak has invited Singapore investment in the Iskandar project in Johor. Minister Mentor Lee Kuan Yew has said no private investor will go in unless there is long-term stability in Malaysian policy.
I suggest that the Iskandar project have more private sector participation and less government-to-government involvement. That way, it will not be affected by ups and downs in bilateral ties.
A partnership between a private Singapore firm and a private Malaysian firm will be less impaired by political changes than government-to-government ties.
Hong Kong and Guangdong province in China provide a tried and tested example. Since the 1980s, many Hong Kong businessmen have invested in neighbouring Guangdong without being urged to do so by the Hong Kong government. Their businesses in Guangdong have flourished, despite political changes in China.
I hope we will make similarly large investments in Malaysia. This is possible only if the private sector takes the front seat and governments take the back seat.
Toh Han Shih
[All well and good to say. But the reason why investors are concerned with political stability of countries they invest in is because Pte businesses can be the unwitting pawns or hostages to political posturing. Witness CLOB. Certainly, that was pte investors buying shares through CLOB.
Any pte investors are vulnerable when they invest in another country with a different set of rules. Many Singaporeans were burnt when they bought property in Johor than never materialised.
Some bought property, built their homes only to have them torn down because they did not comply with rules/regulations. Or did not bribe the right persons.
Investors in Iskandar will be risk-takers who would have considered the climate of political cooperation (such as it is) and bet on the continuing good climate. But it could equally go south. but that is the nature of business, and businessmen know, "Ai pia, jia eh aiah".]