Guan Eng: Investors like transparency-focused Malaysia, a safe haven in trade war

Finance Minister Lim Guan Eng speaks during a press conference at the Education Ministry in Putrajaya February 14, 2019. — Picture by Yusof Mat
Finance Minister Lim Guan Eng speaks during a press conference at the Education Ministry in Putrajaya February 14, 2019. — Picture by Yusof Mat

KUALA LUMPUR, June 3 — Foreign investors have a positive view of Malaysia that can be considered a safe haven amid the ongoing trade war between economic superpowers US and China, Finance Minister Lim Guan Eng said.

In an opinion piece published by Nikkei Asian Review, columnist William Pesek noted that Lim said Malaysia wants to be a “neutral ground away from the trade conflict” and that investors “like what they see” in Malaysia.

“They see strong fundamentals, but also they are reassured by the new government’s commitment toward transparency and accountability,” Lim said in a May 28 interview Pesek.

Pesek cited data that appeared to support Lim’s opinion, including the 4.5 per cent year-on-year economic growth in the first quarter of 2019 and foreign direct investment increasing by 95 per cent for January to March 2019 against the previous year to US$5.18 billion (RM21.7 billion).

“Not a bad showing for Malaysia’s newish government at the one-year mark,” Pesek said when referring to the Pakatan Harapan (PH) coalition which won power in the 14th general election held on May 9, 2018.

The election saw the historic defeat of the Barisan Nasional (BN) coalition that was then led by Datuk Seri Najib Razak, who had been the country’s finance minister from September 2008 and prime minister from 2009 up to the electoral loss.

Pesek said Lim described the discoveries of the previous administration’s practices on his first day as finance minister as “shocking”.

“Completely without the knowledge of the public, we had fake files, we had hidden files, we recorded even fake accounts and creative accounting.”

Lim’s team “were shocked at the extent of the abuse of power, of financial malpractice. Daylight robbery! And that [Najib] could do it so blatantly, thinking he could get away with it,” Pesek quoted the minister as saying.

Pesek said the best Lim could offer regarding the past BN administration’s previous nine years of rule was: “At least the government has not gone bankrupt,”

The columnist noted Lim as saying that the cleanup of the issues left behind would require an estimated additional two years, with the finance minister prioritising the trimming of the country’s RM1 trillion government debt.

Lim reportedly said Malaysia’s economy needs to grow at a “strong pace” to enable debt-trimming and for well-paying jobs to be created.

“For us to escape the middle-income trap, it is important that we create an entrepreneurial state,” Lim was quoted saying, with Pesek noting that the Malaysian government is weighing measures to encourage the start-up scene.

With Singapore and Indonesia enjoying success with technology-driven start-ups, Lim said the “ecosystem” required to create such success is required and believes Malaysia has “what it takes. We have the talent, we have the technology, we have a new government that is very tolerant of new ideas.”

Pesek noted that Lim carried out various changes including checking on infrastructure contracts to cut cost and changing to “open tenders” system for projects to fight corruption.

The columnist added that Malaysia has climbed from its 24th rung in 2018 to the 15th spot on the World Bank’s Ease of Doing Business survey of countries as starting businesses and things such as getting permits for construction have been made easier here.