The Malaysian government must take serious measures to arrest the decline in investments and this article in malaysiakini is quite disturbing. Foreign investment in free fall reports that foreign investments have dropped from RM46billion in 2008 to RM4.2billion for the first 5 months of 2009.
Given the global economic crisis and even if we can assume that the rate of investment is uniform, we cannot expect 2009 to receive more than RM8.4billion of foreign investments.
It really casts serious doubts on whether Malaysia can even achieve 3% growth for 2009 and 2010 and our overall chances of ever achieving developed nation status by 2020.
Taxpayers now demand more transparency in how policies are implemented and investors are definitely moving to other nations where laws and policies are not subject to Malaysia's major flip-flops. The latest measures announced by the PM appear to be merely cosmetic changes and more "form over substance" as the crutch policy is still in place after 40 years.
To illustrate how Malaysia's growth has been stifled by the government's crutch policies, here are some details published by the UN in March 2009.
According to the UN Population Database,
Asia's GDP per capita (US$)
The ratio has been reduced a little but the GDP for Malaysia is still nowhere here that of a developed nation. No one denies that there has been economic growth but the costs are also significant with major resources especially oil and timber being depleted for economic growth.
I daresay that the economic scenario is made worse as not only are foreign investors heading elsewhere but locals are setting up foreign operations to evade the NEP problems.
As Malaysia is a nation with a young population, the next 10 years will be crucial if we are to avoid social unrest caused by lack of investments and jobs creation.
I believe that a more realistic target of developed nation is 2035 but only if the government makes major policy changes or Malaysians change their government in the next elections.