Re-Focussing Angst And Efforts On Foreign Direct Investments (FDIs) - SJER


After my last posting, a fellow Promudan challenged my cynicism towards the IDR, citing the government's intention for IDR to emulate the the Pan-Pearl River Delta Development in China; where Singapore plays the role of Hong Kong and IDR region that of the mainland provinces of South China.

At this stage, allow me to begin referring to the IDR by its old name, the SJER or South Johor Economic Region. The reasons for this I will present later.

I actually do not agree that the SJER emulates the critical elements of Pan-Pearl River Delta Development. Those who equate then have accidentally, or by choice,ignored the following factors:

• LEVEL OF INTEGRATED DEVELOPMENT - Pan Pearl is also called 9+2, where Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou and Yunnan are jointly developed WITH Hong Kong and Macau in one development effort. The effort is integrated for the benefit of the whole or majority of the whole, with the following implications:

1. The focus of development should be equally weighed against the needs of all parties, whereas the government pitch seems to be overly-sensitive of fulfilling Singapore's needs for SJER, specifically, land (low land investment oversight), labour (passport-less region?) and basic resources like water.
2. In reality, for SJER to be equivalent to Pan-Pearl, the SJER region must include Singapore WITHIN SJER, with the SJER management body having a say in directing Singapore's development to support SJER. Can't imagine Harry Lee Kuan Yew agreeing to this though! He would basically be reporting to the state government under the rule of the Sultan of Johor!
   

• RIGHTS OF SOVEREIGNITY - for which the problem seems to be very much our own government's lack of sensitivity of what the inherent rights they should be protecting.
  

1. As mentioned, for SJER to be like Pan-Pearl, Singapore's development must also be driven by needs dictated by SJER development board etc for the sake of SJER as a whole. I see it unlikely for Singapore to agree as it would abrogate their sovereign rights.
   
2. It is hence strange that the Malaysian government does not seem to mind having Singapore government reps give direct input as part of SJER's management core. This must be one of the few instances in the world were even a slice of power is surrendered voluntarily by a government to a foreign power to decide on the fate of some of its citizens on its own sovereign soil!
3. Pan-Pearl does not have this issue of course, as HK and Macau are part of China, avoiding any sovereign issues.
   

• SIZE - The biggest difference between the SJER and Pan-Pearl is by far in size and scale. Pan-Pearl River Delta's 9 Chinese provinces are significantly larger than Malaysia - why then is the focus so South Johor-centric!

1. If the government was right serious and about emulating Pan-Pearl, the region should be LARGER, and even incorporate slices of Indonesia, perhaps also Thailand and Southern Indo-China.
2. The government can then have tried to be clever by positioning South Johor as an alternative secondary (but fast growing to equal) hub to Singapore for the wider Pan-Central ASEAN Development.
   

• REGRESSION TO THE 80's FTZ ERA - The SJER seems to be a regression from the MSC and BioTech corridors we had been moving to as offerings. The MSC, Kulim Hi-Tech Park, etc included a focus on key industry niches that also pushes Malaysia up the FDI value chain. The SJER is just a broad-based resource Free Trade Zone (FTZ) with some glitz, but no apparent value focus.

1. Hence, by ignoring all the above, the government has not offered up a real equivalent to Pan-Pearl with SJER, when comparing FTZ to FTZ! FTZ - this is so 1980's! (Incidentally, when Musa Hitam was last involved actively in development as a cabinet minister)
2. As an FTZ, on size alone, the SJER is hence poor competition to Pan-Pearl, and certainly struggles to provide an ASEAN-wide offering to challenge it. Indeed, this is probably why the SJER is being poorly received by the West (who'd rather invest in China), Japan (prefer Indochina) and even Oil-Rich Arabs (Dubai is still being pumped up). Hence probably the over-focus on one ever interested party - Singapore.
   

But as I said before... Singapore should not matter so much...

As I'm busy with a new baby and now with my sister's coming wedding, I'll keep a running brief on this piece and perhaps update it from this stage onwards as and when info, understanding and opinion gels.

So, why do I wish to still refer to the IDR as the SJER. Well the reasons are:

1. I understand that permission for use of his name for the SJER has not as yet been sought from the Sultan of Johor. The name "IDR" was unveiled as a 'surprise', against all rules of protocol and Malay propriety at the launching of SJER, to the Sultan's chagrin, and it seems he is still waiting for the request from those 'in charge'.
2. SJER is a more appropriate acronym for it, being Singapore's Johor Economic Rape!
   

One last running word on the NEP thing - I don't see why the NEP and its removal or otherwise is such a big deal where attracting FDI is concerned. In truth, EU commissioners like Rommel have something to complain about all ASEAN countries - Indonesian corruption, Thai's military, Philippines' gunpowder democracy, even Singapore's authoritarianism.

In the end, NEP had not been able to deter investment in Malaysia throughout the 70's through to even post 2000. Why should it 'magically' be factor now? The outside investors just don't care about our social-engineering agenda - as long as their investments are not risked by it... Is there anyone out there selling the story that the NEP puts investor's good money at risk...? Who...?