KUALA LUMPUR: Investment deals between countries should involve more of the private sector and not just the public sector, said Institute for Democracy and Economic Affairs (IDEAS) chief executive Wan Saiful Wan Jan.
“State-owned enterprises is not the way to go. We want to make this a properly functioning investment deal between the countries, we must make sure it happens between the private sector. It cannot be continuously government-led,” he told reporters at a half-day symposium “Retreating US, Rising China: How Should We Respond?” organised by IDEAS today. He said Malaysia’s private sector involvement in these deals is not enough.
“We’re learning the wrong lesson from China that the government can play a bigger role in the economy. Even if it’s China, it’s not the case. We need to make sure the dominance of our government in the economy is reduced. The New Economic Model states that one of its targets is to reduce the government’s role in business. That seems to be forgotten by the government and I hope there is a revival of that,” said Wan Saiful.
He said Chinese investments in Malaysia is essentially a good thing, if the country continues with the principle of an open economy for Malaysia.
“We need to make sure there is rule of law, that there is transparency and proper governance of all the investments coming into the country … as long as we can ensure that, it will contribute to our economic growth.”
At the moment, he said there are concerns on projects involving Chinese investments as there is not enough information on it. Wan Saiful said there should be more transparency and information shared by the government with the people so that there is less criticism.
China’s Unirule Institute of Economics executive director Sheng Hong said China is the largest country that has advantage in international trade. However, state-owned enterprises (SOE) slow China’s economy down. In 2013, SOE’s real return on equity (ROE) was about -3.8%, while non-SOEs’ ROE was about 15.6%.
“China’s economic growth will be faster if we carry out the SOE reform. However, we have no hope to see the reform in the near future because of resistance from the interest group of SOEs,” said Sheng.
Zico Holdings senior adviser to Asean advisory, Yong Hee Kong pointed out that in Asean, an annual investment of US$210 billion (RM882 billion) is required for infrastructure projects. – by Ee Ann Nee
First published in www.thesundaily.my 12 September 2017