Mahathir could do more for Johor project

Mahathir could do more for Johor project

The Iskandar Development Region, touted as Malaysia's new growth driver, should be encouraged to work

AHEAD of steam is building up over the Iskandar Development Region (IDR). And it's being generated by former prime minister Mahathir Mohamad who seems intent on spending his retirement years trying to undermine his successor Abdullah Ahmad Badawi.

The IDR is Mr Abdullah's grand vision, a special economic zone in southernmost Johor state twice the size of Hong Kong that is being touted as Malaysia's new growth driver.

To attract foreign investors, Mr Abdullah did the expected: he relaxed New Economic Policy-type laws governing investment in selected, if yet unnamed, areas of the region.

In short, where those areas are concerned, investors can hire whoever they like, source capital wherever they want and do not have to sell 30 per cent of their equity at par to bumiputra (mainly Malay) investors.

Given that the world is already flat, that investors are spoilt for choice and every other region is trying its best to woo foreign investment, Mr Abdullah's moves are neither wildly original nor earth shattering. But it would seem so given Dr Mahathir's vitriol. In a speech before 300-odd people in the agrarian hamlet of Kulai in Johor last Thursday, the former premier made his feelings about the IDR plain.

He fretted that the government was 'selling' the country; that the Malays would 'lose out', and finally, that the Malays would 'become enslaved'. That's puzzling coming from Dr Mahathir.

He should know better than anyone else about the efficacy of relaxing NEP-style rules because he was the first premier to do so. Faced with a crippling recession in the mid-1980s, Dr Mahathir declared the NEP to be 'in abeyance' and allowed foreign investors to wholly own their companies if they exported the bulk of their output.

His timing was perfect. It coincided with a steep appreciation of the yen against the greenback - courtesy of the Plaza Accord - and Japanese manufacturers, suddenly uncompetitive at home, 'discovered' Malaysia. The influx of FDI in enormous numbers after that set the stage for a decade-long economic boom. Only a malcontent would accuse Dr Mahathir of 'selling' the country then because it was patently the right thing to do.

Now, the NEP-free zones within the Iskandar Development Region account for 2-3 per cent of its total area. What of Dr Mahathir's 1994 Multimedia Super-Corridor (MSC), an area that stretches from the Kuala Lumpur City Centre in the heart of the capital to Cyberjaya in the south?

Like the IDR after it, the MSC was created by an enabling Act of Parliament. To make it work, Dr Mahathir suspended NEP-style requirements within the area, bequeathing it with similar liberalisations which Mr Abdullah, you might say, merely copied for his IDR.

Dr Mahathir went further, tirelessly criss-crossing the world selling his concept, scouring the globe for investors to make his idea a reality. The MSC was, and still is, a terrific idea ahead of its time but it remains a qualified success, a work in progress that's evolving. One reason is that everyone else has jumped onto the bandwagon. Every other country is lavishing incentives on the global investor, the better to create its own Silicon Valley, its own Shenzhen.

The world has changed and Dr Mahathir should think about actually helping Mr Abdullah and using his considerable global connections to sell the IDR - and the MSC - internationally.

The IDR is a reasonably good concept and, like the MSC, should be encouraged to work. If Dr Mahathir does not want to help, he should not hinder. As a physician, he might do well to reflect on the abiding tenet of Hippocrates: 'Above all, do no harm.''