Based on The United Nations Conference on Trade and Development’s data, the global FDI suffered a 41% contraction last year. For Malaysia, the reduction was 51% for all the states. My friends in the Economic Development Board (EDB), Singapore’s main agency for investment promotion, tell me that the data are similar for the city state although the official data have not been made public yet.For Penang the FDI plunge was an unprecedented 80% and the state also dropped to No. 5 ranking nationally, behind Sarawak, Selangor, Sabah and Johor. Even Kelantan has done better with only 52% decline.
The reasons for such drastic decline are not hard to pinpoint. Lim’s shocking decision to turn down an RM10.2 billion high-tech FDI because he could not guarantee enough engineers has made Penang a laughing stock. Lim’s action, which has been dubbed as “the Mother of all Blunders”, has generated negative publicity, tarred the image of the state in the eyes of the investing community and fatally affected Penang’s position as a key high-tech FDI destination, perhaps permanently.
I received many “thank you” calls and emails from Singaporean friends who had no doubts that the investor in question would be warmly welcomed and grabbed up by their EDB. One of them even suggested jokingly that Lim be given a place in EDB’s “Hall of Fame” for managing to secure for Singapore such a massive FDI deal. Full Story
