Edmund Terence Gomez was commenting after Anwar, who is also finance minister, urged government-linked companies (GLCs) and government-linked investment companies (GLICs) to reduce their investments abroad.
“If the excuse given is (that investing domestically is) not attractive, what is the rationale for us holding a campaign to attract foreign investors?” said Anwar at a finance ministry assembly on Tuesday.
Gomez, however, said Malaysia’s current political instability and the furore surrounding the rumoured “Dubai Move” would not engender confidence among investors.
He also said Anwar’s convening of the upcoming Bumiputera Economic Congress goes against a previous promise that the government would focus on needs-based policies.
“We know this for a fact: when you have race-based policies that tend to marginalise or put fear in domestic investors – especially non-bumiputeras – you’re not going to get domestic investments. And domestic investments in this country have been very low for a very long time,” he told FMT.
The turning point, according to Gomez, was a banking consolidation exercise in 1999 which saw the nation’s banks narrowed down to ten groups, a move he said started “killing off domestic investor confidence”.
“Investors and businesspeople then knew that companies could be expropriated at will. The government makes a decision, and tomorrow I lose (the clothes on) my back. There’s nothing I can do about it.
“(Investor confidence) hasn’t actually picked up since then. Bumiputera-type policies allow for these kinds of things, including the appropriation,” he said, citing the policy requiring 30% of equity in public-listed companies to be owned by Bumiputeras.
Gomez lamented Anwar’s apparent political U-turn from needs-based policies as previously promised.
“He comes to power, and suddenly they’re back having a Bumiputera Economic Congress. How does this inspire investor confidence when you talk about inclusivity and bringing investors in, and then you have a policy that discriminates?” he said.
Noting that more than half of Malaysia’s top 20 companies today are GLCs, the rest being largely privately owned Chinese-based enterprises or “family firms”, Gomez said Anwar is likely turning to GLCs and GLICs to plug a lack of domestic investment.
“We must remember that this is a prime minister who, in the one year since he came to power, has gone to China twice. He’s gone to America, the Middle East, Japan – he’s gone to all the major countries looking for investments because the country needs investments to grow.
“The focus for him was foreign direct investments (FDI). Now he’s thinking: ‘I’ve exhausted FDI, now I must look at domestic direct investments, and I’m not getting it. Where can I get it from? I get it from institutions I can control – the GLICs and the publicly-listed GLCs.’”