28th January, 2010

KUALA LUMPUR: Local entrepreneurs and companies should be encouraged to invest in the country rather than depending on foreign direct investments (FDIs) which may not be substantially available in future.

Dr Mahathir being briefed on the development of the International Islamic Hub City by I-Berhad chief executive officer Eu Hong Chew (left).

“The future will see a very different world in terms of economics. We still talk about FDIs. In future, FDIs are not going to come here or any other country,” said former Prime Minister Tun Dr Mahathir Mohamad.

He cited the high unemployment rate in the United States as one of the reasons; “there is 10 per cent unemployment in the US. So, they want their industries to stay in the US to give jobs to their own people, otherwise there is going to be a revolution against them.”

“Therefore, corporations from the US are not going to use their money to come here and create employment opportunities. Besides creating jobs, FDIs don’t fully benefit the country.

“They come here with 10 per cent of their capital. They borrow the money here. They start industries and pay no taxes and make all the profits, but if Malaysian companies start here, they are going to stay here, create better jobs and profits, which will benefit the whole country,” he said during his visit to I-City here yesterday.

Hence, the new strategy should be not to entirely depend on FDIs, but instead encourage local investors to grow into world-class companies.

Going forward, Dr Mahathir also said Malaysians should be highly trained in science and mathematics to enable them to move into knowledge-based economy.

He said though the government had allocated funds for research and development, it was not distributed as those in charge of the funds wanted returns on investment (ROI) and expect high collaterals.

“But research has got no returns on investment. One day you might strike something very valuable and you can make billions but before that you should also invest billions.

“Sometimes the researcher will find something that he don’t know how to commercialise it and there is when entrepreneurs should come in.

“(Therefore), you are going to have problems interacting with the government, I am sorry,” he said when asked on how the private sector can interact with the government on research and development matters.

On projects, Dr Mahathir said nothing would go to waste if one knew how to manage them.

“Management skills need to be cultivated. There should be ability to implement projects, not just say it or launch them,” he added.

(Source: New Sabah Times)