Letters from German, Japanese and Dutch investors threatening to pull out

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A government in denial.

Does the clueless and incompetent Muhyiddin government know what it is doing after more than 15 months fighting the Covid-19 pandemic? Malaysia is the only country in the world that has declared an emergency as well as locking up the Parliament under the pretext of fighting Coronavirus but fails even after more than six months under lockdowns since January this year.

Malaysia is also the only country in the world that has a long list of Movement Control Order – MCO, EMCO, Semi-EMCO, CMCO, RMCO, FMCO and finally the newly introduced phase-based MCO lockdown – but still fails to contain the daily Covid cases. And it is the only country that promised to do mass Covid testing of migrant workers more than 15 months ago, but never did it.

It is the only country that – quietly and proudly – allowed millions of foreign passengers to depart or arrive at a time when the airports should be closed. This is also the only country that saw the daily Covid infections consistently hit the roof whenever the prime minister’s power is at stake. And this is the only country where it can accurately predict when Covid cases will go up or down.

Of course, Malaysia is the only country that has raised all types of flags – from white flags to black flags – due to hunger or starvation, while the ministers enjoy lobsters. And this is the only country where a Senior Minister in charge of security said he had no idea how 200,000 people managed to evade the police roadblocks to return to their hometowns for Hari Raya celebrations.

This is the only country that declared a full nationwide lockdown, but quietly approved 128,150 companies to operate. And this is also the country whose ministers could not figure out whether factories were the major contributors to the daily Covid infections, not to mention the only country with the most bloated Cabinet of 72 ministers and deputy ministers.

Malaysia is also the only country whose government proudly informed the world that its prime minister was incapacitated with diarrhoea when the going gets tough over the war with Covid-19. And who can deny that this is the only country that flip-flops and U-turns almost every day, even over the simplest health standard operating procedures (SOP) one can imagine.

More importantly, this is the only country that self-declared its own success when the world openly laughed, ridiculed and mocked at its failure. The failures of Muhyddin government, not only in mishandling the Coronavirus pandemic and mismanagement of the economy, but also in its inability to recognise and prevent starvation which has attracted the attention of the US.

The multiple crises – social, economic and political – which eventually led to the waves of white flags, a sign of surrender, caught the attention of Bloomberg last week. The world knew about Muhyiddin’s illegitimacy, which Malaysian government-controlled media have been trying to suppress and hide. The world also knew the Parliament was suspended since January to allow Muhyiddin to cling to power.

The longer the backdoor government persists, the harder it is to combat Covid and rescue the economy. The first step that the prime minister must do is to admit that he has failed. Only then he will open to new ideas or suggestions, without which his regime will be doing the same thing over and over and expecting different results, something which Albert Einstein called “insanity”.

However, based on the retaliation from the egoistic and arrogant ministers of the government over the Bloomberg article, the failed government would rather bring down the country with it than to admit their failures. Unimpressed, Minister in the Prime Minister’s Department (Economic Affairs) Mustapa Mohamed argued Malaysia is not a failed state because it is still functioning.

Going by Mustapa logic, neither Myanmar nor North Korea is a failed nation because those regimes are still functioning. Hilariously, he also said that a failed nation is one that is unable to govern well when confronted with various conflicts and instability. Did he realise that his own definition of a failed nation describes perfectly the current Perikatan Nasional government?

Joining the denial bandwagon was “flying car” Minister Redzuan Yusof. He argued that Malaysia is not on its path towards becoming a failed state because there is no sign that the delivery system is breaking down and the society is still functioning. Did he realise that Covid patients were lying on camp beds outside the hospital’s emergency department and people were starving?

The latest sign that the country has failed, or is failing fast, came from the Malaysian-German Chamber of Commerce and Industry (MGCC), the Japanese Chamber of Trade and Industry Malaysia (JACTIM) and the Malaysian-Dutch Business Council (MDBC). All the foreign investors had written to express their displeasure over Muhyiddin government’s half-baked SOPs.

The German investors, in its complaint letter dated July 8, 2021 addressed to PM Muhyiddin, expressed its worry and concern about confusion with the Covid SOPs and inconsistent enforcement. Schattdecor Sdn Bhd, a German-based company specialises in decorative surfaces and impregnation, received the approval letter from MITI to operate but rejected by the Royal Malaysia Police.

Similarly, Weidmuller Sdn Bhd, another German company, was forced to close due to its location in Senai I-Park, Johor, even though it has no Covid-19 infections. Weidmuller, which just set up its production in Malaysia last year and supplies worldwide, will have to relocate parts of the production to Spain if they cannot meet their clients’ demands.

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Finance Twitter

The company, affected by the newly announced EMCO effective July 9 until July 22, said – “A relocation will lead to job losses in Malaysia and potentially the closure of the plant. Weidmuller hopes for a more targeted approach which does not punish the complete industry.” The German Chamber of Commerce has warned of a disruption – even a collapse – of supply chain.

Henkel Malaysia Sdn Bhd, involved in export and domestic industry of electronics, food and beverage, baby diapers and furniture is also affected by the ongoing EMCO. Another company, Schaefer Kalk (Malaysia) Sdn Bhd, was allowed to operate its lime factory, but not its quarry for limestone (needed for water treatment and food production). Without the raw materials, the factory has to shut down.

Additionally, expatriates and their families could not get their pass stickers endorsed, therefore risking raids and fines, because service counters at Immigration are closed since June 1. The German Chamber of Commerce has even suggested eight areas of improvement, something which is indeed humiliating to the backdoor government of Mahiaddin.

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Finance Twitter

Besides lecturing the clueless Malaysia government that clear SOPs and consistent standard of enforcement are basic fundamentals, the letter also explained that controls at manufacturing facilities should be increased. Private vaccination programmes should also be increased. But German companies were not the only frustrated investors affected by half-baked SOPs.

The Japanese Chamber of Trade and Industry Malaysia (JACTIM) similarly has written to the clueless Malaysian prime minister in its complaint letter dated July 6, warning that companies at risks of closing down due to the country’s half-baked SOPs. More than 40% of 1,500 Japanese companies in Malaysia, or 650 companies located in Selangor, are severely affected by the EMCO.

In the letter, the Japanese trade group lectured the Muhyiddin administration, reminding the incompetent government that once an operation is halted, it requires a long time to restart, and in some cases the production might not be able to resume at all. It requested all industries be allowed to operate at least 10% workforce, the same measure taken during MCO 1.0 last year.

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Finance Twitter
Finance Twitter
Finance Twitter

Mirroring the recent complaints by the Sultan Selangor, Japan was also not impressed with the slow vaccination programme in the state. The automotive industry has lost some RM5-10 billion in profits in the past month, partly because the iron and steel industry has been operating with 10% workforce. Like the Germans, the Japanese companies are also facing the same supply chain problems.

Netherlands, on the other hand, has written a letter dated July 10 to the Chief Minister of Johor. The Malaysian-Dutch Business Council (MDBC), whose member companies have been operating in the state for more than 20 years, has requested a review of data from the Johor health department over a blanket shutdown of all companies in Johor.

Welcoming audit checks, the MDBC reminded the government that the Dutch companies are part of the global supply chain supporting Fortune 500 companies. It has raised the serious problem over the lack of collaboration and coordination between the state government, local enforcement authorities and companies in identifying compliant companies to be allowed to operate.

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While the Dutch’s letter was not as lengthy as Germans or the Japanese, it has threatened to pull investments out of Malaysia, warning that “business opportunities are often lost to branch companies and competitors outside of Malaysia (China, India, Vietnam, Indonesia, Thailand, etc.). Any further closures in the EMCO areas will affect the future investments in Johor.

 

To make matters worse, US Ambassador to Malaysia Brian D McFeeters has on Friday (July 9) warned that American investors are anxious over the unpredictable government policies and its flip-flops implementations. He said – “American investors don’t have advanced notice about regulations. They do have consultations with the government, but it has not been productive.”

However, McFeeters was impressed with the investment climate in Penang. After meeting with Penang Chief Minister Chow Kon Yeow, Invest Penang and the American-Malaysia Chamber of Commerce (Amcham), McFeeters said – “Clearly, Chow is looking ahead, so we want American companies to be part of that.”

In truth, the incompetence of the federal government did not happen yesterday.

In January, when Finance Minister Zafrul Aziz crowed that eight international venture capital fund managers had committed to invest up to RM1.57 billion into Malaysia start-ups in the fields of fintech, edutech, agritech, mobility and artificial intelligence (AI), he was grilled. EU-Malaysia Chamber of Commerce and Industry (EUROCHAM Malaysia) CEO Sven Schneider exposed his lies.

Mocking the empty vessel Malaysian finance minister, Schneider said many investors were having concerns in regards to Malaysia’s attractiveness as a viable investment hub. He said – “Until today, the Honourable Minister was not even able to meet with us and listen to the concerns of our corporations. Without these inputs, your Ministry certainly cannot address the problems on the ground.”

If Zafrul was too lazy, to put it mildly, to even find some time to meet the European business chamber to discuss matters concerning commerce and trades, exactly why should foreign investors care about investing in the country? It’s laughable that the arrogant Malay-Muslim Perikatan Nasional government thinks the world revolves around them.

But considering that Health Minister Adham Baba could not even differentiate between Spanish flu and Spanish fly, chances are Prime Minister Muhyiddin Yassin would not understand the problems faced by the German, Japanese, Dutch and American investors, no matter how many letters they write. The clueless and arrogant backdoor government is still in denial. – Finance Twitter