Iskandar, NEP & Khairy's New Dilemma

"Iskandar not a sell-out to foreigners"

By Khairy Jamaluddin
Opinion: Out of the Cage
1st April 2007

I am not sure whether it is coincidence or intentional but the article was published on an auspicious day: April's Fools Day.

Let's view objectively the opinion from our Oxbridge-groomed expert and chief economist and strategist to our Prime Minister.

Abstracts (with emphasis added)

According to Khairy, the prime minister articulated the vision well (what vision? Oh, the IDR: Iskandar Development Region). He added further: "As it turns out, the government pretty much got it spot on. The foreign investment community liked the incentives and got the message that the government was dead serious about Iskandar."

"In particular, apart from the tax holidays they would get, the big-ticket item was definitely the exemptions from the 'Bumiputera thing'."

"The Iskandar perks also allows for capital to be sourced globally and the unrestricted employment of foreigners in the approved zone."

"Clearly these exemptions are DESIGNED to remove one of the principal BUGBEARS that foreign investors have had in Malaysia. SURRENDERING 30% of "Your" equity (note: no more OURS) even before the business is under way make you think twice (did you think twice?) about investing, especially when the RECIPIENTS OF THE STAKE OFTEN BRINGS LITTLE OR NOTHING TO THE TABLE. (Whose table? On Top or Under?)"

"Although the FIC rules were designed to help meet Bumiputera equity target set in the NEP, IT IS DEBATABLE WHETHER IT HAS SUCCEEDED IN CREATING PRODUCTIVE CAPITAL OR MERELY ECONOMIC RENTS."

"Simply put, why risk the future of Iskandar for policies that haven't really succeeded in meeting their objectives?" (I am impressed. It seems that is good common sense which had proven so uncommon in the political-ethnic forum).

"Surprisingly, the incentives have not generated too much debate on the Malay ground, yet. (Ya, yet!) But it will come. And before it does, it is important that Khazanah, as the custodian of Iskandar, explains what the exemptions are and what is being done to promote the "Bumiputera thing" in Iskandar..." (Oops! The Tai-Chi at work. Azman Mokhtar will be blamed for any resistance or objections to the policy change and for anything that the policy-makers failed to anticipate).

"Khazanah has been NOTORIOUS FOR THEIR INABILITY to connect and communicate with the Malay ground and this issue sets up a potential minefield..." (Azman, this is a direct blow in your face, and an intention to tell you that you had failed the Malays, not UMNO and it is foreseen that this policy change will generate a battle within the system; it's a potential minefield and don't say I didn't warn you; that's what the statement implied).

Khairy predicted that the new battle-cry will be centered on issues such as:

(1) Johor is losing its independence;
(2) The Malays are going to be slaves and servant once more;
(3) Singaporeans and the undesirable skyscrapers will dominate Johor and employing Malays as servants.
(4) Do we Malays want that (to happen? No, but it could)?


"But before we become emotional, lets put the incentives in its proper context to see if the enslavement holds water." (I love this statement. How true; absolutely true).

"First of all, the incentive would be offered within certain zones of Iskandar and not applicable to the entire Iskandar. These zones are less than 2% of the entire region. There is surely no reason to think Southern Johor will be flogged off.

Secondly, only certain targeted sectors can benefit from the incentive, namely, creative industries, educational services, financial advisory and consulting (who is in this biz? Kali?) healthcare, logistics and tourism.

Third, to qualify, the companies must conduct the business within the zone or outside Malaysia (what about the value chain? Every business involves a chain of integrative services and strategically, it will not be viable to group every peripheral business units within the zone.) Any company that set up in these zones will not be allowed to capture the Malaysian market and the zones is set up for regional businesses and will not allow those foreign companies tp have a leg into the Malaysian market. By providing these incentives we are actually taking the fight to places like Singapore (My goodness, will Singapore government allow their companies to set up here so that they (the Singaporeans will take the fight to Singapore and crush their own economy? This statement made by Khairy is insidious and when the Singaporeans read this, will they want to come and invest here?)

Fourth, those companies that invested in IDR will be asked to contribute to a fund for 'social development' to be used to roll out programmes to help low income families in Iskandar to mitigate the widespread inequality via silos of divergent economic growth.

Fifth, Melayu mudah lupa, these sort of incentives were offered before in one form or another since 1980s and its nothing new; why object?

"So the assertion that Iskandar is the thin end of the wedge for foreign economic neo-colonialists is intellectually unsound. This doesn't mean, of course, that the "Bumiputera thing" is completely irrelevant." (I am puzzled; it's self-contradictory and stultifying)

"As long as this type of value-creating BUMIPUTERA AGENDA is in place, there is nothing to fear from the Iskandar incentives". (Oh, my god, this is an agenda; it's surely fearful because what we see now may not be thereafter when investments are dumped in and may not be able to liquidate over a short time).

"The noise from the margins - one crying bondage, the other calling for an end to affirmative action - BOTH MISS THE MARK INTELLECTUALLY AND MORALLY." ( I agree 100%)

(Note: the emphasis is mine).