Friday, March 30, 2007

Iskandar Development Region - lessons from Singapore and HK

On March 11, The NST published an interesthing article on the southern Johor growth region by former special adviser to the UN secretary-general on Ethics, Tunku Abdul Aziz. It was an honest and frank comments by the anti-corruption activist. I would like to share it with you, with compliments from Tunku Abdul Aziz.

Lessons from Singapore and HK
by Tunku Abdul Aziz

THE very idea of a new metropolis in southern Johor to rival Singapore and Hong Kong is intriguing, to put it mildly.

Sceptics, of whom there are many in our midst, are already raising their eyebrows, plucked or otherwise, as if to say, "Here we go again!"

Malaysia's thirst for the "superlatives", and don't we know it, is unquenchable.

I see nothing wrong with our trying to replicate the best; the verdict of the international business community is that Singapore and Hong Kong are the best cities in our region in which to live and work.

We, too, have a great city, Kuala Lumpur, the pride of the nation.

Why is that in spite of the iconic Twin Towers and the biggest this and the longest that, we do not measure up to international standards?

Some years ago, the Economist Conferences invited me to deliver a speech in Bangkok on (no prizes for guessing) fighting corruption.

The three-day gathering was attended by dozens of high-powered chief financial officers of multinational corporations in the Asia-Pacific.

The Economist's straw poll during the conference asked which city they would choose if they were setting up a regional office, and, by implication, where they would prefer to live as expatriates.

To a man/woman, the choice was Hong Kong first and Singapore second. Kuala Lumnpur, to my utter consternation and embarrassment as a proud Malaysian, di not even get a look-in.

In the late autumn of 1999, I was a guest at a private dinner in Washington DC. An American private investment banker who had just returned from a "shopping" trip to Malaysia was asked, "Of all the countries in Asia, where would you invest your clients' money?"

His reply shook me to the marrow: "Anywhere except Malaysia."

He then mentioned how a senior government official had told him that a foreigner could not buy a Malaysian company unless he had a Malay partner and he would be more than happy to recommend one in the spirit of US/Malaysia relations.

Upon further enquiry, it turned out that the proposed partner was the civil servant's brother-in-law.

I spent much of the evening explaining to the American that it was not government policy that a foreigner had to have a Malay partner before he could acquire assets in Malaysia.

The point about these little stories is that both Hong Kong and Singapore set out deliberately to become attractive, well-ordered and safe cosmopolitan cities in which business could be conducted with minimum inconvenience. They have not become great cities by accident.

For us, so used to and comfortable with our slapdash approach to doing things , it will require a complete culture change, which in turn can come about only if there is an unequivocal committment by the government to facilitate the necessary change management.

Nothing less than a thoroughgoing reform of our legal framework, rules and regulations will suffice.

When we talk about the Iskandar Development Region (IRD) as a metropolis to rival both Hong Kong and Singapore, we are entering the realm of serious competition, in every respect, with the top world competitiveness heavyweight champions.

While I have not the slightest doubt that we are more than up to pouring colossal amounts of cash and concrete into this project, do we have the capacity and inclination to see it through by continually seeking to meet the ever-changing global environment and business requirements?

Judged by almost all the important social, economic and environmental indicators, these two cities beat the Twin Towers hands down.

Our only claim to fame is that Kuala Lumpur is the cheapest city in the world for visiting businessmen.

What we want badly are those who will come to set up offices and live here and add richness not only to our economy but also to our national diversity.

Being cheap may count as a competitive advantage, but in our case, listening to the woes of foreign businessmen trying to set up operations here and dealing with the bureaucracy, we seem to offer a service that is cheap but with a nasty twist in the tail.

And when we factor in corruption, then doing business in Malaysia becomes costly.

Ever wondered why more foreign direct investment is not parking itself here? Talk to both the local and foreign business communities, and what they have to say based on their experiences would make your hair curl.

Both Singapore and Hong Kong, which the IDR aspires to rival, started as very corrupt societies and yet today are among the top 10 least corrupt countries in the world, according to the Transparency International Corruption Perceptions Index.

In short, they have shown that corruption is bad for business, especially global business, and they are making sure that the good old days will never come back to haunt them again.

Have we the political will to confront corruption decisively or have we run out of steam?

If the dream of a new super metropolis is not to become a fiasco and a burden, to be borne, as always, by the hapless taxpayer, the government must ensure that the IDR is as different from Kuala Lumpur as it is possible to be.

Dewan Bandaraya Kuala Lumpur has absolutely nothing to offer in either efficiency or integrity. Again, do not take my word for it; ask the long-suffering taxpayers of Kuala Lumpur.

We have the great fortune of starting from scratch, from the ground up, and we have the biggest advantage of all: The lessons we can learn from Hoing Kong and Singapore on what makes them tick as the preferred business destinations of East Asia and the Pacific.

No shame in learning from two "little red dots" which , in my book, are truly "islands of integrity".

In summary, therefore, do not put crooks in charge, so that good governance can take root to make the IDR shine even brighter than Hong Kong and Singapore and while we are in a dreaming mood, why not throw in Dubai for good measure?

We are entitled to our dreams. This is Malaysia, after all.

1 comment:

Anonymous said...

Maybe this is not Malaysia's dream after all.

Week of March 27, 1998
MALAYSIA-SINGAPORE Malaysia is studying a private proposal from Singapore to establish a free-trade zone near the new causeway linking the two countries. Kuala Lumpur's trade minister Rafidah Aziz is enthusiastic: "Our bilateral ties have always been good, at least on the private sector side. On the government side, it has always been good except that sometimes the little hiccups happen."