October 21, 2009


Investment always has some risk.

Companies try to minimise risk when deciding where to invest.

Would Malaysia be attractive as a place to invest?

Do the slow internet speeds make it attractive? Australians don't think so.

Does the lack of an independent judiciary make it attractive?

Since Mahathir wreaked havoc on the judiciary, it has been under the control of the Executive, meaning under control of the Prime Minister.

Let's imagine we are a foreign company considering where to invest.

We look at Malaysia and note it has a large, fairly educated, fairly literate population, English is widely spoken.

That is good, the workforce won't be much problem.

The government offers large tax breaks as incentives. Again good, though artificial, as taxes are created by the government.

Companies don't operate in a vacuum, they need to liaise with suppliers, distributors, etc.

Legal disputes may arise.

Let's imagine a legal dispute with a GLC (government linked company).

The legal system in Malaysia is NOT independent, it is under control of the Prime Minister.

Government officials, or their relatives, may have financial interests
in the GLC.

So, will the court be fair and objective or favour the GLC?

It makes investing in Malaysia a gamble.

There's the DNA Bill.

It could be a tool to catch people stealing inventory.

What else could it be?

Could it be used for blackmail?

Could the company be pressured to give away trade secrets, such as
secret formulas?

An executive of the company could be told if they don't give certain information to a rival company, which just happens to be a GLC, the executive will be charged with adultery and DNA proof of adultery will be presented in court, where DNA evidence, under Clause 24 of the DNA Bill, can't be challenged.

The company considers other countries, Singapore, Indonesia, Thailand as alternatives to Malaysia.