Rife corruption drives investor away

There have been many high hopes after the last few years with regard to Malaysia being a top investment destination, but in my opinion, it has never really lived up to expectations. I have written previously about Malaysia becoming a manufacturing hub for companies like Hyundai, but that positive news has been tempered with allegations of imagerife corruption in the government. Yes, I agree that in some countries corruption is a way of life; India for instance. But India’s economy is much stronger, and you may recall I recently placed them on my hold list for at least six months, to see if there is any movement forward on important legislation.

Currently, the manufacturing sector is in a recession with the latest PMI coming in at 47.7 in the last quarter of 2015. In the same year, GDP growth slowed to 4.7% from a high of 6.5% in the second half of 2014. Malaysia has, however, successfully transitioned from an exporter of raw materials into an economy with its largest sector being services.

That sector accounts for 54% of GDP, though manufacturing sectors account for 25% of GDP and 60% of exports. The recent claims that Prime Minister Najib transferred 2.6 billion Ringgits to his personal account have not helped the political stability in that country, something that is vitally important to a foreign retail investor.

…Unfortunately, as Bloomberg’s article titled “Return of Oil Slump Haunts Najib in Malaysia Budget Déjà Vu” details, nothing…

source: DMS Advisors

Posted in BN government, jijik

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