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PETALING JAYA: The emergency proclamation appears to have provided a hint of political stability and some relief for the markets, but economists believe investors will see through the government’s rhetoric and realize that the supposed certainty is fabricated. and temporary.
During his announcement on Tuesday, Prime Minister Muhyiddin Yassin had assured interested parties that Malaysia would remain open to the public during the emergency, which will last until August 1 or until the number of cases decreases and stabilizes.
“This period of emergency will give us much-needed calm and stability, as well as allowing us to focus on economic recovery and regeneration,” he said.
However, Mydin Ahamed Kameel Mydin Meera, former dean of the Institute of Islamic Banking and Finance at the International Islamic University of Malaysia, said that despite what the prime minister said, “an emergency is surely not a sign of stability” for the investors.
“Investors are smart people, they can see through what is happening in the country,” he told FMT, adding that many will realize that it has little to do with the pandemic.
Investors will already be taking a longer-term view and looking beyond the emergency, making assessments based on what they think will happen next, not just the current situation.
Shankaran Nambiar from the Malaysian Economic Research Institute said that while stability was once one of Malaysia’s selling points for foreign investors, the “political uncertainty” that has plagued the country of late has stripped Malaysia of this. key selling point, and many will see it. emergency that brings only a fleeting stability.
“The current emergency may avoid the problem of instability for now, but for how long?” he asked, saying that it was clear over the past few weeks that most of Muhyiddin, if he has any more, is getting dimmer.
“Even after GE15, whenever it is held, it is not clear if we will have a party with a clear and solid majority as was the case with Barisan Nasional.”
“Who knows, over the next decade we may not be certain of political continuity,” he said.
Madeline Berma, a member of the Malaysian Academy of Sciences, said that even if some investors buy the stability brought on by the emergency, there are still many negative effects that could negate the benefits of the proclamation.
“The emergency itself will diminish the appetite of multinational companies (MNCs) to invest. Combined with other factors, such as the weakness of SMEs and other domestic private investors, and increasing competition for foreign investment from regional economies, we will see a downward trend in the quantity and quality of investment in Malaysia.
“Some foreign investors see the proclamation as an undemocratic move and that can distort the market and lead to a higher cost of doing business,” he said.
