Mahathir says land sale to China investors detrimental, unlike investment in manufacturing

Former Malaysian prime minister Mahathir Mohamad waves to his supporters at the end of his speech during the launching of the Malaysian United Indigenous Party in Shah Alam.
Former Malaysian prime minister Mahathir Mohamad waves to his supporters at the end of his speech during the launching of the Malaysian United Indigenous Party in Shah Alam.PHOTO: EPA

KUALA LUMPUR - Malaysia's former prime minister Tun Mahathir Mohamad on Tuesday (Jan 17) responded to criticisms by the Sultan of Johor over the sale of land to Chinese companies in the southern state, insisting that such investments are detrimental, unlike foreign investments in the manufacturing sector.

The escalating feud between Dr Mahathir and Sultan Ibrahim Sultan Iskandar has centred on the US$60 billion (S$85.8 billion) Forest City development, which will see four islands reclaimed on the Malaysian side of the Johor Strait. The project is helmed by the Hong Kong-listed Chinese mega-developer Country Garden and a firm partly owned by the Johor ruler.

In a letter to The Star newspaper, Dr Mahathir, widely credited for modernising Malaysia and boosting its manufacturing sector during his 22 years in power, said: "Yes, I promoted foreign direct investment. But it was not about buying land in Malaysia, developing them and selling them to foreigners who will stay here.

"FDI is about investment in the manufacturing industry. Malaysian companies will construct the building and Malaysians will work in the industries. They will acquire skills and start their own manufacturing business," Dr Mahathir said in his letter.

He added that Malaysians are completely capable of undertaking the land development projects being given to Chinese companies, which then sell most of the properties to their countrymen.

"When foreigners buy land, there is not even an inflow of capital. Much of the money will be borrowed locally. And they can do their business with their own banks. Whatever foreign companies earn will be expatriated, and will result in outflow of capital," he said.

Dr Mahathir also said Chinese deals in Malaysia should be transparent, calling for the publication of "all documents about the investments, the number of workers, their home countries, the buyers, the banks which finance and all expatriation of funds".

Dr Mahathir has blogged several times and spoken to the media about his concern that Prime Minister Najib Razak is allowing mainland Chinese companies to buy vast swathes of land, particularly in southern Johor. His rhetoric on Chinese projects in Malaysia is seen as part of a campaign to unseat Mr Razak.

In his letter to The Star, Dr Mahathir said his assertion that Johor will be flooded with Chinese nationals was based on previous news reports.

"Now, what did I say? Nothing more than repeating a report by Bloomberg in the press. But I appreciate why Bloomberg is not challenged nor denied," he said.

His letter was a response to The Star's interview with Sultan Ibrahim Iskandar published in the English daily on Monday.

The Johor ruler had said he was "deeply offended and hurt" by the attacks against mainland Chinese investments in the state, saying that this, if left unchecked, would drive away investors.

In a no-holds-barred interview, a visibly upset Sultan Ibrahim singled out Dr Mahathir for "putting political interests above Malaysian interests, particularly Johor".

The Sultan had said investors in the Forest City project were also taking advantage of the Malaysia My Second Home (MM2H) programme, which was launched in 2002 when Dr Mahathir was in office.

"During his tenure as prime minister, he was asking Malaysians to 'Look East', but now he is criticising when Chinese investors come here to invest," said the Sultan.

He added that Dr Mahathir was "playing the politics of fear and race which has no place in Johor as I do not believe in racial politics".

shannont@sph.com.sg