Editorial Notes

Mahathir's Forest City decision could deter potential investors: Sin Chew Daily

Malaysian Prime Minister Mahathir Mohamad has said that foreigners will not be allowed to buy homes at the US$100 billion (S$136 billion) Forest City project near Singapore, or granted visas to live there.
Malaysian Prime Minister Mahathir Mohamad has said that foreigners will not be allowed to buy homes at the US$100 billion (S$136 billion) Forest City project near Singapore, or granted visas to live there.ST PHOTO: JOYCE FANG

In its editorial, the paper urges the government to think through the potential impact of its decisions.

KUALA LUMPUR (SIN CHEW DAILY/ASIA NEWS NETWORK) - Tun Dr Mahathir Mohamad once again targets the Chinese investors, with Country Garden's multi-billion Forest City project in Johor being the latest victim.

All of a sudden, the prime minister announced that foreigners will no longer be able to purchase residential units in Forest City, and they will not be issued with permanent residency for buying a property there.

This is Tun Mahathir's latest move against the Chinese investors following the cancellation of the East Coast Rail Link (ECRL) and Sabah-Melaka natural gas pipeline projects.

However, Mahathir has not expressly shut the door on these projects, leaving room for further negotiations.

From his remarks made at various occasions and media interviews, it appears that Mahathir is indeed prepared for a fight with China.

Whatever consequences that may emerge from Mahathir's moves, the country's economy will invariably be the first to take the brunt.

Perplexing as they are, Mahathir's announcements have cast a cloud of unease over the public and investors on the new government's inconsistent policies.

 
 
 

Country Garden Group Chairman Yang Guoqiang has earlier told the public after being granted a meeting with Dr Mahathir that the PH government was supportive of the Forest City project.

But following the PM's sudden announcement, the real estate development giant is caught totally off guard and its operational and future development plans have now been disrupted.

To be fair, Forest City and all other real estate development projects in the country are subject to the relevant laws and regulations, and the government must produce the evidence that the sale of Forest City properties to foreigners contravenes a specific law and must therefore be restricted.

Mishandling of this matter could dent the investors' confidence as well as the new government's image.

The most adversely affected is none other than the economy of Johor state.

Johor Housing and Rural Development Committee Chairman Dzulkefly Ahmad is equally taken aback by Mahathir's remarks, arguing that the move will have a serious impact on the state's property sector.

A joint venture between Chinese and Malaysian developers, Forest City is a massive and important housing development project in Johor, with Chinese nationals making up the bulk of its purchasers.

The real estate market in Johor is reportedly experiencing stagnant sales at this moment, and the ban of sale of Forest City properties to foreigners is believed to deal an immediate further blow on the state's real estate market although it is still premature to anticipate the long-term effects.

Indeed Forest City properties are priced beyond the affordability of average Malaysians, and luring foreign buyers should not be seen as a matter that will jeopardise the country's sovereignty.

To be honest, the implementation of an innovative project like Forest City should have powerful catalytic effects on the country's economic development, especially in the areas of tourism, education and healthcare sectors.

As if that is not enough, the project has created countless job opportunities for the locals and the residential units are marketed to global buyers, not just the Chinese.

It should complement the government's "Malaysia My Second Home" project targeting foreign buyers keen to purchase properties and live here.

While the government can control any major investment project citing the country's laws and draw up appropriate strategies to safeguard the country's interest, it is imperative that it takes into account all possible consequences before making a major decision.

The government should come up with positive measures to minimise all possible adverse impact instead of making alarming statements that may deter potential investors.

Sin Chew Daily is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media entities.