Economy

What is Happening Next on Forest City: Politics or Economics

Since my article on Dr. Mahathir’s wrong move on Forest City appeared in my blog and social media there has been a great deal of reaction and numerous comments by the public.

I estimate that more than 80 per cent of the online response has been to support my position that the state and federal governments need to honour the sales agreements made and to make it clear that there is no intention to discriminate against those locals and foreigners who have already purchased units in that, and other similar property development in the country.

However, there continues to be further controversy – as well as confusion – being stoked over Forest City.

My Concern and Suggestions

I had warned that the value of the Forest City development could run up to US$100 billion and asked where can Tun Dr. Mahathir find investors putting up so much money for one project?

It is important that the new Pakatan Government draws a distinction between politics and economics. If PH wants to play politics, then it will send the wrong signal not only to China or Chinese investors but also to all foreign investors.

For now, I would like to provide the following suggestions on Forest City to prevent a further recurrence of the “shooting themselves in the foot” phenomenon which appears to be happening with increasing frequency with various PH leaders.

First, make it clear that foreigners buying property in Malaysia and getting permanent residence or citizenship are two different and separate matters. Approval for the second – that is, residence or citizenship – does not automatically follow the first.

Most foreigners buying property in Malaysia do so either because they are working expatriates or buying the property for rental or capital appreciation. This is the case with foreigners investing in properties whether in Penang, Kuala Lumpur or Iskander.

Secondly, please don’t try to alarm Malaysians or foreigners by fictitious or ridiculous claims about how Forest City will result in Malaysians having to live in “wooden houses” as a result of rich foreigners buying up the units there.

The most recent statement by Tun Dr. Mahathir on Forest City was not only below the belt or out of line. His comments appeared to be aimed at the Malay readership of Sinar Harian. It will definitely be used to fan xenophobic feelings within the Malay community and worsen race relations.

Thirdly, there needs to be damage control on Forest City by the authorities. This can take several forms such as reassuring that there is no change in policy on Forest City and other foreign oriented property development in Malaysia. Or reassuring that there are sufficient laws to protect the interests of Malaysians from the hyped up and grossly exaggerated “Chinese onslaught”.

Finally, I should remind the authorities that further confusion and delay on the Forest City development will only result in greater damage to the local and national economy which is increasingly dependent on tourism and services as well as the employment created by property and infrastructure development.

In my experience, a slowdown or delay will also open the door to abuse and corrupt practices and result in a lose-lose situation for all, especially the locals.

 

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