Guan Eng leads delegation in hunt for Korean investors

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One of the larger issues that arises in the face of the global economic slowdown and recession is that the foreign investor-driven, export-oriented economic growth model is clearly not working, especially in times like this when global demand has shrunk. With global stagflation or recession staring at us, capacity is rising and the trickle of foreign investors is drying up.

We should be focusing more on building up a strong, resilient, sustainable domestic economy by providing basic services (housing, health care, food security, public transport, education) rather than relying on foreign investors and now, foreign retirees.

But getting federal funding for such essential services is a problem in the Pakatan-run states and I can sympathise with the Penang state government, which is searching high and low for investors to stave off the effects of job losses. All the same, hunting for foreign investors is at best a short-term solution that does not address the fundamental changes that have taken place in the global economy including the emergence of other low-cost countries such as Vietnam and China, which have much larger domestic markets. We should know by now that many foreign investors will not hesitate to pack up and head for the exit when the global economy goes slack, leaving their workers stranded.

Our region today is a vastly different place compared to the time in the 1970s when Lim Chong Eu successfully lured electronics investors from Japan and the United States to set up assembly plants in Penang.

So I was interested to read about Guan Eng leading a 52-member delegation on a five-day trade mission to South Korea. The NST carried this report yesterday:

2008/10/29

GEORGE TOWN: Chief Minister Lim Guan Eng led a 52-member business delegation on a five-day trade and investment promotion trip to Seoul, South Korea, yesterday. The

Lim’s press secretary, Cheong Yin Fan, said companies from the private sector would promote a cluster of properties to Korean buyers at the Penang pavilion.

She said the state government wanted to promote the Malaysia My Second Home programme to Koreans.

Lim will meet epresentatives of Korean companies and investors in various sectors, which include medical devices, electronics, healthcare, education, tour, travel and recreation.

Among the members of the delegation is Deputy Chief Minister I Mohammad Fairus Khairuddin.

Now, it will be interesting to see how a Pakatan investment mission, with its commitment to CAT, differs from a BN junket. In this regard, my old friend Andrew (lots of Andrews around!) in Korea raises some questions, which, if taken in the right spirit, will give the Penang state government ample opportunity to demonstrate what CAT means in practice:

1) Why is this trip taking place now when the economic situation in Korea is really bad? The Korean Won has collapsed nearly 40 per cent this year. Thus, outward investment from Korea is more expensive and there is less outflow from Korea nowadays. Please note that the NST news report suggests that CM Lim & Co. want to attract Korean investment and retirees to come live in Malaysia.

2) The Korean economy is facing a major financial and emerging economic crisis due to massive financial (mainly debt) outflows. What makes Guan Eng & Co. so certain they will get Korean or other investors to invest in Penang? See Korea Times articles here and here.

3) They are attending the Asia-Pacific Tourism Investment Conference and Expo 2008 in Seoul. Website of the APTIC is here. This is mainly a Tourism Investment Conference. What tangible benefits does the Penang Govt expect to gain from participating in this expo? …CM Lim (should) detail concrete specifics … (and not just talk about) prospective, hoped-for gains sometime down the future, etc.
4) What is the total cost of this trip of Lim Guan Eng and 52 others to participate in APTIC?
5) Who is footing the bill of Lim Guan Eng and 52 others to APTIC?
6) Please provide a list of all those on this trip who currently are in State government and/or who work for any State/Federal government agency. Who is paying for their travel? Please provide specific answers.

This is an opportunity for the Penang state government to show CAT in action and to prove they are different from the BN.

As as aside, I will never understand some of these developers. They build all these expensive homes and condos in the hope of fatter profit margins at a time when many Malaysians are desperate for affordable homes here. And then when they cannot sell them locally, they go looking for foreign investors to buy these expensive properties, which are beyond the reach of most Malaysians.

Same goes for “health tourism”. Many Malaysians are finding it difficult to afford quality health care and there are long queues in our general hospitals, which are understaffed. And then they allow these upmarket private hospitals to be set up – which end up hunting abroad for patients (as many Malaysians cannot afford their services). But where do you think these private hospitals will pinch their medical staff from – if not invariably from the local state-run general hospitals, further aggravating the brain drain from the public hospitals and lengthening the waiting lists.

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14 Comments on "Guan Eng leads delegation in hunt for Korean investors"

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EinA
EinA

For those sceptics, full disclosure has been given – see Screenshots at http://www.jeffooi.com/ along with a comparison of a similar trip done by BN which cost 3 times as much!

archie
archie

52 members to Korea are fine.

Whether the trip is success, then let us wait,see and evaluate the LGE government’s Interim or Year-end Korean Investment To Penang Report by end of next year (if published).

EinA
EinA

You wanted to see how a PKR delegation would be different to a BN junket? Here’s a clip from Jeff Ooi’s blog:

“You’d never feel the real constraint of space until you tried to save on hotel bills in South Korea.

I joined my colleagues, and a director of a developer listed on Bursa Malaysia, to check in at Samsung’s Casaville Residence in downtown Seoul near COEX. It’s a no-frill one-room apartment with two t-star Intercontinental hotels shouting across two blocks away — 12 ft x 12 ft, with not even shampoo and shower gel save a small bar of soap.”

Disappointed
Disappointed

Anil – your tone has been rather negative of late against the Penang Govt. Hope you can write something about what the govt should be doing about loweringprices….don tell me you are not affected unless you eat nothing but home cooked meals..even so…you will be affected.

Ramesh
Ramesh

Folks

Vote for UMNO? Ha!Over my dead body..send me a body bag better

LBJ
LBJ
Cameacross this news in PCworld. “Motorola officials confirmed Friday that $800 million in cuts planned for 2009 will require laying off about 3,000 workers, with a little more than two-thirds of those job cuts coming from the handset division. About layoffs will be made globally “across all businesses and functions” with a “little over two-thirds of these layoffs in the handset division,” a spokeswoman said in an e-mail. The communications equipment maker had 66,000 employees at the end of 2007, she said.—-” By the way, Penang is one of the major center for handsets for Motorola. It make sense for… Read more »
omo
omo

At least LGE is doing something as Penang is no longer in auto pilot. Further LGE has Datuk Lee from previous Government to advise If we think there are better ways, give suggestions rather than just critise. Ask him when he return from the trip about the expenses incurred.

EricWKS
EricWKS
Personally, i will agree with LGE trip to korea. For a normal business meeting, investor normally will arrange number of senior executive(s) to negotiate/request/review the deals offering from LGE team. As mention that various sectors include medic/electronics/healthcare/educatation/tour/travel/recreation/2nd home program, total up 8 different sectors. 52 members are consider fine. Whether the trip result is either success/fail/pending, i will say at least LGE team tried their best to attract foreign investor better than nothing (taiwan trip). My calculation is simple, 52 people are trying their best to bring money into malaysia, which are much more worth, compare to paying out money… Read more »
miwaki
miwaki
Yes,you are right Kangelar,we must vote for UMNO so that Penang will have plenty of money to develop the state.Infact,Penang doesn’t even have to attract Foreign inveatment since fund will be channelled to Penang through UMNO’s pockets.I’m pretty sure Penang will get at least 50% of the total fund provided by the BN government.With UMNO people as chief minister,Penang will overtake KL since KL is still under PR and funds for KL will be detoured to Penang. Who knows,George Town will be declared the capital of malaysia one day since KL has lost its attractiveness being an opposition controlled territory.UMNO… Read more »
kangelar
kangelar
When BN MPs went to Taiwan for a research in agriculture, Gerakan leaders didn’t slam BN goverment. But, when CM Lim lead a 52 delegates to South KOrea, Gerakan leaders slammed the PR goverment. They accused CM LIm didn’t take care of Penangite and waste tax payer money. These Gerakan leaders think money can grow on trees to develop Penang. Do you think federal goverment will help Penang’s economy? If they are so sincere and farsighted, they had constructed mass rapid transit and tram system long time ago when our country resources still in abundant. What happen now when crude… Read more »
Lesley VE
Lesley VE

Let’s not jump the gun. We need to invest today for the future. I’m sure it’s not even 0.05% of the RM1.6 billion for the damn helicopters nad there could be ROI.

True Malaysian
It seems to me the much propagated CAT works selectively. The perception of the people is very important. If truly there is CAT on all public spendings, the Government of the day should share the plan event with the Public. In the private corp sector, there is always a Trip report needed on the learning, benefits, gain and tracking to evaluate the end results. Is the CAT the same as the Corp Governance of CAT???? My guess now is definitely not…… it is the Right and legal avenue for the Government to spend public money within the criteria define. The… Read more »
chong
chong

Way to go, LGE. :up:

hey Han2, it’s better for you worry about getting a murder suspect as a leader…

Han2
Han2

52-member delegation? I suppose they are now all on Business Class too? I am sad….

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