Apr 23, 2012

Malaysia - The 'absent' Arab investors


NEW MISSION - Investment bodies must continue promotional activities, trade missions

DURING the world economic crisis of 2008, Arab investors who were flushed with oil money dumped their money all over the world, including in Malaysia, to find the best business deals.

It was a blessing for Malaysia as well as the region because for the first time, West Asian countries began to realise that the West is not necessarily the best place to get returns for their money.

So a spate of investments and business deals became the headlines of several major business newspapers as multi-billion dollar deals were announced one after another, covering all sectors such as property, oil and gas, medical tourism, Islamic finance and others.

Arab tourists came in droves to visit Asia, especially Southeast Asia as they escaped Western stereotypes, which branded them as terrorists.

By coming to Asia, they get value for their money due to the low exchange rate as well as a taste of Asian hospitality.

But of late, the Arab investors who were once gungho in signing on the dotted lines have suddenly become noticeably absent.

Although memorandums of understanding have been inked, investments have yet to trickle in with some projects still on the ground and have yet to produce results.

It was reported that Arab investors who were originally the master developers of 902.8ha at Iskandar Malaysia, Johor, known as the Medini development, will no longer be involved and about 80 per cent of that land has since been sold to other foreign investors, including those from East Asia.

Where are all the the major Arab investment groups?

Understandably, some countries like the Dubai property market in the United Arab Emirates was hit by the property bust but others like Saudi Arabia, Oman, Qatar and Kuwait were relatively unscathed, registering double-digit growths.

Who knows, maybe they want to keep a low profile at the moment to watch their counterparts, being cautious and making a move closer to home like investing in Turkey or Iran.

Malaysia on the other hand has also gone quiet with the issuance of Islamic banking licences, sukuk, joint ventures and other trade collaborations.

It has been a while since there has been news on Malaysian companies going on port and property investments in Saudi Arabia, power plants construction in Pakistan or building a new highway in Bangladesh.

This is where Malaysia must play its role to keep them coming and entice Malaysian companies to continue investing abroad.

Although times may be hard and the Arab investors want to lie low for the time being, public relation efforts must continue as they are after all our friends.

This is where investment and trade agencies such as the Malaysia External Trade Development Corp, Malaysia Investment Development Authority and other public and private trade agencies, spearheaded by the International Trade and Industry Ministry, must continue with their promotional activities and trade missions.

After all Malaysia is the world's biggest issuer of sukuk and on its way to become one of the world's largest hubs in Islamic finance and halal industry to name a few.

There are still a lot of areas to cover such as the oil and gas industry, construction, uniformity in Islamic finance and halal standards or new untapped areas such as the zakat world among Islamic nations, Islamic dinar-based business transactions or Islamic microfinancing for Muslim entrepreneurs all over the world.

Business Times



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