Setting sights on regaining investors’ confidence

The trust deficit presents an uphill challenge for MITI’s Darell Leiking

by P PREM KUMAR & ALIFAH ZAINUDDIN / pic by ISMAIL CHE RUS

For a trading economy like Malaysia, access to markets and investments is a major concern in these times of rising trade protectionism. (TMRpic)

IT HAS been a wild three-month ride for a “new Malaysia” that has seen sweeping changes made at the executive to the judiciary and right across the corporate and public domains.

With the return of Tun Dr Mahathir Mohamad at the helm of the government, the country is charting a new course guided by an anti-corruption ethos. The journey so far hasn’t been all smooth.

The revaluation of debt to above RM1 trillion has put constraints on the government’s fiscal health and led to the suspension of several multibillion-ringgit infrastructure projects and a re-investigation into the 1Malaysia Development Bhd scandal.

The change in power at the federal and state levels has seen investors adopt a cautious tone in the initial few weeks, but the latest economic indicators point to a recovery in sentiment as investors return in anticipation of a greater fiscal and policy clarity from the new ruling government.

For a trading economy like Malaysia, access to markets and investments is a major concern in these times of rising trade protectionism and the man tasked with this responsibility is International Trade and Industry Minister Darell Leiking.

The Penampang MP recently sat down with The Malaysian Reserve for an hour-long interview to speak about regaining confidence as his main priority, the stature of Prime Minister (PM) Dr Mahathir as a world leader and reviving an old economic policy to boost trade.

From Sabah to Putrajaya

Darell will have to convince leaders around the globe that Malaysia is rebooting itself for the better. (Pic by ISMAIL CHE RUS/TMR)

It has been little over a month since Darell was sworn in as Cabinet minister on July 2.

The 47-year-old lawmaker, who is deputy president of Parti Warisan Sabah, grabbed the interest of many with his distinctive Kadazandusun headgear that day.

In that historic moment, he effectively became the first minister from Borneo to lead the Ministry of International Trade and Industry (MITI).

Expectations are high on Darell, who succeeds Datuk Seri Mustapa Mohamed. His first order of business is to recover some of the faith and goodwill lost over the past few years in Malaysia.

“My priority is to get back that confidence. We will make a lot of visits all over the world to ensure there will be new foreign direct investments coming in and ensure all our trading partners have that feel-good factor about us again,” he said.

The trust deficit presents an uphill challenge for the newly appointed minister. Apart from arranging meetings with ambassadors here, Darell will have to convince leaders around the globe that Malaysia is rebooting itself for the better.

“Issues of corruption within the previous government did not bode well with us. When countries question how you run your government, obviously the people in business will not dare to come and invest because their own government has questions over our government,” he said.

Darell is confident with the new policies taking shape, the trust can be regained and countries can see Malaysia as a strong partner in the region.

‘Dr Mahathir’ Factor

At the heart of this recovery plan is Dr Mahathir, said Darell. One can doubt his intent as a politician, but there is no denying the 93-year-old statesman is an exceptional administrator.

You would think if the country has a RM1 trillion debt problem, Dr Mahathir would be the best person to solve it. Conveniently, he is in the position to play the role. The political veteran has wasted no time to engage his counterparts in other parts of the world.

Over the last two months, the PM has visited Japan (twice) and Indonesia and has received visits from Chinese Foreign Minister Wang Yi and US Secretary of State Mike Pompeo.

Out of these meetings, the PM has spoken about enhancing bilateral ties, securing a yen loan and building an Asean car.

The PM is expected to meet his counterparts in China later this week to review the terms of several mega projects including the East Coast Rail Link and other gas pipeline projects.

Darell, who will be part of the entourage, expects the visit to be a watershed moment.

“You have the foreign minister of China and the US secretary of state coming here at about the same timeline (just before Dr Mahathir’s visit to China). This shows it will be a highly anticipated meeting. This could be the moment where Asean can take the lead in solving a lot of the problems that the global economy is facing,” he said.

“More so with the tariff war, the non-eye-to-eye discussions among some countries. Dr Mahathir, being a very senior man and one of the most energetic 93-year-olds I know, may be able to take lead of Asean and solve a lot of problems the rest of the world are facing as well,” he added.

Bilateral Over Multilateral?

A major theme in the global economy is the US-China trade spat. The world’s top two economies have been locked in a tit-for-tat trade war since early last month.

In its latest move last Wednesday, Beijing unveiled its retaliatory tariffs on US$16 billion (RM65.36 billion) of American goods, matching Washington’s move to impose 25% duties on the same value of Chinese imports.

Darell said this presents an opportunity for Malaysia to leverage on enhanced bilateral trade with the two countries.

As of last year, China continues to be Malaysia’s largest trading partner with total trade rising by 20.6% year-onyear (YoY) to RM290.65 billion. Trade with the US had also expanded by 16.3% YoY to RM158.01 billion in 2017.

While the minister did not confirm any talks of potentially concluding a free trade agreement (FTA) with the US, he did stress the need for bilateral arrangements.

“With the challenges we have today when there are so many countries grouped up together through FTAs and other agreements, we cannot allow ourselves to be left behind. So, we will deal with a lot of countries bilaterally first, while we work on partnerships or agreements with other nations,” he said.

“We have the sovereign duty to deal with other countries bilaterally first, but we will have multilateral agreements as well. For now, bilateral is what the PM wants to do,” he added.

When asked about Malaysia’s stand on the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership and the Regional

Comprehensive Economic Partnership, Darell said there have been no decisions made on the two deals yet.

“For now, let the PM get a full feel of this. After all, we have no set timeline for ratification,” he said.

Reviving BIMP-EAGA

As a federal minister originating from East Malaysia, Darell sees opportunity for economic growth in the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA).

The economic subregion covers a land area of 1.6 million sq km with an estimated population of 70 million.

Initiated in 1994, the BIMPEAGA aims to accelerate economic development in the four areas that are geographically distant from their national capitals, yet in strategic proximity to each other.

“That route is a belt that we should have. It is an economic belt that has about 70 million-80 million people if you combined the whole stretch.

“It is a huge market. It is something we need to build. Of course, the state (Sabah) will push for it, but on my end at MITI, I will ensure the nations can work together and we will assist them where we can,” Darell said.

The trade minister is expected to push on this agenda by highlighting opportunities in the economic belt in his trip to Jakarta.

“It was initiated a long time ago, but I think the focus was not there because it involves immigration, transit and security as well.

“But now, we need to. While the world tries to enter a multilateral agreement, we have one right in front of us and we are not looking into it,” he said.