Investors will know better what to expect in the coming years, Center for Market Education CEO Carmelo Ferlito said.
He said politicians on both sides of the aisle will now have to show foreign investors their vision of Malaysia to convince them to bring their investments into the country.
“They will have to assure investors that Malaysia welcomes and promotes economic activity and they can only do this by showing potential investors how they will deal with the problem of growing government interference in the market,” he told FMT Business.
Ferlito said investors have been reluctant to put their money in Malaysia because of the lack of a clear economic agenda and vision, an inadequacy that has stemmed from the nation’s political instability since 2018.
“Since then, the investment landscape in Malaysia has deteriorated and this is due to several issues, namely restrictive labour legislations and state interference in the economy through the imposition of ceiling prices. This has kept investors ‘at the window’,” he said.
Ferlito said the general election is necessary to put Malaysia back on a reformist agenda aimed at rebuilding economic openness and instilling a pro-market attitude.
In the time until the election is held, he expects investors to take a “wait-and-see” approach. “They will want to know which party takes over the reins of government before they make decisions to invest,” he said.
Malaysian Investment Development Authority chairman Sulaiman Mahbob said the onus is on the new government to re-table the budget given that the proposal presented by finance minister Tengku Zafrul Aziz last Friday is also nullified with the dissolution of Parliament.
He said there would be some reaction from the stock market and the money market in the short term, but he could not say if it would be positive or negative.
“However, in the long term, I expect to see investments come back equally fast if the situation returns to normal,” he told FMT Business.
In an announcement at 3pm today, Prime Minister Ismail Sabri Yaakob told the nation that Parliament was dissolved from today to pave the way for the 15th general election.
He said the objective is to return the mandate to the people in view of the political instability in the country after three changes in administration in the span of two and a half years.