SINGAPORE (Bernama) – It is good to have ministers from the Pakatan Harapan (PH) government coming regularly to Singapore, Malaysia’s second largest trading partner globally, to explain the country’s new policies.
It was Deputy Minister of International Trade and Industry Dr Ong Kian Ming’s turn to be here last week, and almost a month after the tabling of the 2019 Budget.
Finance Minister Lim Guan Eng dropped by two days after tabling the annual budget and met with the investment fraternity, including rating agencies.
Malaysia received Foreign Direct Investments (FDI) from Singapore totalling RM120.89 billion or 19.4 per cent of total FDI until the third quarter of 2018. This made it the country’s largest source of FDI.
Ong, a Fulbright scholar with his doctorate in political science from Duke University (US), was on a three-day working visit to the republic from Nov 28 to strengthen trade and investment ties between both countries.
As part of his busy schedule, he had meetings with among others, Singapore’s government agencies, business chambers and companies.
“They were interested to learn details of our new policies announced and to be announced by the government,” Ong told Bernama.
“We need to let them know details of the budget… to convince them that we are on the right track in terms of economic development, as well as our fiscal position,” he said.
Ong, who also has a Masters degree in Economics from Cambridge University, was also interviewed by CNBC, a business and financial news network.
He took the opportunity to clarify and explain some issues which included an initial “red flag” raised by a rating agency on national oil company Petronas and the budget deficit.
Ong said he explained that asking Petronas to pay a special dividend of RM30 billion was only a “one-off policy decision.”
“When the rating agency hears this, they will be more comforted… the level of confidence in Malaysia will also increase, while chambers of commerce have responded quite positively,” he added.
Lim, in tabling the 2019 Budget, had announced that the government expects revenue of RM261.8 billion next year, including the special dividend payment from Petronas, which is intended to settle outstanding tax refunds.
Asked whether the recent stake divestment in IHH Healthcare Bhd by Khazanah Nasional Bhd was part of an economic restructuring, Ong said: “It is part of Khazanah’s portfolio restructuring.”
The sovereign wealth fund entered into an agreement with Mitsui & Co. Ltd. of Japan to divest a 16 per cent stake worth RM8.42 billion.
“I am sure they have a long-term strategy in terms of the areas they wanted to invest in.. and just because they are selling some of the stake in one particular company, does not mean they don’t want to invest anymore.
“The proceeds from the divestment will be used as an investment in other areas. I’m quite sure it will yield a higher return for Khazanah.
“This is quite normal I think. Any government-linked investment corporation will have to rebalance its portfolio from time to time,” said Ong.