Monday, August 3, 2009

Drawing property investors

Carrying out police reforms will show that M'sia is serious about tackling crime

MALAYSIA aims to sell RM20 billion (S$8.2 billion) in domestic real estate to foreigners over the next decade, three times more than the current average of RM600 million or 2 per cent of the RM30 billion annually transacted in the residential market.

It hopes a newly incorporated public-private initiative Malaysia Property Inc (MPI) can successfully brand the country as 'as an international property investment destination.'

Indeed, selling an average RM2 billion a year to foreign buyers ought not to be too onerous given that the local currency is increasingly buying less against major foreign currencies. MPI has also commended recent moves to liberalise the property sector, which makes it easier for foreigners to purchase commercial real estate.

Those who invest cite many reasons for doing so: the warm and mild climate, centrally located geographically, wide English speaking population, general political stability, excellent food, and reasonably good quality build.

But although Malaysian properties sell at only a fraction of those in the region - especially Singapore and Hong Kong against which they are commonly compared - the MPI acknowledges crime and poor public transport are major turn-offs to investors, one widespread, the other sorely lacking.

Syndicates' prey
Because it is more insidious, crime is the more immediate problem. According to news reports, the total reported cases of crime last year was 211,648 or a 35.5 per cent increase over 2004's of 156,648.

Crime had begun to rear its ugly head in the late 1990s - in 1997 total crimes reported was 121,176 cases - but because fighting crime was never a priority, it has emboldened criminals and made it necessary to be vigilant, even at airports, restaurants, and hotels, given the many syndicates preying on the unwary.

Whether the country has become known for the 'easy pickings' there have been reports of syndicates flying in for a week or two to loot before flying out again.

The proliferation of 'gated' communities - questionably illegal because residents have decided to close entry points to public roads with drums and bars - reflects the insecurity. In the extreme, some consider themselves prisoners in their own homes.

Prime Minister Najib Razak last week set the home ministry the target of reducing crime by a fifth by the end of next year as part of its key performance index.

Only in recent times has he conceded crime to be a major problem. Many found his comments last year that crime in the country was actually lower than in Japan and Hong Kong and that it was only public 'perception' that it was on the rise, incredulous and out of touch.

To upgrade the police force, the government has provided RM8 billion under the current five-year Malaysia plan to 2010, triple the amount in the previous plan. The whopping increase, notwithstanding, 97 per cent of 6,678 respondents in a recent poll by the Home Ministry said they do not fee safe because of the high crime rate.

The National House Buyers Association has projected communities will be increasingly gated and guarded until residents feel more secure.

Or as a concerned citizen observed in a letter to the editor of a local newspaper: 'The ever increasing number of gated residential communities points clearly to two conclusions: The public do not feel safe from crime, and the public has given up on the police for protection.'

The government ought to seriously consider instituting the police reforms suggested by the Royal Commission set up in 2005 as this would not only help restore public trust in the police but also inspire confidence that Malaysia is serious about tackling crime.

That would arguably be a more effective selling aid than planned international road-shows.

Source: Business Times, 3 Aug 2009

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