ABSTRACT
Across the border, Malaysia has suffered in the postcrisis corporate environment, being reduced to relatively low levels of foreign multinational investment initiatives. The country has tended to be difficult for incoming firms, owing to its ethnic heterogeneity and the concurrent impact upon employment regulation. Executives bemoan in particular the enforced quota of Bumipatra Malay locals who are required to serve on joint venture boards. In the words of one Dutch senior manager from the petrochemical sector,
The prevalence of distinct racial groups is also cited as a marketing research problem, evidenced by the need for the manifold translation of questionnaires to accommodate these differences. Malaysia also tends to lack the kind of investment-friendly tax laws that are offered by, say, the Thai board of investment, with its eight-year tax breaks and attractive industrial zones. Finally, Malaysia still has its currency – the ringgit – pegged to the US dollar, which is sending alarm signals to a plethora of potential foreign investors in case the ringgit should ever be allowed to float, particularly when one considers what then happened to the Thai baht in 1997.
