KUALA LUMPUR: Malaysian small and medium enterprises (SMEs) are missing out on potential investments due to lack of response and delays in approvals, said Entrepreneur Development Minister Datuk Seri Mohd Redzuan Yusof.
“There are foreign sovereign wealth funds that want to come to this country to establish a joint development investment fund for the benefit of SMEs. This was raised to the appropriate agencies in the government but some of these funds now seem to be shying away because there’s no response,” he told reporters at the Malaysian Economic Summit 2019 today.
Redzuan said in the absence of those resources, Malaysia has to be more creative in trying to attract funds to help SMEs.
“For example, I’ve been approached by Japanese banks to put money into this country to help SMEs but still we need to go through the regulatory process. That may take a bit of time, but we are focusing on trying to get these people in to place money here, and for the benefit of SMEs, if we don’t have enough funds to accelerate the growth of SMEs,” he added.
Redzuan noted that there is interest from sovereign wealth funds from Bahrain to participate in the halal industry and sovereign wealth funds from China seeking to relocate SMEs from China to Malaysia, as well as sovereign wealth funds from other countries that want to invest in infrastructure development here.
However, the government is cautious on what kind of fund is coming in from other countries and these investments need to go through the regulatory process, and obtain approval from the Cabinet, central bank and others.
“We need to be sure, get clearance from BNM (Bank Negara Malaysia). When the question was raised, of course we must make sure we are not involved in money laundering schemes. Other countries are doing that. If we look at similar joint development funds, they are already around our region but we are not party to it,” he said.
In his keynote address, Redzuan said the government is not moving fast enough to get funding for SMEs and is not facilitating the approval of many potential investments, which has led to many potential projects being delayed and affecting the economy.
While the government is refining policies, the speed of getting things done is an issue and the bureaucratic process needs to be reduced while some good policies are not being implemented the way it should.
“Due to the trade war, there are at least eight Russian firms set up in China willing to relocate to Malaysia. But here we are, as a government, slow in picking up and blame should be on me, on us, but we are trying very hard to create the environment, the ecosystem. For example, they have suggested establishing a joint development investment fund, sovereign wealth fund but there are no answers for example from Khazanah,” he said, referring to state-owned wealth fund Khazanah Nasional Bhd.
Redzuan said innovations are moving fast but the government is not providing the ecosystem to fill the gaps in trying to commercialise these innovations. “We are not facilitative in terms of rules and regulations, in terms of creating space for them to thrive ... some of these innovations are taken out of this country and they thrive in other parts of the world,”