KUALA LUMPUR: Fat incentives does not mean anything in attracting foreign direct investments (FDIs) if political stability is not in place, former international trade and industry minister Tan Sri Rafidah Aziz said.
Rafidah said Malaysia's competitive advantage, however, remained as the country still has the foundation for being a regional hub.
"This is very important to people they want to stay here, they want to be permanent features in the economy. If they see governments change, coming in power as and when they like without going through the process of election, there is lack of confidence (among investors)," she said during TV3's Money Matters on "The Economic Recovery" on Saturday.
"No matter what incentive you list out in a big fat book, if the government of the day, the political environment is not up to the mark, they (international investors) are going to a country where you may have less incentives but there is a stability, the confidence, that trust that they can have when they invest multi-million dollars there or billions of dollars there.
"I do not think I am wrong, investors are very sensitive. They want to see a long tenure in the country. Those days when the government were there for decades they never asked this question. They just want to see the incentives and the facilitation," she added.
The government has been offering various incentives to international investors to set up their businesses in Malaysia.
This includes a 10 to 15-year tax exemption for new foreign direct investment in the manufacturing sector with capital investment of at least RM300 million.
Meanwhile, Rafidah said the National Recovery Plan (NRP) had only focused on Covid-19 recovery and did not address side-to-side the national recovery in other areas.
"NRP is only addressing one aspect of recovery. It has to be done in parallel as the national recovery in other areas - economic sector, social sector, healthcare sector and education sector.
"Unless you do the second portion in parallel, when you do have that situation later on, god willing, when Covid-19 is managed, then we are well prepared with having investments coming in," she added.