Do read this news in TheStar first before continuing. I am not the owner of any multinational company but let me tell you this. Multinationals are not relocating from Singapore to Malaysia because of currency. The reason is because, if it’s due to currency alone, there are SO MANY MORE choices which are certainly cheaper. In case everyone is still thinking Ringgit is about to sink into the deepest ocean, think again. Assuming you are a multionational in the oil and gas industry. You wanted to relocate to Malaysia from Singapore because of the reason stated, which is ringgit. You try to relocate your staffs from Singapore to Malaysia. Instead of paying them in SGD, you want to now pay them in RM. Tell me honestly, how many of the staffs would be willing to accept this transfer? If you are the staff concerned, would you move? Moving staffs over is thus NOT possible.
Well, what if the talents you want are NOT available in Malaysia then? If there are no such talents, no multinationals with a clever managing director would decide to MOVE to Malaysia. Without the right talent, how will the company operate? Without the right people, they would lose out to their competitors who are still operating with good talents! In conclusion, it’s about the AVAILABILITY of the right talents at a lower price which has helped the multinationals to decide to relocate.
Of course, there are others who would now say, that these multinational may be moving because of cheaper office rentals! I was working with a Japanese manufacturing company for four years and during that period, I handled many customers from different industries. On many occasions, they needed to send out their finished goods to their end-customer FAST. This was the reason why manufacturers always build their plant nearby airports or ports. Connectivity is key. Even IF the office rental is even cheaper than today but if Malaysia is not well connected to the rest of the world, the decision to relocate from Singapore may still happen but it’s not going to be Malaysia.
There are actually even more reasons why these multinationals relocate but suffice to say that multinationals do not move into Malaysia because of ringgit’s depreciation. To any expert which is still using that as the main reason, do state a few other more significant reasons, ok. Oh yeah, multinationals also do not choose Malaysia over other cheaper cost countries simply because ringgit is stronger than those currencies. If it’s due to ringgit, then manufacturers should all move to those countries instead because in this case, cost of operations in Malaysia is higher. Happy deciding dear multinationals and feel free to write to me for more reasons to invest in Malaysia yeah. Cheers.
written on 7 June 2017
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