KUALA LUMPUR, Jan 30 (AFP) - Malaysia must cut corruption and excessive government intervention in business if it wants to win the regional contest for foreign investment, a US business leader said Tuesday.
Nicholas Zeffreys, head of the American Malaysian Chamber of Commerce, also said anti-Western rhetoric about economic "colonialists" is scaring away investors.

"Corruption (prevention) needs big improvement. There is a high level of corruption in the Malaysian economy," Zeffreys told a business conference.

"Malaysia Incorporated -- a model that needs to be looked at. There is too much government intervention in the Malaysian economy," he added.

Prime Minister Mahathir Mohamad touts "Malaysia Inc." as a model of cooperation between government and business. Mahathir frequently complains that unfettered globalisation is akin to colonialism.

Asked why government participation is bad, Zeffreys said less than five percent of the Malaysian economy was competitive.

"When you live and die at the whim of government intervention you will never going to become the global country that you need to be. Corporations here have too much government involvement and it is rampant," he said.

Malaysia "does not score high" in the area of predictability of government actions, he added.

He also cited difficulties in finding skilled workers like engineers and criticised anti-Western rhetoric.

"It is scaring off US investors," he said. "(Being) told they are colonialists is not helping.

"There need to be positive words and actions that Malaysia is a business-friendly country and that US and European companies are welcome."

Zeffreys said Malaysia had made "fantastic strides" and was capable of attracting and retaining investment. But what made it successful in the past would not make it successful in future.

He also warned that some US companies in Malaysia may cut working hours or pay amid the slowdown in the US economy.

Finance Ministry adviser Mustapa Mohamed told the conference earlier that corporate restructuring would take longer than expected but there will be no let-up in the exercise.

He acknowledged concerns that restructuring was too slow.

"Given the complexities of restructuring and because our pace of recovery in the corporate sector is incremental, restructuring of these corporations will involve more time," he said.

"Let me assure you that there will be no let-up in the momentum of corporate and financial restructuring as well as the initiatives made in enhancing corporate governance and investor protection..."

Mustapa told a press conference later the government has not yet decided whether to revise the official 7.0 percent forecast for gross domestic product growth this year.

The independent Malaysian Institute of Economic Research, in a report released Monday, lowered its 2001 forecast to 5.0 percent from 6.3.

It cited slowing private consumption and reduced demand for electronic exports.

Kiriman Awang Siber