KUALA LUMPUR, Malaysia—Malaysia's government promised Monday not to deter foreign investments in the five states it lost to an opposition alliance in recent elections.
Opposition lawmakers have feared that after March's landmark polls the National Front ruling coalition might divert investments away from the five states, which include the northern manufacturing hub of Penang and wealthy central Selangor state near Kuala Lumpur.
International Trade Minister Muhyiddin Yassin told Parliament on Monday that the government will "encourage foreign investments to all states," adding that federally approved investment incentives won't be withdrawn from opposition-led states.
Penang is one of Malaysia's biggest draws for foreign investment. Major U.S. electronics firms such as Dell Inc., Intel Corp., Motorola Inc. and Seagate Technology Holdings have invested in its manufacturing sector.
Muhyiddin urged the People's Alliance, which comprises three opposition parties, to maintain a business friendly environment but not to introduce "policies that might clash with laws that exist on the federal level."
The minister did not elaborate, but his statement was considered a reference to the opposition's threat to roll back affirmative action programs that give privileges to the ethnic Malay majority in business contracts, jobs and education.
Critics say the policy breeds cronyism, corruption and inefficiency because it mainly benefits a well-connected Malay elite. The opposition hopes to open the process for awarding state contracts to everyone, rather than just to companies owned by ethnic Malays.
Opposition leaders say the plan will boost transparency, but some Malay ruling party members have staged protests, claiming it would deprive poor Malays of chances for economic progress.
Many minority Chinese and Indians have felt marginalized by the affirmative action program, which was started in 1971. The election results -- in which the government lost its two-thirds parliamentary majority -- partly reflected anger among minorities against social inequalities.
