FOREIGN investments will continue to flow into the country despite growing calls to boycott brands and companies linked to Israel as the calls did not come directly from Putrajaya, economists said. 

Putra Business School senior academic Ahmed Razman Abdul Latiff said the current call to boycott certain brands was of a temporary nature. 

He said the protest was emotion-driven and had an impact on local companies. 

“The boycott call comes from different aspects and has different effects. The boycott call started many years ago, for example McDonald’s. However, it is unsustainable, it is only temporary. 

“It is based on emotion, but it impacted local companies,” said Razman, who feels Malaysia would not face a backlash from investors due to its pro-Gaza stance. 

Last year, Putrajaya announced some RM123.3 billion in approved investments in the first half of the year. The total sum of actual investments for 2022, however, came in at RM74.6 billion, according to data from the Statistics Department. 

The United States, a close ally of Israel, contributed the most net inflows to Malaysia (RM37.8 billion), followed by Singapore (RM11.3 billion) and Japan (RM9.6 billion). 

American direct investment in Malaysia is led by manufacturing, wholesale trade, and non-bank holding companies. 

Razman said it would be better for Malaysians to boycott products or brands that are directly funding Israel. 

Using the Boycott Divestment and Sanction (BDS) report, Razman said Malaysians should look at brands such as Hewlett-Packard or Puma, which had direct business links to Israel. 

“There needs to be a targeted boycott. It can’t be based on hearsay. BDS has a list of companies and brands which invest in Israel. 

“Security company, G4S, provides security systems to Israel and has branches here. So why don’t local companies hiring G4S terminate their contract? 

“Puma is another brand. Hyundai Heavy Industry is also responsible for selling its equipment for the demolition of homes in the West Bank. So, these are some companies that we should be looking at,” he added. 

He said by targeting specific companies, Malaysia’s economy was not going to be affected. 

“First of all, the boycott call did not come from the government. 

“It was initiated by the people. Putrajaya never issued any call to boycott certain products despite us making it clear we stand with the Palestinians. 

“With a targeted boycott, our economy will not be affected because not everyone is involved. At the moment, our boycott seems to be misguided by targeting food and beverage, which is not long-lasting,” Razman said. 

Checks on the BDS website did not show Starbucks having business links with Tel Aviv. McDonald’s, on the other hand, is listed under the organic boycott target initiated by grassroot campaigns. 

It was said the boycott on McDonald’s was due to its franchises in Israel. It appears to openly support Israel and has provided generous in-kind donations to the Israeli military. 

Foreign divestment won’t occur 

Barjoyai Bardai of Unirazak shared the same opinion. He said even if a foreign investor wished to divest from Malaysia, the boycott call would not be the reason for doing so.  

“It was not started by the government. It is from the consumers who wanted to show solidarity. 

“It is not a long-term action. It’s a show of strength,” said the academic. 

Economist Azrul Azwar Ahmad Tajudin, who held the same view, said the US, as the largest capital investor last year, would not divest from Malaysia as most of its companies are involved in the electrical and electronic sectors. 

“The boycott here seems to focus on the food and beverage sector and not too much on other industries. Not many US companies are involved in the F&B field. 

“So, I see the impact on our economy as minimal. I don’t see US companies pulling out of or not injecting fresh capital in Malaysia in the near future,” said the chief corporate affairs and stakeholder engagement officer of Aafiyat Holdings Sdn Bhd. – November 17, 2023.