Something is not right here ....

I picked up this story in Catcha.com and, after reading it, was perplexed as to why would a Swiss company making Swatch watch components decide to close its factory in Ipoh, Malaysia and move to Thailand. Is Thailand any better than Malaysia when it comes to providing cheap labour, or is the business environment there more conducive to manufacturing watch components than here. I certainly hope that the factory does not have political or land problems with the authorities. After all, watch making factories are not like industries involved in the extraction of raw materials like the mining and quarry industries which are always at the receiving end of environmental regulations, and market uncertainties and harassments by the local authorities, not to mention, the public's prejudice in regarding them as dirty and noisy industries.

Malaysian watch component plant to shut, 500 jobs lost: Swatch

GRANGES, Switzerland, May 13 (AFP) - Switzerland's Swatch watchmaking group said Friday it would move production of watch components out of Malaysia to Thailand, with the loss of 500 jobs.

Production at the ETA plant in Ipoh is currently running at reduced level and will cease at the end of the year, the group said in a statement.Layoffs will begin immediately. Staff will be given a redundancy package and help will be available to find new jobs, Swatch added. Swatch group blamed the move on falling prices for the "lowest cost" finished watch movements produced for the Asian market in Zhukai, China. The Chinese factory is supplied by the Malaysian plant.

Production of components is being transferred to the ETA plant in Bangkok.

The Malaysian authorities should investigate why Swatch decide to close its factory. Malaysia has already had a hard time in getting new FDI from foreigners only to lose those that are already here to another neighbouring country. Its not only that 500 jobs are lost, but that Malaysia stands to lose the skill that goes with the watch-making industry.

Bank Negara Malaysia's IFR

BNM has still got a long way to to reach USD 100 billion in IFR. It was reported that the international reserves of Bank Negara Malaysia increased to RM280.2 billion (USD73.7 billion) as at 30 April 2005. The increase of RM3.5 billion (USD0.9 billion) during the second half of April was due mainly to sustained repatriation of export earnings, inflows of foreign direct investment and portfolio investment. Outflows were due mainly to payments for imports of goods and services and repatriation of dividends. The reserves level is adequate to finance 8.7 months of retained imports and is 6.8 times the short-term external debt.