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Screening MM2H applicants necessary but new rules may drive away potential participants – analysts

KUALA LUMPUR (Oct 8): Malaysia’s cultural diversity is said to be the main reason many foreigners have chosen to reside in this country under its Malaysia My Second Home (MM2H) programme since it was introduced 19 years ago. 

The official website of the Ministry of Tourism, Arts and Culture (MOTAC) – which coordinates the programme ­– cited the weather and medical services, as well as investment impact, as the factors prompting them to choose Malaysia as their second home.     

However, the Auditor-General's Report 2019 Series 2, which was tabled at the Dewan Rakyat on Sept 28, revealed several weaknesses in the programme that posed a risk to national security. Among them was the absence of a letter of good conduct (LOGC) requirement to verify that the dependants of the MM2H programme participants are free from criminal misconduct.

The report also described the management of the MM2H programme as inefficient and ineffective due to the absence of an integrated database and weaknesses in the internal controls of the Malaysian Immigration System (MyIMMs) which, it said, made it difficult for MOTAC and the Malaysian Immigration Department to effectively monitor and evaluate the achievement of the programme.

Meanwhile, the Ministry of Home Affairs (MOHA) recently introduced 10 new criteria to tighten the MM2H programme to ensure that only those who are genuine, of high quality and can contribute positively to the nation’s economic growth are allowed to participate in the programme.

Home Minister Datuk Seri Hamzah Zainudin told the Dewan Rakyat last month that the stricter new criteria were for security purposes as “some of them are disguising as MM2H participants but are actually using it as a ‘transit’ to carry out unwanted activities”.

The MM2H programme was reactivated this month after a hiatus of about a year due to the COVID-19 pandemic.

NEW CONDITIONS SPARK DEBATE

Among the conditions stipulated by MOHA for new MM2H applicants are they must stay in the country for a minimum of 90 days each year and draw a minimum offshore income of RM40,000 a month, compared to RM10,000 previously. 

They must also have savings of at least RM1 million (from RM150,000 previously), up to 50 percent of which can be withdrawn for the purpose of buying a property or for health or their children’s education.   

The new conditions, however, have elicited mixed reactions from analysts and MM2H service providers.

Crisis management analyst Nordin Abdullah said the more stringent rules may drive away potential MM2H participants to other countries in this region that also offer similar programmes.

He said programmes that help to stimulate the economy should be recognised as investors that can contribute to the nation’s economy.

“This (MM2H programme) is a retirement business. They (expatriates) look at countries that are more sustainable to live in.

“In essence, yes, they (participants) do not pump in billions of dollars in a factory or retail chain, but the reality is that they are investors,” he said recently on Bernama TV’s The Brief programme.

Andy Davison, who is the chief executive officer and founder of TEG Media – which is involved in publishing and also provides MM2H visa services – also expressed his concern over the new conditions, saying that the expatriate community and individuals who were initially interested in the MM2H programme now have a negative perception of Malaysia.  

 “This would have negative repercussions for the business people looking to invest here (in Malaysia).

“They are also saying that maybe Malaysia isn’t as welcoming as they thought. So they are also starting to think twice about investing here. This has been extremely damaging for Malaysia,” he said.

WEAKNESSES

Crime analyst Shahul Hamid Abdul Rahim, meanwhile, welcomed the new criteria governing applications under the MM2H programme, saying it would check the occurrence of criminal cases linked to foreigners staying in Malaysia.

He said there were significant weaknesses in the previous criteria as it did not require the authorities to screen the applicants and their dependents who wished to participate in the programme.

The situation made it difficult for the government to ascertain whether or not the applicants and their dependents had criminal records and could be a threat to the nation’s security.

“Basically, the (MM2H) programme offers priority to senior foreign citizens who wish to stay and rest in our country and initially, it was only offered to participants from certain countries like Japan.

“But several years later, participants from many more countries were allowed to join the programme and many of the participants and their dependents were aged below 50,” he told Bernama.

This situation, he said, can lead to the misuse of the long-term passes issued to them, as well as open up opportunities for them to be involved in certain criminal activities.

Shahul Hamid said the tighter criteria for new applicants will ensure that they are screened properly and are genuine about their intention to stay in Malaysia.   

“We can expect good behaviour from the older generations but about the younger ones? They are the ones who misuse (the programme) to the extent of being involved in criminal cases.

“We don’t want them to apply for the MM2H programme just to get a long-term pass to stay in Malaysia because we don’t know who they really are. We’ve received information that some of them are involved in all kinds of crime, including scamming people,” he added.

STIMULATE ECONOMY

Since the introduction of the MM2H programme in 2002, a total of 57,478 foreigners have been issued long-term passes to reside in this country.

According to MOHA statistics, the programme generated cumulative revenue of RM11.89 billion between 2002 and 2019 via visa fees, property and vehicle purchases, fixed deposits and monthly household expenditure.

Senior lecturer at Universiti Utara Malaysia’s Centre for Economic, Financial and Banking Studies Dr Nur Hafizah Mohammad Ismail, meanwhile, said the reactivation of the MM2H programme will indirectly stimulate economic activities that were paralysed following the enforcement of movement restrictions.

“This (restarting the MM2H programme) is the right step to take, more so now as our country shifts into the COVID-19 endemic phase.

“This strategy will support the National Recovery Plan and stimulate investment in the real estate sector,” she said.

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