Ex-BNM Governor ‘great friend’ of Labuan
Published on: Sunday, June 02, 2019
By: Sohan Das

Former Bank Negara Malaysia (BNM) governor Tan Sri Muhammad Ibrahim was a “great friend” of Labuan and many still miss him.

“MI”, as he preferred to be called, resigned from his high post last year after taking office in May 2016. During his official visits in Labuan, he always expressed concern over the island’s economic woes and recommended suggestions such as the need to enhance the island’s connectivity with more flights including a “bridge” link to mainland Sabah. 

He felt such connectivity would help elevate the position of the island status as an International Business and Financial Centre (IBFC).

In his speeches he also called for greater integration of industry players with the local society to provide meaningful economic spillovers as such a step would help close the gap in gross disparity in incomes.

MI’s fondness for Labuan developed when he was assigned as a senior official of Labuan Offshore Financial Services Authority (Lofsa) in the 70’s. While serving here, he established a wide circle of friends which included high net-worth individuals as well as those toiling at the basement, and understood well the local situation.

Many thought that when he left the post to return to headquarters and later elevated as Governor, Labuan would be forgotten by him. But it was not the case. He remembered all those he cultivated friendships with during his stint here.

MI’s interest in Labuan is reflected in more than a way. As soon as he was appointed governor in May 2016, he made his maiden visit to the island and looked up all those he knew.

He even called at the residence of this writer with a request to have all stories related to Labuan IBFC status published since 1990 be chronologically complied as he wanted the stories to be reference material at the institution’s library. In the early years of IBFC, most regular reportings of its activities were carried by Daily Express.

A senior official of the Labuan Chinese Chamber of Commerce, SK Tan said, “MI was keen to help local businessmen and help galvanise the economy. 

“He held discussions with the chambers and others to brief them on the financial facilities available at banks that could be utilised for diversification of business or to ride over the difficult time.”

In a nutshell, the chamber official said “all BNM governors were good but for Labuan, MI was outstanding due to his special interest on the island.”

What bothered him was that the income gains in Labuan were not evenly distributed across the local population, resulting in the top 20 per cent earning more than five times of the bottom 40 per cent household groups.

He wanted greater integration of IBFC players as a remedy to adjust the situation and pointed out opportunities where players could diversify and develop new niche products and tapping the full potential of the island’s status.

Among his suggestions were that being a port, Labuan should be considered a marine hub. 

He called on industry players to review their activities and seek ways for greater integration and not to be contented, noting that a stronger presence of IBFC would help spur the local economy.

Saying that there was room for Labuan IBFC players to achieve more, he pointed at the 2017 Global Finance Index which ranked Shanghai on 15th spot and Mauritius which was also a financial centre since 1990 the same time with Labuan on 73rd spot while Labuan was not even in the ranking.

He urged the players to make it their responsibility to help advice the welfare of the local society and lamented that some players kept a brass plaque office here with a skeletal staff and full-fudged operations elsewhere.

“This was not how the founders of Labuan IBFC envisioned it,” when Labuan was given the status, MI said this in one of his speeches here in October 2016.

MI resigned for the post due to differences over a land issue saying, “I am prepared to relinquish my post if the institution has no longer trust and support of the public.”    


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