On Nov 4, Prime Minister Abdullah Ahmad Badawi unveiled the blueprint for the Iskandar Development Region (Iskandar). It is hoped that the 2,500 sq km zone would turn Johor into a world-class business hub to be on par with Hong Kong and Shenzhen in China.

However, for three days at the Umno general assembly last week, potential investors saw the worst manifestations of negative, divisive, destructive and piquant polemics, enough to make any potential investor to give Iskandar (and Malaysia) a miss. What was on display for potential investors was sabre-rattling talk, bone-chilling warnings and blood-curdling speeches targeted and directed against the minority Chinese.

Then there was the act of kissing the unsheathed keris (a recent phenomenon at Umno general assemblies). The Perlis delegate openly asked, 'Dato Hisham has unsheathed the keris, waved the keris, kissed his keris. We want to know when is he going to use it'.

Umno exco member Azimi Daim warned '... when tension rises, the blood of Malay warriors will run in our veins'. Malacca delegate Hasnoor Sidang proclaimed Umno's willingness 'to risk lives and bathe in blood'. Other speakers talked about running amok if their rights were questioned.

For Iskandar to succeed it will naturally require the participation and investment of foreigners, particularly the Chinese Singaporeans. However, after hearing all this incendiary language, would they still be attracted to invest in Iskandar? Would it be wrong for them to believe that there is something seriously wrong in Malaysia and that their investment may be safer elsewhere?

Umno delegates who were spewing venom forgot to realise that investors require not only a conducive business environment but also an environment which provides safeguards for their business, personal property and their lives. Chinese Singaporeans have not forgotten the destruction of Chinese businesses and bloodbath of the Chinese during the riots in Indonesia during the Asian financial crisis.

The speakers who warned about a bloodbath and running amok forgot to realise the threat posed by Vietnam. Vietnam is fast rising and is seen as an alternative to China. Would investors want to risk their investment in Malaysia when they can choose Vietnam, seen now not only as an attractive and viable alternative but more importantly a safer option for their investment.

Watching delegates applauding the inflammatory speeches against the minorities and the adversarial act of kissing a keris which received vociferous support would give any potential investor the impression that all is not well in Malaysia and that there are percolating undercurrents awaiting to implode.

Already Malaysia is suffering from a drop in foreign direct investment and if investors had any doubts about Malaysia, that three-day hate-fest may have convinced them to give Iskandar a miss. That is a real pity because in truth, Iskandar could succeed.

In the rush to score sectarian points, Umno delegates forgot that in a globalised economy, the last thing an investor needs is a climate of fear and danger. Iskandar, unfortunately, may have to pay the price for the piquant polemics.