WHEN Prime Minister Datuk Seri Ismail Sabri Yaakob asked all Malaysians to sort out problems as “Keluarga Malaysia”, a term he repeatedly used in his inaugural address as prime minister on August 22, did he really mean it? Or is he just another prime minister using just another platitude to cut it with Malaysians?
Some events ranging from unreasonable Bumiputera equity requirements for freight forwarders, Bumiputera shares that can’t be sold to others, and a RM30 million renovation to his official residence clearly do not jive with this idea of being one big family, certainly not a happy one.
He puts considerable lip service to the concept of “Keluarga Malaysia” – he even used the term at the recent United Nations General Assembly, saying he sees humankind is one big extended family and that we have to work together in the spirit of a world family. But practice indicates that the concept of family is not always on his mind, making nonsense of the notion that we are family.
With respect to the equity requirement conditions, it arises out of a false assertion that Bumiputera equity participation in the corporate sector is just 17.2%, as disclosed in the latest 12th Malaysia Plan (12MP) document.
The flaw is that this is based on equity investment at par value or the nominal value of the issued capital and not the market value for listed companies or shareholders’ funds for unlisted vehicles, figures that are easily available and that are far better measures for measuring value.
Why has the government continued to delay this adjustment for so many years, which would show a truer picture of the situation? Obviously, this is to show that Bumiputera participation in the corporate sector has still not been fulfilled at 30% of corporate value under the original New Economic Policy.
If the measurement criteria are changed as suggested, then it is very possible that the target of 30% ownership of the economy has been already met, thus obviating the need for this policy.
But even this redistribution of wealth, under the NEP, is supposed to come through growth of the economy rather than redistributing existing wealth.
This skewed method of wealth redistribution, which often meant the sale of equity stakes to favoured Bumiputera investors, helped rich and wealthy Bumiputeras who could afford to buy the stakes become even richer. Many subsequently resold the stakes for instant profits and did not play a meaningful role in management.
Strangely, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz explained on Tuesday that the Bumiputera equity participation requirement (of 51% in the logistics business) was agreed on in 2015 by the Bumiputera Economic Council (BEC) chaired by then prime minister Datuk Seri Najib Razak.
The decision was made in line with the findings of a Teraju study, the finance minister added. Note that 51% equity requirement for this sector exceeds the 30% target for broad equity participation and, in effect, means that no non-Bumiputera company can hold a majority stake in a logistics company.
That is truly oppressive. Strangely, there is no Bumiputera equity requirement for foreign players.
The 51% Bumiputera equity requirement among freight forwarders, a bone of contention amongst industry participants, has now been extended to December 31, 2022, after two earlier extensions, Tengku Zafrul added.
Can you believe it? This equity requirement was agreed on by the BEC with no input from non-Bumiputeras. Should this not be a cabinet decision? On what policy was such a decision made and how is it going to be implemented? What happens if a Bumiputera partner can’t be found?
Will we then revert to the old “Ali Baba” system when non-Bumiputeras will effectively own their stakes through parallel agreements by using Bumiputeras to hold their stakes while they effectively keep beneficial ownership?
What would such arrangements to restructure equity do for poor Bumiputeras? Nothing!
It’s clear. Ismail Sabri is ensuring that the rich Bumiputeras are being helped – the Umnoputras who hold key positions within Umno, while neglecting their poorer brothers and sisters and effectively stealing from non-Bumiputeras to restructure ownership.
What kind of family is that and how long before it is torn apart by internal strife and division brought about by huge income and wealth gaps, which will continue to increase, as will the animosity between races because of the time-tested way of Malay politicians who routinely blame non-Malays for the problems of Malays and not themselves?
Some family, prime minister, that you have envisioned and envisaged for all of us! Just a continuation under a new name of the same old economic rewards in return for political support and favours, which we have seen arise and thrive after 1981, when all manner of checks and balances were thrown to the dogs.
And now, PM, you announce in the 12MP that Bumiputeras will have to sell their shares to other Bumiputeras only. Have you thought this one through? What will happen if there is a two-tier market where demands and prices differ?
A price differential will build for the same assets, a differential that will cause major strains and lead to an inefficient market process. Malay shares are likely to sell for considerably less than the other shares, affecting the very people you are trying to help.
And then, you have the gall to reveal in Parliament a more than RM30 million renovation of your existing official residence to – to use your own words – “for safety and to uphold the nation’s image to foreign VIPs”. Why, you could build a new mansion for that amount of money.
That’s a rather ridiculous assertion – it’s not as if Seri Perdana has not been maintained all these years. If regular maintenance has been done, there is no need to do any renovation. Besides, recent prime ministers have had alternative residences of their own in addition to the official residence. Why spend more money here?
If the government can build a low-cost flat and sell it for RM20,000 a unit, you could build 1,500 units for the cost of that renovation and house probably four to five times that number of people.
Prime minister, there is only one way to build a family – give them the best quality of life that you can with the limited resources you have – so don’t spend more than RM30 million on renovations for your house and do too little for their accommodation needs.
Give them – all of them – the best education you can so that they are well equipped to work productively in an increasingly tough work environment and improve productivity so that all of us can enjoy higher incomes and standards of living.
Ensure that everyone gets a decent wage and stop favouring the owners of capital who are currently, on average, paying too little for wages, exacerbating the increasing gap between the rich and the poor.
Ensure economic and social policies encourage innovation, entrepreneurship and enterprise while, at the same time, ensuring that they are well supported by a well-trained workforce that gets decent wages.
Help the poor and needy of all races without favour and, if the Bumiputeras are indeed poorer than the others, they will automatically be helped more than the others. It will also help to restore badly needed racial harmony.
And please, crush the corruption, especially among those who pull the levers of power, because it’s corruption among you and your colleagues that causes the most amount of damage to the country and leads to resorting to extremism to get political support.
If you can do all of this, then you can truly say you are building up a Malaysian family. If you can’t, drop the term “Keluarga Malaysia” and be eventually replaced by someone who can. – The Vibes, September 30, 2021
P. Gunasegaram, like you, longs for honest, decent and capable Malaysian politicians. He is chief executive of research and advocacy organisation Sekhar Institute and senior editorial consultant of PETRA News