First published in FMT News
By Joe Fernandez, (c) 2016, MToday News Sdn. Bhd. (c) 2016
PETALING JAYA: A new study by the Institute for Democracy and Economic Affairs (Ideas) found that not all promises in the National Transformation Programme (NTP) have been kept.
While the government claimed in the 2015 NTP Annual Report on Tuesday that it has achieved great success in transforming the economy, the think tank noted that the commitment to reduce the government’s role in business remains “unfulfilled and has in fact gone the opposite way.”
Ideas chief, Wan Saiful Wan Jan, in a statement, charged that government speech writers have been “very clever” in choosing words for the report.
“They only highlighted the fact that some GLCs have been divested.”
“They are hiding the bigger story, which is that the government has completely failed to reduce its overall role in business. The government’s grip has actually increased.”
He added that “the Malaysian Government has forgotten its promise to reduce its role in business. “
“Even Pemandu, the body supposed to push the divestment agenda, was no longer serious about it.”
Wan Saiful pointed out that Pemandu has set up a brand new GLC called the BFR Institute, and are entering the consulting market which was previously free from government interference.
“At the beginning, they even gained unfair advantage by using the Prime Minister’s Office as their official address and until today their office is within a government facility.”
“Rather than consistently pushing for a solution, Pemandu itself has become part of the problem in this respect.”
In a study titled, “Lesser Government in Business: An Unfulfilled Promise?”, Wan Saiful explains how the government’s grip on the economy has actually grown rather than been reduced.
“When it comes to reducing its role in business, the government’s track record appears mixed.”
“The government claims a 100 per cent achievement rate when it comes to divestment of companies under GLCs and GLICs.”
However, he lamented, that’s only stating half the story while conveniently hiding the fact that the government has been actively buying more equities than they have sold.
“Our calculations show that from 2011 to 2015, the government’s share in the KLCI increased from 43.7 per cent to 47.1 per cent, indicating that its control of the largest companies in Malaysia has increased.”
“It also signifies that the Malaysian Government has been accumulating shares of its investments in various companies from 2011 to 2015.”
On top of that, continued Wan Saiful, the government has also increased its investments in private companies as compared to its disposals. “Data indicates that the total GLC acquisition value of RM51.7 billion dwarfs the total disposals at RM29.5 billion.”
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