Kuala Lumpur, 21 July 2016 – IDEAS Senior Fellow Professor Dr. Edmund Terence Gomez of University of Malaya today presented a talk in conjunction with UM’s Faculty of Economics and Administration’s 50th Anniversary entitled “Who Owns Corporate Malaysia Now? Ownership and Control of Government-Linked Investment Companies” The study discussed during the event is the first of its kind on Malaysian Government-Linked Investment Companies (GLICs) and was funded by a grant from the Institute for Democracy and Economic Affairs (IDEAS).

The study takes a look at Malaysia’s seven GLICs, namely the Minister of Finance Incorporated (MOF Inc), Permodalan Nasional Berhad (PNB), Khazanah Nasional Berhad (KNB), the Employees Provident Fund (EPF), Lembaga Tabung Angkatan Tentera (LTAT), Lembaga Tabung Haji (LTH) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) in the context of their ownership, control of the economy and their positions in the Top 100 Malaysian companies.

“Control Enhancing Mechanisms are used by the government of the day to direct GLICs to drive socio-economy development in the direction of current government policies. The GLICs have been performing relatively well in recent years. Despite a spate of scandals, we have seen improved results which demonstrate the GLICs’ robustness,” said Prof. Dr. Terence Gomez, who is also a professor of economics at the University of Malaya.

“There is definite room for improvement, particularly since GLICs’ also play a role as trustees of the country’s wealth. Therefore, they must remain autonomous and be apolitical with clear separation between the regulatory and ownership functions of the government. This way we can avoid the problem of a government which both regulates and owns GLICs.”

Commenting on the study, Wan Saiful Wan Jan, IDEAS Chief Executive Officer stated “This study answers how GLICs own and control the Malaysian economy and what has changed over the years since independence.  We can see that there is increasing dominance of the state over corporate Malaysia.”

“If we look at it over time, there has been a shift since independence from foreign ownership to government ownership and then to private ownership under the Bumiputera agenda and then back to government ownership again as a fallout of the Asian Financial Crisis in 1997. Today, much of corporate Malaysia is owned by the GLICs and the GLCs in all key sectors which are property, trading and services including financial services, construction and plantations.”

“In the context of the government’s promise to reduce government’s role in business, I have real questions if the government even want to keep their words.  I do not see a significant reduction yet and I am worried that the government may be crowding out true private sector, preventing the private sector from becoming the engine of our growth,” said Wan Saiful.

“We commissioned Professor Gomez to look into this topic because it is important to know how our state-owned enterprises are governed.  We have seen a spectacularly disastrous situation with a well-known government company, 1MDB.  We want to check the governance of other government companies to ensure 1MDB is not repeated.  We want to continue our work on this topic and we are trying to raise money to pay for more research.”

The study will be published in a research paper which will be available on the IDEAS’ website (www.ideas.org.my) beginning November 2016.


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IDEAS is Malaysia’s first think-tank dedicated to promoting market-based solutions to public policy challenges. We are an independent not-for-profit organisation. As a cross-partisan think tank, we work across the political spectrum. Our purpose is to advance market-based principles, and we are not bound by party politics, race or religion. Our mission is to improve the level of understanding and acceptance of public policies based on the principles of rule of law, limited government, free markets and free individuals. For more information, please visit http://ideas.org.my/

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