IT’S a terrific start. The decision to remove the 30% bumiputra equity quota in 27 services sub-sectors is certainly a sweeping move as it will now make Malaysia more competitive.
With foreign investments predicted to drop by over 50% this year, the decision to open up the health, tourism, transport, business, computer industry and social services would help to convince investors to take another look at Malaysia.
There is more good news coming this way. This week, the Prime Minister is expected to announce major news involving the financial sector.
The reality is that many investors have bypassed Malaysia because of the 30% bumiputra quota requirement.
There are plenty of other countries which offer better and more competitive perks to win over the hearts of investors.
Singapore, for example, is known to even offer scholarships or university places for children of investors, especially from China.
There would not be a major impact from the decision. Datuk Seri Najib Tun Razak is not waving a magic wand. But the optimism stemming from the decision is tremendous. It has brought freshness, encouragement and hope to the business community at a time when there is so much bad news.
We can expect Najib’s announcement to get favourable reaction from analysts and fund managers across the region.
These positive responses are essential if we are to make Malaysia heard and seen, but not through its series of explosive political news.
Malaysia offers good infrastructure, an educated workforce that speaks reasonably good English and a lower cost but higher standard of living, which are major considerations for investors.
While these sectors are not top heavy areas, it must be acknowledged that the services sector contributed 55% to the gross domestic product last year. Of this, 47.6% was contributed by non-government services. The services sector also accounted for 57% of total employment in the country.
From a political perspective, Najib’s decision is certain to win the confidence of the Chinese business community.
The sometimes over-zealous implementation of the affirmative action programmes has long been a sore point to many Malaysians, including bumiputras.
While the Chinese and Indians complained that the implementation by civil servants has been abused, the ordinary bumiputras grumbled that the politically-linked were the ones who profited, and not them.
The result is a large group of alienated and frustrated electorate who punished the Government in the March 8 polls.
Najib also needs to review the procurement policies of the government and government-linked companies.
It is well-known that inactive bumiputra partners, known as “sleeping partners”, are sometimes used to meet the 30% bumiputra equity rules. And it is said that in many cases, even a company comprising 100% bumiputra equity are created by non-bumiputra businessmen to overcome the stringent rules – and all these bumiputra directors do is just to collect some fees.
These practices go against the tenets of the New Economic Policy as they do nothing to restructure society. They also reflect the frustrations of good and decent Malaysian businessmen, many of whom are small businessmen who merely want to carry out a simple transaction with these GLCs.
No one knows who decided on this 100% bumiputra requirement to the point that some Malay businessmen are reluctant to have a non-Malay partner for fear it would affect their chances of securing a government contract. Sometimes, a foreign partner is said to be in a better position than Malaysians.
The affirmative actions are meant to elevate the position of bumiputras, and rightly so too, but they should not deprive non-Malays. Certainly, not to marginalise them.
A fair deal for all Malaysians is essentially what the new Prime Minister needs to look at and he has said so, citing the award of scholarships to students. Need-based, rather than ethnic-based, has to be the goal of the New Deal. It is the same with the recruitment of staff in the civil service, which is now mainly a one-race entity.
A vicious cycle has been created where the Government is serious about wanting to change the imbalances but non-Malays feel they have little chances of reaching the top positions in the civil service. So, they would rather opt for the private sector, but it does the country no good.
Obviously, the leadership needs to be brave enough to overcome this ethnic mental block. The racial prism has to be dismantled with good and clever Malaysians given the opportunity to serve.
Malaysia has to open up because the walls of protectionism have to come down. This is part of the globalisation process and even if the momentum has been slowed down because of the financial crisis, the opening up is inevitable.
Our competitors now are not Ahmad, Ah Chong or Muthu but the foreigners with their huge funds and strong expertise.
The kedai runcit and kedai kopi have been overwhelmed by the presence of hypermarkets and franchised coffee outlets.
The lifting of the 30% bumiputra equity ruling in the 27 sub-sectors should be the first of many changes to come.
Najib must be commended for his series of bold moves. A day after scrapping the quota equity, the Cabinet decided that the children of parents who were divorced and where one parent converts to another religion have to be brought up in the “common religion at the time of marriage”.
The move would certainly not endear him to Muslim conservatives but as the Minister in the Prime Minister’s Department Datuk Seri Nazri Abdul Aziz said, religion should not be used as a tool to escape marriage responsibilities and that conversion “is not grounds for automatic dissolution of marriage”.
Najib must be encouraged. He has wasted no time in carrying out these radical changes, and for him to succeed further, Malaysians must support him.