Thursday, October 30, 2008

30% Bumiputera Rule Misguided

PAS Youth's recent outburst against the abolition of 30% bumiputera requirement for public listed companies is misguided despite being well-intentioned.
PAS Youth chief Salahuddin Ayub said that the 30-percent equity must be retained and defended "even if the target has been reached". According to him, "before 1969, the equity of the Malays was almost nil and after 40 years, it is only at 19 percent. If this continues, we need about 20 more years to achieve the 30 percent target."
Firstly, as stated, bumiputeras have failed to achieve the target fo 30% equity despite nearly 40 years of NEP only proves that achieving equity through regulation will not achieve the objective increasing the wealth of bumiputeras in the shortest possible time. In fact, the 19% wealth ownership target, if accurate, has remained stagnant since the 1990s.

Secondly, for bumiputeras to achieve not only 30% of the nation's wealth, but also a meaningful 30%, it is critical for the capital markets to be liberalised to attract global capital and its corresponding talent and economic effects.

Our goals of becoming the regional financial centre since the 1980s lie in tatters as we lose out to many other financial centres in the region. The Kuala Lumpur Stock Exchange as late as 1993 was the 2nd largest stock exchange in Asia-Oceania region ex-Japan, but today we have fallen out of the top 10, losing to financial markets in Singapore, India, China, Taiwan, South Korea, Australia and New Zealand.

As a result, not only are foreign companies not interested in the Malaysian stock exchange, Malaysian companies are similarly heading offshore to more attractive financial markets. Ultimately, the losers are Malaysians themselves.

Hence, taking progressive and deliberate steps towards liberalising the financial markets will allow for a more dynamic economy accompanied by greater wealth creation. It will ultimately benefit the bumiputeras as they form the majority of the population. A more liberal market will also catalyse a more productive workforce who will in turn be able to compete on an equal footing in a globalised economy.

Similarly, PAS is misguided in its response to the appointment of Low Siew Moi as the acting General Manager of Selangor State Development Corporation (PKNS) as the Selangor Menteri Besar has stated clearly that she is the most qualified person to fulfil the role at this point of time. By that, it means that she will be able to manage PKNS is the most effective and efficient possible manner, which will ultimate benefit the coffers of the state.

Given the people-centric nature of the policies of Pakatan Rakyat government, the poorest in the state, most of whom are bumiputeras will benefit most from such gains.

The race of the general manager should not be in question at all. It is disappointing that objections have come purely from a racial, and not from a qualitative perspective. PAS in these instances, should not miss the woods for the trees.

22 comments:

bennyloh said...

NEW KID!

Anonymous said...

Don't know la, I am already confused.
As far as I know, best man for the job.
Our country cannot go far la. Malay like me will remain where I am and will tell my sons don't come back to Malaysia.
Whither Malaysia.

artic turban said...

YB TONY, as I have stated earlier, in another blog, ME AND THE BIG GROUP OF FRIENDS WHO got our family members to vote pakatan, are getting cheesed off with these malay only or bumi only antics, I ask this question, where are the promises pakatan made to the rakyat, that pakatan will lead and perform based on merit, with the statements by zul, and now these pas morons, these antics do not endear pakatan to us, and we have decided that come next election we will vote in bn, WHY? AT LEAST WITH BN WE KNOW WHAT TO EXPECT, WE WON'T GET DISSAPOINTED, AS PAKATAN HAS DISSAPPOINTED US, ESPECIALLY WITH THE RACIST REMARKS, WE FEEL LIKE WE HAVE BEEN TAKEN FOR A RIDE, AND WE ARE VERY ANGRY. We want to see at least some cases taken to court regarding all the corrupt practises, if the police do not want to take action, than take action under cbt or sue them for mismanagement, get them into court and shame them. that is one way to skin the cat. LIKE I SAY ALL TALK AND BULLSHITE WALKS, SO TO THE PAKATAN LEADERS, WHERE IS THE LEGAL ACTION, WHAT HAPPENED TO THE BALKIS FUNDS, ZAKARIA PALACE, WHAT ABOUT WHERE HIS FUNDING CAME FROM AND DID HE PAY TAXES TO THE IRB??? DON'T forget how they got al capone, through tax evasion. SO TO PAKATAN I SAY, WALK THE TALK OR END UP TAKING A WALK COME NEXT ELECTION. THIS IS FROM A STAUNCH PAKATAN SUPPORTER.

Hamzah said...

"...despite nearly 40 years of NEP only proves that achieving equity through regulation will not achieve the objective..."

well said Tony!

btw, the rakyat is still waiting for the Govt to show how MoF calculates the 19%??!!

to Ketuanan Rakyat.

Moo... said...

The 30% thingy has long ago being achieved if the 30% bumi shares were not sold to non bumi.

If bumi shares are being allowed to be sold to non bumi even in a 100 years, the bumi will not achieve the 30%. It is just simple logic.

One way around is to create the portion of bumi shares be traded in the KLSE.

In this way the bumi shares will always be in the hands on bumi. Food for thought......

ang war said...

The more pertinent question is where is Anwar Ibrahim on this matter, complete silence???

Victor Tan said...

30% equity is meaningless. I don't care if the chinese businessman are so rich they control 99% or if the malay businessman control 99% of the equity. the damn truth is none of this equity will help me pay my bills. its not going to help me get higher pay. its not going to help me cope with higher cost of living. its not going to help me have a better quality of life, or will it help ahmad and muthu and ah chong and james and whoever have a better quality of life. its totally meaningless. how does money in somebodys pocket whether it is malay, chinese or indian help the poor people cope????

in US, nobody cares about equity. all they care about is whether a company practices discrimination, whether the poor kid is given scholarship so that he can afford university, whether a poor mum gets the help she needs to take care of her kids, whether banking loans are given irrespective of race.

we have much to learn from countries that have overcome their racial divisions.

Victor Tan said...

to those who claims that this equity is needed to prevent a repeat of May 13, just pose a question to them.

why did may 13 occur? is it because of malays did not have any equity in the economy? if yes, how does setting a 30% equity and forcing non malay businessman to give/sell their equity to malays help? can the ordinary malay benefit? do you want ordinary malays to continue to have to beg/be gifted the economic pie?

its a road to nowhere. we can only overcome this problem by facing the problem directly. malays need to work harder, compete with other races and not expect any crutches. I am not the only one who says that. Mahathir did too. (with all due respect to malays, i am NOT saying that Malays are lazy.)

Anonymous said...

This country in my humble opinion is doomed. No country in the world can survive and thrive if its majority population lives on crutches and refuses to compete. Let me be more brutal the Malay race “akan hilang di dunia’ if this kind of mindset persists.

Simon H said...

I'd say front the best man for the job ALWAYS. The growth of the country is MOST important and cannot be sacrificed for ANY policy. The policy makers seem to be ignorant to the fact that the country would be in a better position to help the bumiputras if the country is left to be governed by the best people for the job, whether in politics or the commercial world.
I sincerely hope that our fellow bumiputra countrymen would be able to see through the weaknesses of NEP that is ONLY benefiting a selected few, and at every passing moment burden our beloved country further and further ...
There is a need to establish a common understanding within Pakatan that we are all in the same boat, sink or float, its up to our collective effort with trust and respect for one another, to push the nation forward. WE SHALL NOT LEAVE ANYONE BEHIND!

Sidenote: What ever happened to all the ceramahs? Its ashame that political parties only have lots of them when election is around the corner. I think all of Pakatan should have regular ceramahs to constantly educate the public about what is going on with the country at large and at the same time update all on every progress made by our elected representative.

Anonymous said...

Answering Moo's suggestion of having a Bumi sector in KLSE. For your info, a number of years back there was such a sector where shares were traded purely among the Bumis. The number of counters there was very little. Utusan M'sia was one of them. But most of the time, there was no trading at all and the share prices were dismal. At the end, the Mahathir Govt decided to just abolish it. General Bumi public who bought shares stood to regret. It is like insisting that only Bumis can wear Batik and no other race allowed to buy Batik clothings. The Batik producers stand to lose more.

Try the same trick on Bumi (or well connected UMNO politicians') property developers and insist that the properties must be sold to Bumis only. They will miss out more opportunities of having more decent returns for their projects.

CalvinNgan said...

tony, DAP should insist on how do they come about the 19% figure, we need to know the methodology.

I think it is time DAP highlight what should be dropped from the NEP. UMNO is playing the game well, putting fear in the Malays. For instant....

To drop:
Business requires 30% bumi - state reason.

To maintain
Malay Language
UiTM for Bumi only


make it black and white... i guess removing the NEP is impossible, amends is possible... slowly but surely.

not equal policy said...

Ask the Malays nationalist if they really want 30% equity holding or not. Believe me this is not easy because you might want something but that something might just be a far dream if you are not prepare to lost everything.

The nationalist must ask if the Malays should start buying more shares and holding them, they have to give up many things so that more money can be used to buy shares. To Ali the taxi driver it will mean he need to stop smoking all together and spend more time on the road so that he will have more cash to buy shares. To Datuk Mohmd it will mean driving a Proton instead of a 4 wheel drive or his shining Marc, his wifes & daugther must stop visitiing the high end mall. Datuk must buy more shares and start collecting dividen to buy even more shares.

Is not easy, Dr M had a short cut that went wrong because he ended up giving handout to just a few "Super rich" Bumi but every other Bumi remains poor.

If you not ready to hold equity is better you don't because this is something that isn't that simple. You are talking of managing risk and if you are not prepare to take risk how will you be able to keep up to the percentage of equity of your wish?

The whole world is moving forward and getting richer but in Malaysia we have a group who still doesn't want to face reality and barking up the wrong tree.

KoSong Cafe said...

How can we achieve 30% if the shares allotted are being sold soon after? If there is no real interest in holding shares, they will sell for immediate gain, or even at a loss when they need money.

While we argue over the method of calculation, (still waiting for Najib's promise to reveal his since Dr. Lim Teck Ghee's controversy), we seem to overlook the perceived large scale siphoning of funds by corrupt politicians.

GLCs, controlled by Malays, are not to be included.

I believe this Never Ending Policy will continue and it seems a waste of everybody's time to argue over it. The subject will be hot whenever there is a race-based party election every few years. The public should be tired by now. I am.

Anonymous said...

Dear Brother Tony,

You are absolutely right. The way forward especially in light of the financial crisis is liberalisation - opening up, and not a fortress or siege mentality. This is "sound economics". This is why financial recapitalisation must also be accompanied by cuts in interest rates and corporate tax.

Jason Loh

Anonymous said...

How can Malays can achieve 30% equity when they keep selling their shares and liquidating their positions for short term gains?

Anonymous said...

The Malays will never achieve 30%. If 30% is achieved their rights will be gone. Therefore, it is obvious that the 30% equity must never be achieved.
The 30% must not be for the Malays ONLY, it must also benefit the Natives of Sabah and Sarawak. Are they being marginalise and neglected of their rights?

flan said...

YB,

My take on the PKNS and 30% equity issue.

Using 8th March as evidence of wholesale support of Pakatan Rakyat's policies IMO is just as misguided.

Nothing wrong with being idealistic, but wisdom comes with experience and insights, not intellectual meanderings. To overturn 50 odd years of 'institutionalised policies' of selecting top execs in bumi-based GLCs "overnight", you need to expect lots of resistance, and be careful when ascribing labels to other people.

PAS was being pragmatic when listening to the groundswell of resistance from PKNS staff (my sister works there, and regardless if you think it was orchestrated or not, the fear is genuine), and the plausible domino effects on other 'supported' GLCs, then it is worthwhile when you think of the big picture to take one step at a time, or even, one step back to take two steps forward.

This mentality must be drummed into DAP Youth clearly, even DAP, lest it would seem that they are the ones who seem misguided.

Anonymous said...

Dear YB Tony
It is indeed tragic that some of our Malay friends are so backward in their thinking that they continue to talk about their 30% share of the economy. The world today is a very much "flatten" and
the wise ones, the true & worthy citizens of the rest of the world, are all trying to compete, to excel & strive to help mankind to enlarge wealth. However some of our Malay countrymen are trying all kinds of tricks to grab their so-called racial share by unfair & foul means.
These poor souls did not know that the world has moved on & they did not even realise that it is they who have made their community the 21st century Rip Van Winkles of the world.
Perhaps they are blind as they are unable to see how much progress our Asian neighbours such as Japan, Korea, Taiwan, China, India etc have progressed with the right competitive mindset.
Very soon there won't be many coconut trees for them to lie under & to dream.

expletives deleted said...

artic turban,

you simpleton.

whats the matter with you?

rome was not built in a day you weepy girl.

you and "THE BIG GROUP OF FRIENDS " are all welcome to go back and vote for UMNO, MCA and MIC and the ISA.

you are a sad sad little man. PR doesnt need idoits like you on our side. you are like the soldiers that pee in their pants and surrender in a war.

you are a liability my friend.

ps Ton feel free to not publish my comment but with so called friends like this artic turban fool, who needs enemies? It has barely been a year and this idiot expects to see a sea change. God what is he? A ten year old? He probably blames Anwar for everything as well. Yeah like Badawi gave us the no confidence vote we demanded.

Anonymous said...

PAS Youth chief Salahuddin Ayub have not make his 30% yet. Now is the time for him. Why should he fight to abolish this rule.

His statement is a clarion call to say "my turn". Things don't change with some people.

Is this be the reason for some part PAS to work with UMNO?

Satish said...

Finally, a wise decision!

http://satishsran.blogspot.com/2009/05/30-bumi-equity-gonepartly-anywayhello.html