KUALA LUMPUR: Ethnic Malay interests remain front and centre in Prime Minister Anwar Ibrahim’s Malaysia Madani. An uptick in ethnic polarisation and a poor showing by parties from Anwar’s unity government in Malay-majority seats in 2023’s state elections leave the administration under pressure to shore up Malay support.
To that end, the Malaysian government will be wheeling out a Bumiputera economic congress in January 2024 (Bumiputera, meaning “sons of the soil” in Malay, is an official term for Malays and indigenous ethnic communities).
Decades after the inception of the New Economic Policy affirmative action program and its various reincarnations, Anwar has flagged the need to review the use of Malay corporate equity as the yardstick of Bumiputera empowerment and move towards a “participation rate and … control of the Bumiputera economy (that are) more meaningful”.
This is a step in the right direction. Malaysia’s muddled Bumiputera empowerment plans and metrics are in dire need of change.
Championing Malay corporate equity is historically synonymous with Bumiputera empowerment. But the approach fails to empower the Malay majority and sidelines vulnerable communities while enriching the politically connected.
UPROAR OVER BOUSTEAD PLANTATIONS SALE
Yet the recent uproar over the arranged sale of Boustead Plantations (BPlant) – a Bumiputera government-linked company (or GLC, denoting part or whole state ownership) – to the primarily Malaysian Chinese-owned multinational company Kuala Lumpur Kepong suggests two things.
First, securing buy-in for non-equity metrics will be an uphill battle because of political sensitivities. Second, significant issues, such as the principal-agent problem in Bumiputera empowerment agendas, remain unaddressed.
The government extended financial lifelines to the Armed Forces Fund Board (LTAT) in October. LTAT is a government-linked investment company (GLIC) legally mandated to provide retirement earnings to Malaysia’s military personnel through profits generated via the GLCs in which it – or LTAT’s holding company Boustead Holdings – holds stakes.
The roster of GLCs includes BPlant, Boustead Naval Shipyards and Pharmaniaga – all of which have added to LTAT’s financial woes by underperforming, due to mismanagement and corruption.
Successive CEOs have undertaken asset fire-sales and divestments to alleviate LTAT’s debts and improve cash flow, most recently through BPlant’s sale to Kuala Lumpur Kepong. But this acquisition was cancelled at the last minute. While LTAT did not clarify why, several factors suggest that racial optics deterred the acquisition.
Source: CNA
