STOP YOUR ‘OUTDATED’ IDEAS – MALAYS CAN STAND ON THEIR OWN FEET: BUT WILL ‘ONE-TRICK PONY’ MAHATHIR LISTEN TO ECONOMISTS – IS IT TO HIS POLITICAL ADVANTAGE?

MALAY and Bumiputera entrepreneurs can stand on their own and no longer need to be protected through a specific business development agenda, said a political economist.

The huge Malay middle-class has produced capable entrepreneurs who since the 2000s have started successful joint ventures with non-Malays, Prof Edmund Terence Gomez of Universiti Malaya told The Malaysian Insight.

An increasing number of these joint ventures, which are mostly financial services and technology firms, are also listed on Bursa Kuala Lumpur, he said.

Gomez’s suggestion comes as Pakatan Harapan starts its own Bumiputera Malay development agenda which appears similar to that of the former Barisan Nasional administration it replaced.

Numerous studies, including Gomez’s own, have shown how BN’s plans to nurture a successful Bumiputera business class failed because of corruption, collusion and political patronage.

In his best-selling 1997 book titled Malaysia’s Political Economy: Politics, Patronage, Profits, Gomez showed how business opportunities for Malays were often monopolised by personalities linked to powerful BN politicians.

Gomez is concerned  that a new Bumi business policy will be another vehicle for rewarding loyalists to the PH coalition and sideline capable non-Bumi entrepreneurs.

“If you introduce a new Bumi policy and tie it to this umbrella concept again, how (is the government) going to get it right?” Gomez told The Malaysian Insight.

“How are they going to ensure they don’t replicate its mistakes, are there remedial measures which have been tried and tested?  

“You cannot continue to bypass highly entrepreneurial entities, especially when we now need more domestic direct investment in the economy.

“If you keep bypassing them, then it is to our own peril as we cannot continue to work in that form.”

Outdated idea

A big problem with BN’s entrepreneurship policies was the persistent element of corruption and how this marginalised even competent Bumiputera businessmen in favour for those willing to pay kickbacks.

“I met a lot of Bumi entrepreneurs and SMEs who said they were left out because the disbursement of all these opportunities was not done in a transparent manner,” Gomez said.

“Competent Bumis were arguing that they were left out because, as they put it, there are kickbacks.”

These kickbacks were demanded by BN politicians in exchange for approving loans, contracts and licences meant for Bumiputera entrepreneurs.

Umno president Ahmad Zahid Hamidi is allegedly a beneficiary of kickbacks from a company awarded a contract to handle visas overseas. – The Malaysian Insight pic by Irwan Majid, September 26, 2019.
Umno president Ahmad Zahid Hamidi is allegedly a beneficiary of kickbacks from a company awarded a contract to handle visas overseas. – The Malaysian Insight pic by Irwan Majid, September 26, 2019.

“If you get, there has to be kickbacks and they’re not one off,” Gomez said, adding that the Bumi entrepreneurs he met claimed they refused to play the game.

“First of all you have to give kickbacks and second, you have to continue to give kickbacks if you do well.”

Evidence of these practices are seen in several court cases involving top-level Umno politicians, such as Umno president Ahmad Zahid Hamidi.

Zahid allegedly received bribes amounting to RM42.7 million as an inducement to extend the contract of a company that was handling Malaysia’s overseas visa system.

In contrast, PH stresses that its new Bumiputera economic agenda will be transparent when giving out opportunities and aid, and that it will emphasise competitiveness.

Even with these assurances, Gomez still does not think a specific Bumiputera entrepreneur agenda is necessary in this day and age.

“Malaysia has a thriving well educated Malay middle-class. They are highly educated professionals.

“I don’t see why they can’t compete, especially in the high-tech sector, which require different skills and which target people with high education.

“They understand markets better, they can create links with foreign firms and they know the sector well and can negotiate with foreign firms.”

His 2004 study on public-listed firms found that many were tie-ups between Bumis and non-Bumis, proving that the former could compete in the open market.

“The whole argument that Bumis need to be protected is outdated.”

– https://www.themalaysianinsight.com

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