Wednesday July 1, 2009
DPM: Bold steps needed for Malaysia to keep pace
PARIS: The Government’s capital market liberalisation measures are necessary to further accelerate the country’s economic development, said Deputy Prime Minister Tan Sri Muhyiddin Yassin.
He said Malaysia had to take bold steps towards reforms to avoid being left behind in the light of the global financial crisis.
“If this happens, the economic cake cannot be expanded and distributed equitably,” he said when commenting on Prime Minister Datuk Seri Najib Tun Razak’s announcement to dismantle the Foreign Investment Committee.
Muhyiddin said many quarters had viewed the FIC guidelines as an obstacle.
As such, he said, foreign investors did not see Malaysia as an attractive investment destination despite the conducive business environment.
He also said some viewed the guidelines as being able to protect the interest of bumiputras but this did not happen.
“For the last 16 years, bumiputra equity whether in nominal or market value did not increase but stopped at 16%,” he said, adding that the market value had actually dropped.
On the formation of Ekuiti Nasional Bhd (Ekutinas), he said it was to raise the level of bumiputra participation in the equity sector.
He said it was clear that previous measures had not been effective in promoting bumiputra investments.
For instance, nearly 60% of shares distributed to bumiputras were sold, resulting in their lack of added value, he added.
Muhyiddin said Ekutinas would be a better mechanism to ensure bumiputra participation in the equity sector.
“We want to develop a core group of committed bumiputra entrepreneurs,” he said, adding that the merit criteria would not affect bumiputras so long as they were capable and hard working.
In Petaling Jaya, former prime minister Tun Dr Mahathir Mohamad described the liberalisation measures as merely a move to become “popular”.
“I think it’s a kind of move more designed towards becoming popular. I don’t know if it will help the economy because Malaysia has been growing since becoming independent.
“Now that there is a lack of growth, this is due more to external reasons. It’s not about internal things,” he told reporters after launching the online news portal MalaysianMirror.com here yesterday.
Dr Mahathir also said Malaysia should be cautious of foreign investors keen on total ownership of fund management companies as they “owed no loyalty to the country”.
“They are here to make money. When they can’t make money, they go out and we pay the price for it,” he said.
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