Friday July 3, 2009

Leave Ali Baba to the thieves

WHY NOT?
BY WONG SAI WAN

The time has come for Malaysians to form genuine partnerships instead of having sleeping partners who offer no value.

ABOUT 15 years ago, my late Uncle Robert from Hong Kong came for a visit and was looking around to settling down in Malaysia, having lived in the then British colony since the 1940s.

Uncle Robert was a successful businessman and, like many Hong Kongers, was worried about the future as the date for the territory to be handed back to China drew near.

He thought it best to spend his remaining years here in Malaysia, the place of his birth.

This was in the 1990s when every Hong Kong resident was looking for a passport to Britain, Canada or Australia.

Uncle Robert, my mother’s eldest brother, was not without choice if he wanted to relocate, as he had sons who had settled down in Britain and in the US.

After looking around for a week, he decided that if he were to settle down here, he would like to do some sort of business as he was not quite ready to retire.

He decided that going into the food business would be the best as Malaysians love their food and were always willing to try something new.

I suggested that he bring in Hong Kong food to Malaysia as the Chinese here would love to have good quality cuisine from the territory. He shook his head.

The reason he gave surprised me. “Why do I want to just do business with only the Chinese here? I want the business of all Malaysians.

“The Chinese make up less than 30% of the population. I want the business of not only the Chinese, but the Malays and Indians, too.”

Uncle Robert, who was in the textile business, then when into a long lecture on the need to have a proper business model, and this included the need to ensure one gets as many customers as possible.

He identified Hong Kong desserts as the core business he wanted to get into, because there was no meat involved.

“There is no pork and no beef. The Malays can be customers as well as the Indians.”

However, Robert had one worry – the 30% bumiputra quota.

“Do I have to find a Malay partner to set up my business? Can’t I just have you as a partner?” he asked. I promised to find out.

It turned out that as a foreigner he needed Foreign Investment Committee (FIC) approval to set up a company here. That was in 1994.

In our correspondence later (yes, there was no e-mail then), Uncle Robert said if he were desperate enough, he would accept a Malay partner, as he was even planning to set up a factory to can the desserts.

“Just make sure you get me a good partner; someone who genuinely wants to invest and help out in the business. I don’t want a sleeping partner,” he wrote.

But, alas, before we could further our plans, cancer struck. He gave up of the idea of migrating here.

Uncle Robert would have been very happy to hear what Datuk Seri Najib Tun Razak had to say on Tuesday.

He would have been glad to know that he would not be forced to take on a Malay partner if he did not want to.

Uncle Robert would also have been happy to hear that Najib shared his opinion on sleeping partners.

The Prime Minister was quite candid in his take on the Ali Baba practice that became a favourite means to get round the NEP quota requirements.

“I don’t think you can get rid of sleeping partners overnight, but we can hope to reduce this practice as soon as possible,” was Najib’s reply when asked if the doing away with the FIC regulations on quotas was his way of fighting the Ali Baba practice.

For those who do not know, Ali Baba is the name given to the

practice of making use of a bumiputra sleeping partner just to

circumvent government regulations.

In the past decade, another new terminology, Baba Ali, has appea-red, referring to the practice in reverse – when a bumiputra businessman uses a Chinese businessman to circumvent certain government regulations.

In both cases, it is a bad form of partnership that gives no value to society as a whole.

Uncle Robert referred to the sleeping partner as someone

who was no better than a pimp depending on the earnings of his woman.

The Cantonese phrase he used was sek tho hai fan (eating out of a slipper) – one of the rudest ways to refer to a good for nothing.

As a foreigner, Uncle Robert saw the need to do business with all Malaysians so that he could leverage on all, and not limit himself to a certain community.

Najib, too, shared this opinion and in his liberalisation announcement recognised that the policies and targets set up under the NEP more than three decades ago were no longer relevant.

“The new economic model has been necessitated by two major factors. First, the economic environment regionally and globally has changed drastically since the inception of the NEP,” the Prime Minister stated.

“Second, the FIC as an instrument has not produced the desired results over the last 19 years. Bumiputra participation has remained stagnant over the last 19 years.

“We need to have a new instrument, but it has to be more market friendly. In the process, we are embarking on a new philosophy which will help the best and good bumiputras in business, not just any bumiputra.”

All Malaysians should identify with this new opportunity and take advantage of the new economic model to rebuild the country into a high-value one where everyone grows together.

I am sure Uncle Robert would have approved.

■ In April, Deputy Executive Editor Wong Sai Wan wrote about the need to do away with the FIC and is glad someone was listening.