Abdullah should either personally or direct Effendi to present Ministerial statement in Parliament on Monday making public all the methodology and data on EPU computation of ethnic equity ownership as guide to avoid uninformed and irrational debate in next week’s  Umno and Umno Youth General Assemblies to play  the race card

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Media Statement
by Lim Kit Siang  
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(Parliament, Friday) :  The Prime Minister, Datuk Seri Abdullah Ahmad Badawi should either personally or direct the Minister responsible Senator Datuk Seri Effendi Norwawi to present a Ministerial statement in Parliament on Monday making public all the methodology and data on Economic Planning Unit (EPU)computation of ethnic equity ownership as guide to avoid uninformed and irrational debate in next week’s Umno and Umno Youth General Assemblies to play the race card.

The Ministerial statement should make public all the studies and reports commissioned by EPU on equity ownership and distribution, both on ethnic breakdowns as well as on their distribution.  EPU can post all these reports and studies on a special website so as to make them easily accessible to interested Malaysians in line with the new openness, transparency  and first-world mentality pledged by Abdullah.

On Tuesday, Deputy Finance Minister, Datuk Dr. Awang Adek told Parliament during question time that bumiputeras own 36.6% of equity ownership at Bursa Saham valued at RM78.4 billion as at Dec 31 last year, as compared to 46.9 per cent or RM100.4 billion for non- bumiputeras and 16.45% or RM35.2 billion for foreigners.

The Ministerial statement should include the report showing the computation on the 36.6 per cent bumiputera equity ownership at the end of last year so that other researchers can duplicate the calculation, and also  throw light as to when the 30% target for the listed companies on Bursa Malaysia was achieved. 

The Ministerial statement  should also compute the bumiputera equity stake based on market value as at the end of last year, as the 36.6% figure given by Awang Adek is based on par value, while  a very much higher percentage for bumiputera equity ownership would have been recorded  if market value is the basis of calculation.

Government leaders had been over-hasty and wrong in rejecting two recent studies on equity ownership, viz:

• the Asian Strategy and Leadership Institute (Asli) report by Prof. Dr. Lim Teck Ghee putting bumiputera equity ownership at about 45 per cent; and
• the University of Malaya research study entitled “Bumiputeras in the Corporate Sector – Three decades of performance 1970-2000”, by Dr. M. Fazilah Abdul Samad that the 30 percent bumiputera equity ownership as targeted under the government’s New Economic Policy had already been achieved about a decade ago when it hit 33.7 percent in 1997.

Awang Adek had told reporters on Tuesday: “You should avoid judging which methodology is the correct one. You should just say different bases of methodology produce different results.”

The Deputy Finance Minister is right and Umno leaders should have been guided by this injunction when they commented and passed judgment on the Asli report.

For this reason, the Minister for Agriculture and Agro-based Industries Tan Sri Muhyiddin Yassin, who is also Umno Vice President, should apologise to Asli and Prof. Dr. Lim Teck Ghee for dismissing the Asli report “Corporate Equity Distribution: Past Trends and Future Policy” as “rubbish” when their differences is one of methodology.

Both the Asli report and the Fazilah study  should be made available to every Umno delegate next week so that their  findings and recommendations could be properly understood and debated rationally, particularly the following conclusion in the Asli report, viz:

“The  continuous divestment by Bumiputera shareholders (partly as a means of asset diversification) has been mainly responsible for the so-called ‘under-achievement: by Bumiputeras  in relation to the NEP Corporate Equity targets. Even if this divestment is not taken into account, Bumiputera share of corporate equity presently is well in excess of the target of 30 per cent, if more objective methodologies of measurement are used.”

Is there any reason why responsible Umno and Umno delegates should object to Prof. Dr. Lim’s recommendations in the Asli report such as:

·      Enterprises owned by the GLCs must be managed by competent professionals with expertise in the business of the company under their charge. Senior management positions cannot be determined on the basis of ethnic background.

·      The government should cease allocating equity to individual Bumiputra during IPOs, unless a mechanism can be introduced to ensure that the beneficiaries play a prominent role in the management of these companies. The allocation of shares to Bumiputras before IPOs tend to promote Ali-Baba relationships that only serve to undermine investor confidence and foster ill-will.

·      Bumiputra trust agencies, such as the ASN and ASB, should be the primary beneficiaries of IPOs allocated to this community. At the same time, there should be equal determination by the Government to increase the share participation of the Indian and East Malaysian Bumiputra communities through similar community-based trust agencies.

·      Affirmative action and the promotion of Malay-owned businesses have created serious intra-ethnic Malay cleavages while also hindering the creation of a competitive economic environment. The government should not continue with the continued promotion of such policies.

·      Government policies to enhance Malay Bumiputra and other ethnic minority participation in commerce and industry are better achieved through capacity building efforts such as investment in human resource development and skills training rather than through forced equity restructuring.

(10/11/2006)