(Parliament House, Tuesday): Former Prime Minister Tun Dr Mahathir Mohamad has confirmed DAP questioning the motives of UMNO Youth Deputy President and Prime Minister Datuk Seri Abdullah Ahmad Badawi’s son-in-law Khairy Jamaluddin’s recent racially provocative statements, as an attempt to solicit Malay support to distract attention from his personal political problems within UMNO. Lest Malaysians forget in responding to Mahathir’s attacks against him during UMNO Youth meetings, Khairy not only wept but had to declare faithfulness to his wife Nori Abdullah, sold off his 9.2 million shares in ECM-Libra and even called Mahathir a “monkey” when Khairy was not even born when Mahathir first became Education Minister.

For a millionaire Malay like Khairy to complain that Malays are marginalised in Penang is hypocritical and discriminatory when he ignores non-Malays who are marginalised not just in Penang but also (together with other non-Penang Malays) throughout Malaysia. Has millionaire Khairy forgotten that not every Indians and Chinese whether in or outside Penang are millionaires like him?

And has Khairy forgotten that there are poorer Malays who are also not millionaires like him and marginalized in the poorest states of Sabah, Kelantan, Terengganu Kedah and Perlis. Penang has the lowest poverty rate in the country at 0.3% but high income inequality as not every family earns the mean monthly household income of RM 3,531. By focusing only on Penang, is Khairy trying again to distract attention that Malays are not marginalized in the poorest states in Malaysia with the highest poverty rate of Sabah(23%), Kelantan (10.6%), Terengganu(15.4%), Kedah (7%) and Perlis (6.3%).

UMNO leaders such as Khairy must be naïve to think that Malaysians, including Malays, are so gullible as to believe that Malays are marginalized in Penang but not in other states. The United Nations Human Development Report consistently list Malaysians as suffering the worst income inequality between the rich and poor in South-East Asia. This is conceded by the 9MP which showed the share of income of the bottom 40% of the population declined from 14.5% in 1990 to 13.5% in 2004 whilst the share of the top 20% of the population increased from 50% in 1990 to 51.2% in 2004.

The income inequality within the Chinese community worsened in the period 1999 to 2004 from 0.434 to 0.446 whilst for Indians from 0.413 to 0.425. The income inequality amongst bumis was even worse from 0.433 in 1999 to 0.452 in 2004. Marginalisation of Malaysians generally can be seen with the 9MP showing the Gini Coefficient nationally worsening from 0.452 in 1999 to 0.462 in 2004.

How come Khairy does not talk of reducing the widening income disparity between rich Malay millionaires like him and poor Malays but continue to hit out at Chinese as if there are no poor Chinese and all Chinese are millionaires like him? If Khairy is sincere about helping poor Malays and Malaysians who are marginalized he should be asking the government to abolish the 5% bumi housing discounts given to million ringgit homes (as if Malay millionaires like him need a discount) and distribute Petronas RM 70 billion ringgit profits to the people.

What the poor and marginalized Malaysians need now is increase in disposable income to deal with rising inflation and living costs, whether in the form of pay rise or government grants, which the 2007 Budget has miserably failed to provide. Since Petronas was formed in 1974, its earnings have exceeded RM 500 billion as compared to Singapore which does not have a drop of oil. If a non-oil exporter like Singapore can give S$2.6 billion (RM 6 billion) cash under the 2006 Budget to all Singaporeans, especially the poor, why can’t the Malaysian government do so when Petronas has earned nearly RM 500 billion. Oil importer Singapore has given $10.675 billion  (RM 24 billion) directly to its people since 2000 as compared to Petronas which has not given a single cent.

This year its pre-tax profits hitting RM70.2 billion jumped 21 per cent compared to RM58 billion in the previous financial year ending 31 March 2006. Net profit rose to RM43.6 billion from RM35.6 billion. To get an idea of Petronas' size, the net profit of Malaysia's largest listed company, Malayan Banking, was just RM2.5 billion. This year alone, the oil company has paid the government a total of RM41.7 billion - equivalent to what it would take to build 23 Kuala Lumpur City Centre (KLCC) complexes, including the Petronas Twin Towers.

Instead of taxing Petronas, DAP suggests that the pre-tax profits be distributed to every Malaysian to a maximum of RM 2,000 each with the remainder given to Petronas for capital investment purposes. If an oil importer Singapore can give tens of billions to its citizens why can’t an oil exporter like Malaysia do so.

Are UMNO and Khairy Afraid Of Answering The Question Who Amongst The Malays Own 45% Or RM 325 Billion Of The RM 715 Billion Market Capitalization of Bursa Malaysia?

Khairy again talks of the failure of the New Economic Policy(NEP) to fulfill its objective of 30% bumi equity compared with the 18.9% in 2004 and that the Ninth Malaysian Plan(9MP) is the final chance to achieve it. This is untrue because the 18.9% bumi equity is based on par value of share capital of limited companies. The 9MP claims that in 2004, the Chinese owns 39%, Indians 1.2%, nominee companies 8%, others 0.4% and foreigners 32.5%.

Par value of share capital is a false reflection of the real or true worth of the company. A more accurate assessment, though not the most comprehensive and objective test, would be to take the market value of bumi equity of all listed companies in Bursa Malaysia (BM). As a millionaire from his previous shareholdings in ECM-Libra, which he has since sold, Khairy should know that his worth is not based on par value but market value.

In February 2006, Professor Dr Lim of the Centre for Public Policy Studies(CPPS), submitted a report that showed as at 30 September 2005, bumi ownership of shares in BM amounted to 45% or RM 325.08 billion  out of the market capitalization of RM 715 billion. The CPSS is set up by the independent think-tank Asian Strategy and Leadership Institute as an independent research group, headed by Professor Dr Lim Teck Ghee.

Professor Dr Lim indicated that if the bumi had not sold off their shares, their equity stake would easily have been higher than the 45%. An estimated 40% of the preferential shares given to bumis were sold by them for profit gains. Documented verification is provided by an academic working paper titled, “Privatisation of Ports: A Malaysian Case Study” by Associate Professor Malcolm Tull and Dr James Revely of Murdoch University in January 2001,

“…Many shareholders took advantage of the opportunity to realise short-term capital gains and sold their shares. The sale of shares in Klang Container Terminal and other privatised companies has, however, led to a dilution of Bumiputra equity: between 1983 and 1990 it declined from 65 per cent to 38 per cent of total paid up capital on the KLSE.”

In this case Malays sold off 41% of the shares allotted to them. If this had not happened, then the Malay bumi equity component will rise to as much as 70% of BM’s market capitalization. The more important question then is therefore not attaining 30% bumi equity which has been achieved but who amongst the Malays owns the 45% bumi equity of BN based on market capitalizaton

Are UMNO and Khairy afraid of answering the question who amongst the Malays own the 45% or RM 325 Billion of the RM 715 billion market capitalization of Bursa Malaysia? Malaysians, especially Malays who do not possess millions of shares or imported vehicles APs, should focus on the important question who are the rich Malays who have benefited. And not be distracted by false lies of such rich or millionaire UMNO leaders who do not wish to answer this question and try to distract attention with lies that the 30% bumi equity of the NEP has not been achieved.

DAP will launch a campaign tomorrow night(Wednesday) at our 2007 Budget forum in the Selangor Chinese Assembly Hall that the 9MP not be about achieving the NEP’s 30% bumi equity which is already achieved, but identify and reveal the Malay owners of the 45% market capitalizaton of Bursa Malaysia. Amongst the speakers are CEO of listed company, Tony Pua, and a chartered accountant Mr Chow Kee Kan.

Just as the 2007 Budget has not benefited lower-income groups, we should adopt the correct macroeconomic policy and discard nationally divisive and outdated policies of quotas and subsidies. Such racial policies like the NEP must be replaced by those which forges national unity and encourages competition, value creation and meritocracy. Malaysian must abandon the racial premise of the NEP and its false pursuit of 30% bumi equity to pursue the real UMNO Malay owners who possess the 45% market capitalization of Bursa Malaysia.

(05/09/2006)