by Dr Chen Man Hin
The chief reason why PM Najib reform proposals are weak and timid is because he is unsure of getting full support from Umno. This was admitted as much when the PM speaking to Umno leaders recently called on them to change and accept liberalisation and reforms to win the support of the people.
The bulk of Umno is resistant to reforms and this was quite evident at the Umno general assembly last month, when the assemby ignored appeals to change and reform by PM Najib and ex PM Abdullah. The assembly was more interested in the debate on money politics. To have reforms meant they would have to give up cronyism and the wealth from government contracts.
Tunku Aziz, former world Transparency International leader said as much when he observed that Umno was still mired in corruption and cronyism and without their support, the vision of PM Najib’s 1Malaysia was ‘a cruel joke’ – a pipe dream of the Prime Minister, and not shared by Umno.
CAPITAL FINANCE LIBERALISATION MUST BE MEANINGFUL.
Today’s headlines highlighted PM Najib liberalisation of equity to allow 70% foreign equity in insurance and investment banking as THE NEW DEAL.
Liberalisation of capital finance in the economy should not be confined to one sector only of Insurance and Investment Banks. CAPITAL FINANCE many other sectors like corporations and the KL Bursa of listed companies.
Sectors of finance should be liberalised and both foreign and local investors should be involved.
What about the stock exchange structure? The Malaysian bourse should be open to both local and foreign investors without the imposition of the NEP requirement of 30% equity for bumiputras. To liberalise you need to expunge conditions which drive investors away.
The stock markets of Hong Kong, Singapore and Tokyo do not have the NEP to restrict listed companies. This is a major reason why the KL Bourse is so archaic and listless compared to the high flyers of Hong Kong, Tokyo and Singapore which foreign investors strongly seek a listing for their corporations.
Open up more banks instead of only room for 5 new commercial banks. Let more licences be given to boost the banking sector, as in more enlighted countries like the States, UK and the European Union.
Mr PM Najib, the journey of liberaisation and modernisation is demanding. Be dynamic and progressive, and use more effective instruments to modernise, instead of a peashooter if you really intend to promote progress and prosperity.