2015 Budget (4) – A Critique
by Economic Adviser
18th October 2014
In indicating a further RM 600 million to EKUINAS to enable it to increase Bumiputera corporate equity the Prime Minister observed that the Bumiputera have yet to achieve the 30% target.
He further noted their effective control over corporations is currently only around 10%.
The Prime Minister appears to be playing to the right-wing gallery in his party by making these assertions which are unsubstantiated.
No details have been provided or reference made to any rigorous study.
Even a cursory review shows that GLCs are almost entirely Bumiputera controlled. The GLCs listed on the stock exchange account for almost 30 percent of paid up capital.
Earlier estimates in the government’s own Five Year Malaysia Plans show that even using the disputed par value approach, Bumiputera ownership of shares in limited companies increased from 19 percent to 22 percent in 2008, while the non-Bumiputera share declined from 41 percent to 36.7 percent during the same period.
The Prime Minister needs to provide specifics. There is an urgent need to lift the veil of secrecy and to let daylight in to settle the issue of how these calculations of equity ownership are done.
Off the cuff references to these sensitive and divisive statistics do not serve the national interest and contribute to the creation of unnecessary tensions.
It is imperative that in calculating the respective ethnic shares of corporate equity, that the apportionment factor in the share of GLCs as well as nominee companies be according to the ethnic composition of the country.
The Prime Minister needs to be reminded that the restructuring of society had two prongs.
Beyond the issue of ownership of equity, there was a parallel call for eradication of poverty irrespective of race.
The Speech makes no reference to this issue even as poverty exists among many segments of the population and in regions of the country.
No targeted allocations are made in the Budget to address poverty incidence among minority groups such as Indians and Orang Asli.
(to be continued)