On April 22nd 2009, our PM, Datuk Najib made a bombshell announcement. He scrapped the 30% Bumiputera quota on equity ownership in 27 sub-sectors with immediate effect. These sub-sectors are health & social services, tourism services, transport, business, the computer industry and other related services. He also announced an open tender system for government contracts.
I was shocked when I read the news at first. Yet, as I thought about it further, it made good sense. Najib is an intelligent man. With all the huge controversies & scandals about him, he knows he won't be PM for too long. So I guess with this announcement, he hopes to finally really help the Malays whom are slowly swaying away from UMNO...& also try to win back the votes of the non-Malays. If all this works in his favour, he might be able to stay in power a bit longer.
Anyway, some might be wondering,...what is this 30% Bumiputera equity ?
It's part of the Malaysian "New" Economic Policy (NEP) which was launched in 1971 by Najib's father who was an ex-PM himself. It's a controversial policy with the intention to increase the status of Malays socioeconomically in a controversial manner.
The 30% equity is compulsory for public listed companies to have a minimum of 30% of their shares owned by Malays, a.k.a Bumiputera's. Or if a foreigner intends to set up a business here, the foreigner must have a Malay partner...at least 30%. If not, the foreigner can't set up the business at all.
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Now to be honest, I see more cons than pros in the NEP & 30% Bumi equity. Mainly because it greatly restricts the amount of foreign investment in the country. Why should a foreigner be forced to have a Malay partner anyway ? They might as well invest their money elsewhere.
Moreover, it only hinders the progress & competitiveness of Malays. Simply because they hardly have to work for getting that equity or partnership. It's automatically given to them regardless of their qualifications. Even for foreigners, it's highly likely for them to only get sleeping partners.
With this quota, everything becomes limited. The amount invested, the profit made, the progress & competitiveness of a company,...are all limited. Without such a quota, a company & its people can go on to achieve much more as there is nothing holding it back anymore. In a globalised world, a policy aimed for protection will only do more damage than good in the long run as business is now carried out globally & not just locally anymore.
The NEP is also known to only help the rich Malays get richer & the poor Malays remain poor. This is due to some Malays having political links & connections. So these lucky ones get all the government contracts & make big $$$. There wasn't even an open tender system for government contracts before...until now. This will help a lot to reduce corruption.
Even though changes are going slow, but they are big. It will help to increase competitiveness, attract more foreign investment, & stimulate the economic growth & financial sector of Malaysia. The Malays will now be able to compete among one another to progress & bring out the best in society. Quality of products & services will increase & the cost will decrease due to competition.
Najib also mentioned that the economy will be liberalised on an on-going basis. Which means that other discriminative policies in other sectors will slowly be removed in the near future. I personally am highly convinced that this is one thing that Najib will really do. He is a controversial man, but intelligent as well.
Najib knows that the Malays will not be able to survive in future if this protection mentality & policies continue any longer. Lastly, I'd like to mention a saying. Fish for your son, & he is full for the day. Teach your son to fish, & he is full forever.
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