| Issue 27 Vol II, November 15, 2006 | Archive |
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Oligarchy in the Making WHO really owns Malaysia? Its citizens, naturally. Both the question and the answer could be a rhetoric ploy. Not really if one follows the debate among the political class, academicians and the media. It all started last fortnight with one report by a research organisation, Asli or the Asian Strategy and Leadership Institute is headed by Mirzan Mahathir, son of former Prime Minister Dr. Mahathir Mohamad. It made startling revelations that Bumiputra, [sons of the soil] the original Malays, largely Muslim owned over 45 per cent of the equity against Malaysian government claims of just 18.5 per cent. Asli’s Centre for Public Policy Studies headed by Dr Lim Teck Ghee, a former United Nations regional adviser and World Bank senior political scientist, came to these conclusions and challenged the methodology of the government. The report concluded the target of 30% Bumiputra equity ownership which the government had promised to achieve had already been exceeded. It also said the official methodology inherited from the 1970s to measure corporate equity distribution was "narrowly-based, unrealistic and has resulted in an underestimation of the true volume and value of Bumiputra equity." It also said that the "selective patronage" had resulted in "serious intra-ethnic Malay cleavages", and the continued promotion of this policy would only raise antagonisms among Bumiputra that some are more favoured than others. It said the wealth was not equitably distributed among all the Malaysians. The last observation could hardly be disputed. As expected the report rattled the ruling party, the United Malays National Organization and Mirzan issued a statement saying the findings cannot be "vigorously justified". Mirzan also expressed deep regret over the "hurt and confusion felt by all Malaysians caused by the report." "On re-examining the methodology and conclusions of the report, Asli has concluded that there are shortcomings in assumption and calculation that led to conclusions that cannot be vigorously justified," he said. "As such, Asli feels that this report does not fairly reflect the true picture of total equity ownership by Bumiputras in Malaysia." Lim Teck Ghee defended his study and challenged the government to reveal its methodology. From Prime Minister Abdullah Ahmad Badawi down to every body declared that the findings were deeply flawed as these could be, but failed to reveal the basis of government study. Later the Deputy Finance Minister Awang Adek Husin revealed that Bumiputras equity ownership of the 912 companies listed on the main and second boards of Bursa Saham Malaysia (BSM or its stock exchange) stood at 36.64% and valued at Ringgit 78.4 billion as on Dec 31 last year. On the other hand, Malay ownership of all 717,935 companies registered with the Companies Commission of Malaysia (CCM) stood at 24%. As many as 172,568 companies or 24% out of 717,935 registered were controlled by Malays. The methodology used by the government to calculate the Bumiputra corporate equity ownership takes into account several main economic indicators. The last submitted annual statement of the companies registered with Companies Commission of Malaysia Equity ownership from public listed companies. He said information on the shares in registered companies is the main information in estimating equity ownership according to ethnic groups. Information used from company annual reports, among others is type of companies, companies' activities, race, citizenship, number of shares held by the shareholders. The companies' statement also contains lists of owners and number of shares owned by non-individuals, public-listed companies and government agencies. Technical details apart, the fact remains that poverty still persists in Malaysia and its promise of a full developed nation by 2020. It is also a fact the much of business was earlier in Chinese hands and the ruling party representing largely the Malays who form a big majority had little share. Encouraging them to own business and industry besides providing them government jobs has helped correct that skewed distribution of wealth. But it has created a class of people among the Malays that own more than the majority of their brothers and sisters. It has led to corruption and favouritism. Badawi like his predecessor Dr Tun Dr Mahathir Mohamad [prime minister for 22 long years] wants "A united nation, with a confident Malaysian society, infused by strong moral and ethical values, living in a society that is democratic, liberal and tolerant, caring, economically just and equitable, progressive and prosperous, and in full possession of an economy that is competitive, dynamic, robust and resilient." Currently they are fighting a public debate on several issues including corruption and Malaysia being a police state. "This must be a nation at peace with itself, territorially and ethnically integrated, living in harmony and full and fair partnership, made up of one Bangsa Malaysia with political loyalty and dedication to the nation." A positive aspect of this new study is that the debate on equitable wealth distribution is back on rails. Yet the fear is that it may not get lost in polemics and party power play. The Badawi government has drawn a plan to spend 100 billion Ringgit or 1225 billion rupees on education and rural development in next five years. There are large sections of population, 35 per cent who live in rural and coastal areas and suffer poverty and sickness. No nation could be a modern developed with such vast illiterate and poor people around. Its natural beauty, its highly developed roads and new cities are an asset. In its 49 years of existence as an independent country, Malaysia has shown unusual progress. Its agriculture economy stands transformed into robust industrial and service economy. It now boasts as one of south-east Asia's vibrant economies, the fruit of decades of industrial growth and political stability. It has also withstood the Asian crisis. And any country can be proud of all that. Yet Malaysia is still owned by a minority. And, that is the real challenge. |
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