In the wake of a new Government, many things need to be
restored – institutions, legislation, judiciary, education and other
processes. In the midst of this, is the
questions of the role of a stock market in a capitalist system. If seven Government-linked investment
institutions control 42% of the entire Bursa Malaysia in terms of market
capitalisation and control 68,000 companies directly or indirectly, then we
have a very significant concentration of power and control. (This was the findings of Prof. Edmund Terence Gomez of University Malaya).
Reforms therefore must include divestment/ dilution of MOF
Inc. control over these companies with professional managers and Boards in
place. The other is to have an
independent Oversight Commission to provide the necessary “checks and
balances”. MOF has no business to be in
business. It has to prioritise and
effect government fiscal/ development policies rather than be involved directly
in private sector initiatives.
There is a need to review affirmative action policies being
used in business. For example, State
Economic Development Corporations (SEDCs) are in a plethora of businesses. These are not listed and hence accountability
and productivity are lax. It is time for
companies within these SEDCs be divested to management (or others) on a
“deferred payment” basis. SEDCs were
useful in the 70s, 80s, and 90s but no longer.
They “crowd-out” small and medium scale businesses and depend on the
largesse of Government contracts and funds.
There is a lot on the plate for the new Government and
expectations are high. But dynamism of
the private sector must be harnessed or unleashed for the better progress of
the Bursa and the economy.
Source: Ideas
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