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.