Is the PM also the “Finance Minister” of Malaysia?

Prof. Edmund Terence Gomez of IDEAS thinks so. According to him (The Edge Financial Daily, Oct 31, 2019), Dr. Mahathir Mohamad is the “de facto” finance minister. And this is despite not holding the portfolio. Why does he say that?

The PM has consolidated control over key statutory bodies and ministries in Malaysia. Khazanah Nasional and PNB are under PM’s Department not MOF as was previously. Those two are among the largest enterprises in Malaysia. Then his current favourite, Azmin Ali, has been appointed to both boards. Many of MOF’s roles have now been reduced with the rise of Ministry of Economic Affairs (MEA), Ministry of Rural Development (MRD) and Ministry of Entrepreneur Development (MED) all aligned to the PM.

GLCs and GLICs are generally with MEA. And it seems Bersatu is the clear “winner” in this consolidation of power. MED has SME Corp Malaysia which assists, as the name suggests, SMEs (and they constitute 98% of businesses). So what’s the difference with the previous regime? Very little as inferred by Prof. Gomez.

Then there is a need for establishing how many GLCs there are and to distinguish the ones that are viable or otherwise, says Prof. Gomez. This is a conundrum.

Beyond that is the “recycled” plan to privatise the better ones. This divestment is to a new breed of bumiputra entrepreneurs, who fall under the Shared Prosperity Vision, 2030. But how do we know he (Mahathir) plans to privatise the GLCs and GLICs? “The government has no business to be in business...” Tun Dr. Mahathir Mohamad (The Edge Financial Daily, Oct 30, 2019). Before the Asian Financial Crisis, it was the private sector that was the core of Malaysia’s success.

To monitor, divest and hold accountable, GLCs and GLICs, an “Oversight Commission” (not MEA) has to be formed. Independent professionals are appointed to chart the success and sale of enterprises to Malaysians, especially Bumiputras. Otherwise political patronage and “gravy” train of the previous administration will continue. This proposed “Commission” will also monitor emoluments of CEOs and key appointments to Boards/Management. Bumiputra intrapreneurs developed by GLCs or SEDCs will be given the chance to own wholly enterprises they helm. Financing for which is on a deferred payment basis. Many Government enterprises are reluctant to divest their subsidiaries to competent Bumiputra intrapreneurs because of sentiment, cashflow or profitability. Not doing so, is actually a dereliction of duty —— creating a class of bumiputra entrepreneurs for the nation.

A change of thinking at the top is necessary. MEA should facilitate the creation of successful bumiputra entrepreneurs emerging from GLCs and GLICs and not another “cog in the machine”.

So is the PM the “de facto” Finance Minister? Not really, he has consolidated power but control of finances remains with YB Lim Guan Eng for now.

Reference:

1. Mahathir still de facto finance minister —— IDEAS, 31 Oct 2019, The Edge Financial Daily

2. GLCs must re-evaluate participation in Corporate Malaysia, 31 Oct 2019, The Edge Financial Daily