Proposal for a Land Corporation!

One proposal announced by no less than Deputy Prime Minister went relatively unnoticed at the recently concluded Bumiputera Economic Congress (BEC). The government plans to set up a Bumiputera Land Corporation (Perbadanan Tanah Bumiputera) to preserve land ownership, as part of an effort to strengthen the community.

If the lease size exceeds 50 acres (20.23ha) for agricultural land or 20 acres for industrial use, the proposal calls for 20 percent of the land to be handed back to the government upon lease renewal or extension. The returned portion of land would be then overseen by the corporation. The implications are tragic!

Source: https://en.wikipedia.org

If you had a small plantation of 50 acres growing oil palm for instance, and if you were non-bumiputera, you have to give up 10 acres upon lease renewal or even a mere extension. That will impact your yearly output. The amount of fresh fruit bunches decreases by 20 percent and so will your revenue. Profit may decrease even more than that because of loss of economies of scale. The corporation may hand it over to a privileged bumiputera who can then sell it back to the original lessor for a huge premium. That’s a quick and easy way to make money. Is this another “cepat kaya” scheme?

It also rivals approved permits and the infamous 30 percent bumiputera equity stipulation. Imagine the kind of havoc it will cause - factories, offices, plantations, food production etc. Currently, almost all leases are automatically renewed on the payment of a premium. 

The result of this ill-considered move to surrender 20 percent of larger tracts of land upon lease renewal or extension is a huge business disruption and the abuse of allocation of land to the privileged elite. That’s going to impact both domestic and foreign direct investments. In five cycles of lease renewal, I may have nothing! Of course I may not be around to see that but what an insidious idea!

Reference:

Comment: Zahid’s land corporation proposal is insidious, unfeasible, P Gunasegaram, Malaysiakini, 7 March 2024