THE Malaysian Government’s move to force local forwarding companies to divest 51% of their equity to Bumiputera is the same idea that drove once prosperous Zimbabwe into economic ruins.
According to an article by Asia Sentinel, it said that expropriation moves would not work as they usually only enrich a class of opportunists.
“This will force productive people out of the country and least the rest with an impoverished economy.
“The Government needs to take a look at how closely Malaysia is following Zimbabwe, once one of the most prosperous countries in Africa, down the economic drain. Not for nothing did Bloomberg recently call Malaysia a failed economy,” the report stated.
In Sept, the Federation of Malaysian Freight Forwarders (FMFF) urged the Government to review its decision to force them to divest 51% of the businesses to Bumiputera, which simply meant that they were being told to sell their business to a Bumiputera or close down.
“If local logistics companies are compelled to sell a majority share to Bumiputera investors, it would mean that the Government is telling us to sell our business to a Bumiputera or close down.
“Bear in mind that by selling 51% of the business, it means the present owner can no longer control and run his business,” its president Alvin Chua was reported saying.
The Finance Ministry had since postponed the matter but made no mention of whether the policy has been rescinded for good.
With that, Kedah Parti Pribumi Bersatu Malaysia (Bersatu) information chief Khairul Anuar Ramli turned the matter into a racial issue by saying the DAP was opposed to the move as the latter was against Bumiputera from increasing their equity stake in the country.
Touching on the matter, the article warned that the prolonged measures under the New Economic Policy (NEP) was having adverse effects on the economy; with even local businesses leaving the country.
Citing an example, it noted that the business empire headed by “Sugar King” Tan Seri Robert Kuok has been slowly moving their business interests to outside Malaysia.
“Air Asia decentralised across the region due to high costs in Malaysia and better traffic opportunities elsewhere. Liberty Shipping has moved to Singapore.
“Genting Bhd moved its head office to Singapore. Hyundai closed its Asia Pacific headquarters in Malaysia and relocated to Indonesia, due to lack of a policy roadmap for the creation of an electric car industry.
“Tesco divested its assets in Malaysia. The IBM Global Delivery Center relocated its head office out of Malaysia. Malaysia-innovated ride-hailing service Grab set up its head office in Singapore rather than Malaysia.
“Other Malaysian high-tech companies that chose to start-up outside the country include Coin Gecko, a platform for multiple crypto-currency comparisons, and BigPay, a Malaysian banking app, also to Singapore,” it quipped.
As for multinational companies (MNC), the article said Malaysia missed a host of opportunities for innovative companies to start a venture in the country, which included Google, Amazon, Uber Technologies, Allianz, Vodafone Group and Akzo Nobel.
“Most moved to Singapore because of Malaysia’s relatively poor infrastructure, the poor level of human capital skills, and the poor regulatory framework. Zoom Video Communications has selected Singapore over Malaysia for their first R&D centre in the region,” it stressed.
On that note, it said that most of the policies under the NEP was misused by certain quarters to loot public treasury rent-seeking; with some being outright corruption.
“And the one-off super tax (Cukai Makmur) on companies with RM100 mil turnover or more from 24% to 33% for next year is a concerning precedent.
“Unfortunately, governments have poor credibility when they make promises about tax. This could potentially accelerate the exodus of large local companies exiting Malaysia and discourage foreign head offices to locate in Malaysia,” it remarked. – Nov 18, 2021.
