NEM shifts from Bumi equity to participation

By Lee Wei Lian - The Malaysian Insider

KUALA LUMPUR, March 30 — The New Economic Model will not have any targets for Bumiputera equity but will stress Bumiputera entrepreneurship, said National Economic Advisory Council (NEAC) chairman Tan Sri Amirsham Aziz today.

He said the NEAC recommendation was for the government tender system to be made more transparent but restrict relatively minor contracts to small Bumiputera contractors.

“We have no targets for Bumiputera equity in the NEM,” said Amirsham (picture) in a discussion with the media on the sidelines of the Invest Malaysia conference today.

“Some categories of tenders would exclude others, but we leave it to the government. But we are not talking about RM2 billion contracts.

“There is the objective of increasing Bumiputera entrepreneurship. We’re not talking about (restricting tenders) for big giants but reserving it only for a certain category of people. I think there is a need to tamper with government procurement.”

He added that it could be possible that an online system be implemented so that the public could check on which companies had the winning bids.

He also questioned the need for special discounts to Bumiputeras for million-ringgit homes but said that there was nothing wrong with discounts for low-wage earners.

“The spirit is helping the bottom 40 per cent improve their lives,” he said.

He said the NEAC was looking at the possibility of an anti-discrimination body but nothing was concrete.

“We’re looking at it. One of the things to take into account is to ensure fairness in competition and for the private sector to have fair access,” he said.

He added that there could be further allocation of funds to help Bumiputera entrepreneurs but said it would likely be through existing institutions and not in the form of a special bank for Bumiputeras as lobbied by right-wing Malay NGO Perkasa.

Quah said the NEM would stress skills training of low-income earners.

Asked about the NEM’s impact on the budget deficit, Amirsham said that they have not done calculations on the impact yet but one possible way to mitigate the fiscal impact would be to take out general subsidies and offer them only to the “right target groups”.

Another NEAC council member, London School of Economics Professor Danny Quah, said the NEM would stress skills training of low-income earners to boost their earning power, possibly through the establishment of a transformation fund.

“We help by growing capacity but eschewing fixed targets (for the low-income earners),” said Quah in a separate discussion with the media.