Economist: Set up ministry for GLCs, GLICs

A prominent economist has proposed setting up of a ministry in charge of all government-linked corporations (GLC) and government-linked investment corporations (GLIC) as part of revamps in policies for the local business sector.

Political economics professor Edmund Terence Gomez said there is currently a lack of coordination among such institutions and noted how it has resulted in their poor performances.

"We had this before. The Ministry of Public Enterprises. Some people say we should not have it, but I disagree.

"If we look at other countries with many GLCs, they have coordinating units. The coordinating unit can even be a ministry," he told reporters when met after delivering a lecture on government policies and the corporate sector at Monash University in Sunway, Petaling Jaya.

The proposal, he said, would also be the first step to address the current problem of too much control over GLCs and GLICs being held in the hands of the prime minister who is also Finance Minister, largely through the Ministry of Finance Incorporated.

"At the moment there is a lack of coordination and often the left-hand doesn't know what the right hand is doing," he said.

Pressed on how the proposal can be implemented, Gomez pointed out that similar models have been introduced at state levels, citing as examples Selangor's Menteri Besar Incorporated and Johor's Johor Corporation.

"Selangor has created MBI. That's a start," he said although noting that criticisms have been made against politicians being appointed to head key state GLCs.

Unlike Selangor, Gomez said Johor had introduced a more successful model as evident by its KPJ chain of businesses.

Among others, he said the new unit can address investors concerns that policies on distribution of concessions will be done based on merit instead of from a racial dimension.

"Affirmative action has no place in the corporate sector," he stressed.

'Controlled by politicians'

Earlier in his lecture, Gomez had highlighted a study of Malaysia's Top 100 companies and GLICs which showed a shift in the trend of control from 1996 to 2013.

As of 2013, Gomez said the study found that there are only seven Umno-linked leaders holding director positions in top GLICs - four in Lembaga Tabung Haji and three in Khazanah.

On the other hand, he said it was also found in 2013 that the chairs of the companies have changed hands from the professional bureaucrats to non-professional politicians.

Over the years, Gomez said former premier Dr Mahathir Mohamad had taken bold steps to consolidate the GLCs during his time, from 59 companies down to only 10.

This was then followed through by the GLC transformation programme initiated during the times of Mahathir's successor Abdullah Ahmad Badawi, he said.

Describing Mahathir as being bold and Abdullah as being the opposite, Gomez said Prime Minister Najib Abdul Razak has been "selectively bold" in implementing promised reforms to the corporate sector.

"When it suits his purpose he will act," he noted.

Mahathir himself, despite setting the precedent for a prime minister to hold the Finance Minister's post, had reportedly said the position should now be separated in light of the 1MDB scandal.- Mkini