Economist proposes new law to ensure good governance of GLCs

An economist has suggested the government legislate a State-Owned Enterprise Act to ensure good governance and independence of government-linked companies (GLCs) and their regulators.

Speaking during a webinar today, PNB Research Institute CEO Intan Nadia Jalil said such a law that covered the management of these entities would allow them to compete with privately-owned companies.

"There is way to actually strengthen their governance and ensure that they can compete on a level playing field," she said.

"This is not the conventional way of levelling the playing field in the sense that GLCs typically get favourable treatment from the government but it is rather the fact that the ability of the government of the day to sort of influence the operation of GLCs as a shareholder or by holding a golden share," she said.

"The regulators should be independent, there was a plan from the previous government to have the regulators answerable to the Parliament," she said.

"One way of looking at the matter is the possibility of actually legislating a State-Owned Enterprise Act," she said.

She then cited entrepreneur states particular the US which drove strategic investment by invested in the development of the Internet and their components of technology.

Moving forward, she said GLCs should be regulated to ensure good governance, minimise leakages and curb undue political influence.

The webinar was organised by the Institute for Democracy and Economic Affairs (Ideas). Beside Intan, Harapan Damansara MP Tony Pua and World Bank Malaysia lead economist Richard Record were invited to talk about the government's ecosystem in the new normal.

Tony Pua

Pua criticised the Perikatan Nasional government for filling up the top positions in GLCs with politicians as reward of for their loyalty to the ruling coalition.

"It is always tempting to do so because it is a political resource the government of the day has.

"Any government of the day would be tempted to preserve their stability by fishing out pork-barrel positions," he said.

Pua said he disagreed with the government fully controlling GLCs. He, however, said the government needed to have a say in GLCs in order to protect public interest as many GLCs were running monopoly services.

As such, it was a challenge for the government to strike a balance between ensuring public interest is protected and not interfering in their commercial operations, he said.

The past BN government was criticised for controlling the country's leading GLCs which critics said had contributed to serious abuse of power leading to the notorious 1MDB scandal.

In its 14th general election manifesto, the immediate past government of Pakatan Harapan had pledged to reform GLCs appoint only professionals to national and state GLC boards.

However, former Prime Minister Dr Mahathir Mohamad was criticised for his continuation of political patronage in appointing politicians to head GLCs and government entities.

Ideas also pointed out that the reconfiguration of GLCs under Mahathir had benefitted Bersatu.

Prime Minister Muhyiddin Yassin, too, has been rapped for consolidating political power via the GLC appointments. - Mkini