(Petaling Jaya, Wednesday): Economic Adviser and Executive Director of the National Economic Action Council (NEAC), Tun Daim Zainuddin said yesterday that non-bumiputeras may be allowed to buy bumiputera stakes in companies.
He told foreign correspondents in Kuala Lumpur yesterday: "We are a very disciplined society. Irf there are groups that are prepared to buy, the Government is not going to stop them from buying."
In actual fact, two weeks before his meeting with the foreign correspondents in Kuala Lumpur yesterday, Daim had already given more details to the Far Eastern Economic Review in its Feb. 19 cover issue which came out two weeks ago, and which reported:
"Daim has been given carte blanche to scrutinize Malaysia’s economy because the NEAC’s job is to fix it - before the crisis gets worse. And according to insiders, he has been given the sweeping powers to do just that. From what Daim has said so far, he could use those powers to sacrifice some fundamental aspects of Malaysia’s near-sacrosanct New Economic Policy. If he does, it could cause an economic earthquake, with possible political tremors…
"Now Daim says that the Chinese should be able to buy into strategic industries currently controlled by bumiputeras. (These industries would include banking, financial services, transport and telecommunications.) He says he would approve Chinese takeovers of Malay businesses that are in trouble. ‘I’d allow them to rescue ailing companies. After they recover, they can talk about ownership,’ he told the REVIEW. Would foreigners also be allowed to buy into ailing companies? ‘That’s okay as long as they bring in capital,’ he said. ‘You need a few fellows to move in for confidence to come back. If you say ‘no, no’, confidence won’t return.’"
In his meeting with the foreign correspondents yesterday, Daim has indicated that the Far Eastern Economic Review report is not entirely right as Daim was quoted by a foreign agency report as saying that "for the time being" the change in policy would only apply to non-bumiputera investors rather than foreigners.
In the face of the economic crisis, which Daim had described as "the worst crisis we’ve faced since the Second World War" and his admission that "the primary task of the NEAC is to restore confidence" although the country is eighth month into the crisis, the NEAC must be bolder to mobilise and galvanise all Malaysians to respond as one unit to ensure the quickest possible economic turnaround with the minimum of avoidable pain, hardships and sufferings to the people. The time has come for Malaysia to go beyond the old bumiputera and non-bumiputera distinction and recognise all Malaysians as the new bumiputeras who swim or sink in the same boat
I hope the NEAC would dare to give this bold idea serious consideration, recommend it for adoption by the Cabinet and Government, and better still, get it incorporated into the Yang di Pertuan Agong’s Royal Address as government policy when declaring open the new session of Parliament on March 23.
I welcome Daim’s statement that the NEAC, which had met with 150 groups since it was set up earlier this year, would present a draft of its proposals by early April, as only last Friday, I had called on the NEAC to operate with greater openness and transparency, announce the full membership of its five-man executive council and present a report of the progress of its four-point commission in the form of a White Paper in next month's Parliament.
The National Economic Recovery Plan being drafted by the NEAC should be formally presented, debated and passed by Parliament in early April so that it has the full backing of all Malaysians, regardless of race, religion or party politics.
The NEAC should realise why there has been very lukewarm response to high-levels calls to Malaysians to sell their overseas properties abroad and convert their jewellery to place them in local banks to strengthen the country’s foreign currency - firstly, because of the failure of the political and corporate leadership to set an example, and secondly, the inability of the government to overcome the credibility gap and restore full public confidence in the government.
Between 30th June last year and 15th January 1998, Bank Negara lost RM14.1 billion in external reserves in trying to defend the ringgit against the US dollar, while Malaysia’s external debt of US$45.2 billion had more than doubled our external reserves.
The government’s exhortation to Malaysians to sell their properties overseas and their jewellery to strengthen the country’s external reserves has not met with much success although there has been considerable publicity.
Has the NEAC studied the reasons why and is Daim prepared to publicly discuss the problems why such a campaign has not been a success?
As the problem of the information deficit is central to the question of confidence-restoration, has the NEAC grasped this problem and recommended greater press freedom, whether on the printed or electronic media, in the country and to allow for a freer flow of information in keeping with the information technology revolution?
Daim said whatever the Government does is often viewed negatively and that "Even my appointment (as NEAC executive director) is viewed negatively". If Daim is going to be the "financial wizard to fix the stricken Malaysian economy", he should understand the reasons for such negative public reactions.
Daim should know that one important reason for the negative reactions to his appointment is the public doubt as to how he could be part of the solution to the crisis when he had been part of the problems leading to the crisis.
This was also one of my primary doubts but I am prepared to put them aside to give the NEAC the benefit of the doubt, as it is in the interests of the country that all Malaysians should unite to tide through the economic crisis as one unit.
The challenge for Daim is whether from being part of the problem, he could be part, even important part, of the solution.