Quota free announcement sends shiver to PR

As I settled into my hotel bedroom in Jakarta last Friday while on my trip there, I watched the CNBC 30 minutes interview with the Prime Minister, Datuk Seri Najib Tun Razak by chance after switching channels few times for the right programme for the night before I hit the sack.

The interview show came after the major announcement by Datuk Seri Najib three days earlier to do away with the 30% bumiputra equity which wins accolade from all strata of the society as well as foreign investors.

The move comes at the right time when the whole world is bracing for the hard economy which requires more foreign investment into the country to remain steady on the economic front globally.

No country is an island by itself if it wants to survive in this borderless world or what Thomas L. Friedman calls it a flat world.

So the timely announcement for a more liberal economic approach by Datuk Seri Najib is a move in the right direction.

The important announcement by the Prime Minister that the 30% bumiputra quota requirement for companies seeking to list on the Bursa Malaysia would be done away with is definitely great news for many companies which are looking to invest in this country.

The previous requirement of 30% bumiputra equity in fact is doing more harm than good to the country’s economy, resulting in many of these major companies shifting their investment to countries like Indonesia, Cambodia and Vietnam where economic approach is more liberal and friendly to investors apart from the cheap labour cost.

The Foreign Investment Committee (FIC) which dictates regulations governing the foreign investments into the country, instead of attracting foreign investors had in fact chased them away with those unfriendly policies which made Malaysia not economically conducive for investment.

The scrapping of the FIC as announced by the Prime Minister must be pleasing to the ears of many foreign investors who are hoping to invest in this country.

With FIC no longer in existence, the emphasis would now be on participation instead of equity as announced by Datuk Seri Najib.

There is no point to make it unfriendly to these foreign investors with various controls and regulations which are meant to protect the bumiputra interest when at the macro level, our country is bound to lose out to the so-called third world countries like Cambodia, Vietnam, Thailand and Indonesia which are offering even more attractive packages to foreign investors.

As I was In Jakarta, my tourists guide by the name of Teddy was telling me that the incumbent President of Indonesia, Susilo Bambang Yudhoyono or fondly called SBY is well liked by most Indonesians for his neo-liberal economic approach.

By the time I write this column, SBY has been reported to be on an unassailable lead to continue his second term in office compared to his two rivals, Megawati Sukarnoputri and Jusuf Kalla.

His popularity among the Indonesians is understood based on his five years of steady economic growth, slow but even handed reform of bureaucracy and security forces and a tough anti-corruption drive which has netted several senior officials.

SBY, according to Channel News Asia had weathered the global financial meltdown with strong domestic demand underpinning growth at around 4% this year, the highest in the region and third only to China and India among the G20 countries

“Saya sokong SBY sebab di bawah pemerintahannya, semua rakyat Indonesia senang cari makan dan ekonomi pun baik,” Teddy told me as he chauffeured me on a three hours drive amid the massive traffic jam to Bandung.

So Datuk Seri Najib who has barely assumed office for about 100 days is definitely on the right track despite him facing resistance from within Umno for his liberal approach.

Such protectionist policies which have been done away with are akin to taking away the crutches from the bumiputra who have enjoyed the privileges for decades.

But the slumber is not forever in this case as the hard fact is that the world outside is already moving leaps and bounds leaving our country way behind if such myopic outlook of the bumiputra remains, resulting in our country becoming uncompetitive internationally.

Kudos must go to Datuk Seri Najib for his bravery in coming out with this tough decision which may stir the hornet’s nest among the Malays but the Prime Minister is definitely wise enough to know that he will do injustice to Malaysians of all races if he continues with the populist measures meant only for political mileage.

Najib, you’ve sent shiver to PR by now!