Dr M says GLCs not serving intended purpose

This article first appeared in The Edge Financial Daily, on April 6, 2018.
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KUALA LUMPUR: Former prime minister Tun Dr Mahathir Mohamad said government-linked companies (GLCs) have grown to become “monsters” and are not serving the purpose that was originally intended.

GLCs were created to reduce the disparity between the rich and the poor, he said at a forum organised by the Minorities Rights Action Party yesterday.

“One thing that we did was to try to give the Malays more shares. But they didn’t have the money and [whenever] we gave them the shares they sold them.

“So we created GLCs, to ensure the money rests with the GLCs, which will be holding the shares for the Malays,” said the chairman of Parti Pribumi Bersatu Malaysia.

“But when we created GLCs, we never realised they were going to become a monster. Without supervision, GLCs have now become a monster, they are huge and rich,” he added.

Accusing the current administration of not knowing the spirit of GLCs, Dr Mahathir said this must be corrected “to give more chances to poor people, regardless of skin colour”.

The veteran politician was asked by participants at the forum whether the Pakatan Harapan coalition he is leading would review the government’s procurement policy and have an open tender for all contracts should it come to power.

“Seems like my past sin has caught up with me,” he replied. “I was one of the first few persons accused of cronyism for giving contracts to cronies, but it is of course not really true.

“When we give contracts to anyone, we must be sure that they have the capacity to implement whatever that is given to them. Unfortunately, there are not many of them, even until today,” he added.

Dr Mahathir also said that during his tenure as prime minister, it was necessary for the government to have affirmative action to reduce wealth disparity between races.

“At that time, the purpose was to reduce the disparity of wealth between different races, because if there is extreme or large disparity of wealth even in a single-ethnic society, there will be potential for conflict and violence.

“In a multi-ethnic society like Malaysia, and with extreme disparity whereby rich people are in one race, the potential for conflict is much greater,” he said.

It is for that reason that the country’s second prime minister, Tun Abdul Razak, introduced affirmative action, he said, adding that the government was then seen to be favouring the Malays.

“But in essence we were not favouring the Malays, we were helping the poor community. Of course, with affirmative action, a lot of people were not happy, but if we didn’t do this, the unhappiness will be far greater [as] we would be allowing the disparity to increase,” he added.

The former premier said it was also due to the affirmative action that Malaysia managed to avoid social disorder arising from interracial conflicts.

“During the Asian Financial Crisis, in Indonesia, the crisis was blamed on the local Chinese, because they were rich. But it was not their fault, it was the currency traders to be blamed.

“That was the time that people thought that it was better to be in Malaysia, because the Malays did not blame the Chinese, did not riot and kill. We helped them to come up. A lot of them were given scholarships to become doctors and lawyers,” he said.