Gomez: [Dr] Mahathir knew if he took control of Khazanah and PNB, he would be taking control of the largest enterprises in Malaysia. (Photo by: Patrick Goh/The Edge)
KUALA LUMPUR (Oct 30): Prime Minister Tun Dr Mahathir Mohamad is still "de-facto" finance minister despite not officially holding the portfolio, as he has consolidated control over key statutory bodies and ministries, says Institute for Democracy and Economic Affairs (IDEAS) senior fellow Dr Edmund Terence Gomez.
At the launch of IDEAS' GLC Monitor 2019: State of Play Since GE14 report, Gomez — who is also Dean of the Economics and Administration Faculty at University of Malaya — said Dr Mahathir had moved control of Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB) to the Prime Minister's Department (PMD) from the Ministry of Finance (MoF) previously, despite being prohibited from holding the Ministry of Finance (MoF) portfolio after the 14th general elections last year.
"[Dr] Mahathir knew if he took control of Khazanah and PNB, he would be taking control of the largest enterprises in Malaysia," he explained.
Dr Mahathir is currently chairman of Khazanah and Yayasan Pelaburan Bumiputera (YBB), which maintains PNB as an investment vehicle.
Gomez said the MoF had been "dismembered", and its roles reduced in favour of the Prime Minister's Department (PMD), Ministry of Entrepreneur Development (MED), Ministry of Rural Development (MRD) and Ministry of Economic Affairs (MEA).
He pointed out that notably, these ministries, which control key government-linked companies (GLCs) and statutory bodies, are led by people from his own party Bersatu and political allies.
For instance, control of key GLCs and statutory bodies had been moved to the MEA, which is under the control of PKR deputy president Datuk Seri Mohamed Azmin Ali, who is deemed to be an ally of Dr Mahathir; MRD, headed by Bersatu women's chief Datuk Seri Rina Mohd Harun; and MED, headed by Bersatu's Datuk Seri Mohd Redzuan Md Yusof.
Azmin sits on the boards of both Khazanah and YBB.
The academic also shared that some GLCs that were under the MoF have been moved to the MRD, MED and PMD, thus consolidating GLCs under Bersatu, he said.
In particular, Gomez commented that the Bumiputera GLCs such as FGV Holdings Bhd were parked under the MEA.
Meanwhile, statutory bodies such as the Rubber Industry Smallholders Development Authority (RISDA) were placed under the purview of the MRD.
In the case of MED, it controls financing for small to medium enterprises (SMEs) such as SME Corp. According to Gomez, 98% of businesses in Malaysia are SMEs.
Thus, this showed that the system which existed under the previous Barisan Nasional regime continues in the present day, with control of the corporate sector having been consolidated in the same way as before, he added.
In order to remedy this issue, Gomez said that firstly, the "GLC" world needs to be reconstructed, and there needs to be an account of how many GLCs are present.
Secondly, Gomez said work needs to be done to distinguish between "good and bad" GLCs and set up transparent measures and guidelines for these entities.