This article first appeared in The Edge Financial Daily on October 31, 2019

KUALA LUMPUR: Government-linked companies (GLCs) and government-linked investment companies (GLICs) must re-evaluate their participation in Corporate Malaysia in light of the evolving business landscape, said Tun Dr Mahathir Mohamad.

The prime minister, speaking at the launch of the PNB Corporate Summit 2019 yesterday, said GLCs and GLICs have specific mandates and should avoid crowding out and competing directly with the private sector, especially in non-strategic businesses.

“The government has no business to be in business.

“GLCs and GLICs must focus on creating strong institutions and establishing the necessary infrastructure and supportive policies to fuel growth, and in so doing become a catalyst that would spur the private sector.

“The expansion of the private sector is vital to spur growth by creating more opportunities for employment, enabling entrepreneurs to scale up their businesses and to bring in foreign direct investment to accelerate domestic growth,” said Dr Mahathir.

He recalled the height of Malaysia’s economic growth in the 1990s, before the 1998 Asian financial crisis, when he said the private sector was a core engine of Malaysia’s success.

“As a result, over the 10 years before 1998, GDP (gross domestic product) growth was on a strong trajectory averaging at 9%,” he said.

Dr Mahathir added that GLCs and GLICs “must recognise it is not their role to smother opportunities for others”.

“To build a solid and inclusive future for Malaysia, GLCs and GLICs must re-evaluate their level of participation in Corporate Malaysia and recognise their synergies with the private sector, particularly towards empowering entrepreneurs.”

Dr Mahathir’s message was echoed by Permodalan Nasional Bhd chairman Tan Sri Dr Zeti Akhtar Aziz.

In her opening speech, Zeti pointed to three vital imperatives to be tackled by the public sector in order to strengthen the foundations of the nation’s economy.

“[The public sector has] to enhance efficiency and productivity of the bureaucracy. That needs to involve greater leverage in technology, systems, governance, and that will avoid leakages, founded on the highest level of efficiency and integrity,” she said.

The nation must also have a strengthened education system that will support future growth and transformation that is being envisaged.

“And the third is to strengthen the financial position of the public sector. While not in the condition of debt distress, the prevailing position limits greater potential for the role of fiscal policy,” she added.

She said Corporate Malaysia also has a key role towards driving and achieving the sustainable growth agenda.

“This involves having stronger corporations that are operating in keeping with international trends.

“Towards this, and echoing the government’s call for transformation, GLCs must be conscious of their role in the economy and to re-evaluate their priorities to support this,” she said.