Friday, July 3, 2009

FIC-BUMIPUTERA-MALAYSIA

1. This blog is not to list down everything about the liberalisation of Foreign Investment Committee made by government a few days ago but I would like my readers to think and analysie it.

2. The liberalisation primarily to eliminate some of the regulations that seems irrelevant with nowadays economic situation. It is mainly to boost the corporate sector as well as to ensure the foreign country keep injecting their investment towards Malaysia.One of the main regulation that has been eliminated is there is no more regulation to have 30% of Bumiputera equity for a company to be listed.

3.First we should look why this regulation removed. Foreign investor and non-bumi view this regulation as a barrier because the participation of Bumiputera is limited and low. They did not have enough capital and most of cases happen which the Bumiputera more rather to sell the equity as a fast-track for them to get rich. As example from 1990 until 2006 the percentage of Bumiputera's equity is between 19.3 and 19.4. Beside that from the 54 billion of equity that had been distributed to Bumiputera, only 2 billion is still 'alive' while the rest is been sold.

4. To replace this, the government come out with a new regulation that 50% from 25% 'tebaran awam' should be given to Bumiputera's investors and more than that, the government has launched Ekuinas to increase the Bumiputera's equity in potential sector such as tourism,biotechnology, medical etc. This new company will ensure the effcetiveness of Bumiputera participation in economy growth.

5. It is a radical move for Bumiputera to discourage them from practicing Ali Baba or sleep partner anymore. For over 16 years the equity of Bumiputera remains slow and we cannot hold the old instrumen to achieve the 30% target. We need a trigger, a shockwave for Bumiputera to be more competitive and relevant in this new era of economy.Instead the 30% target is still maintained by government in macro level. I believe this will attract more investor to inject our growth and thus open more company and enlarge corporate sector in this country. This, indirectly will maintain the circulation of economy as the continuous and more investment will provide more employment and increase the quality of product as the competitiveness become more tough and challenging.

6.Perhaps some will argue by say that liberalisation will lead our country to capitalism and as we know capitalism is something like 'rich become more richer, poor become more poorer'. But should we apply the communism style?It will our people become more suffer as we closed the door for foreign to invest and boost out our economy. Our country as been taught in syllabus is practicing mixed system which the government will intervene to stabilise the national economy.

7. We believed that China still adopted the sosialism system but how can they keep maintain their economy growth in the midst of recent economy crisis?Why their economy did not turmoil like what has been experienced by other countries? China is opening their door for foreign investment and their economy environment keep attract the foreign to come and invest.Now the investors have more choice to invest as Vietnam also now opening their country for more foreign investment.

8. If Malaysia want to compete with these countries, we cannot stand with the old instrument. We must to ensure our country become more friendly investor and the economy environment is attracting the foreign to keep injecting our economy. This, however been viewed as loss of more sovereignty on our own economy since the termination of real estate transaction of FIC in the new regulation but there is exception for transaction that involves Bumiputera's real estate. The government instead will monitor any real estate transaction that involves Bumi or govt agency to foreign and for this such transaction, the foreign company need to have 30% of Bumiputera's equity.

9.It is obvious that the 30% of Bumiputera's equity is not fullt vanish.It is not use anymore for the foreign companys to be listed and start their business here only. The more they come and start their business here, the revenue and tax payment will be more generate and this will benefit the government to use the tax payment for social facilities and development.

10. I think it is time for us to focus on local investors so that they also will benefit from the economy policy and survive in current ecomony environment.Local company especially the bumiputera or Malay will also contribute in payment of zakat harta which help the government to close the gap between rich and poor beside the zakat payment can be used to help the poor people start to work and particapte in economy activities such as business etc. This will keep our country to maintain the businees activities especially in middle-small industry sector.

11. We cannot afford to recover from economy crisis by having foreign investment but we must encourage our investor to invest in the local too as well as to other countries. We need to generate our export and I believed that our export orientated based on electronic should be reorientated back as I know that we as the Islamic country may establish the halal food hub.Perhaps we can export our halal food to Arab and Islam country because I did not heard any Arab country affected by this current economy situation.More than that this kind of export can enter Europe countries as there are also a lot of Muslims communities there and I sure the demands of halal food is critical for this such communities.

12. I'm not support capitalism or communism because I don't think either these two systems are benefit people. Eventhough communism embrace social justice but I don't think the justice affected the administration people or their leader. Yet the people who will affected by any sanctions,shortage and other economy policy but the leader or admin people will stay healthy and alive. That's why I prefer more on mixed system with the combination of Islamic economy(zakat, baitulmal etc) it will help to maintain the ecomony.But how effective it is, it depends to those who implement and execute it.

13.Globalisation and recent ecomony situation has changed us but we too, should change the shape of the globalisation by participating with recent instrument and tactics in order to keep develop and become the 'player' of globalisation, not become the predator and loser!

(copypaste is allowed for pre-lawrians who take global issues paper as this may help to elaborate your points of the effect of globalisation in economy. I guess it help so. Any improvements and further comments or ideas are welcomed)

5 comments:

  1. Salam Z..

    nice input...keep it up bro..


    =)

    ReplyDelete
  2. Bak kata Mr Wong..
    "kita consumer adalah penentu ekonomi negara..Lagi byk kt membeli..lagi meningkatlah ekonomi kita "
    -So, maksudnya kita kena berbelanja jgn kedekut2 beli brg2 yg kt suker..niat supaya ekonomi negara kt pulih..haha..
    -xde la..just kiddin..Hani nk ambik kesempatan ini utk menyeru pembaca2 blog z ini utk membeli la brg2 di kedai melayu..Kalau boleh la..n kalau ada..saper lagi nk tlg bangsa kt kalau bkan kt..tul x?

    ReplyDelete
  3. be a loyal supporter, yeah.

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  4. Mostly you talked about how important is the liberalization. Nobody can deny that the globalization is here and we have to face it.

    Surely this move will increase foreign investments thus enable our country to grow and prosper. But who will benefit from this new system? Local investors? Who are they?

    You yourself wanted for us to be wealthy ( I have a dream *The Malays will reach 30% of NEP and more than that).

    Then please tell me how can we get rich through this new method. All it does is, like you said, making the rich richer and the poor poorer.

    Let me know your views on how this new plan will work, not why it is happening.


    http://pyoison.blogspot.com/2009/07/30-equity-bumiputra.html

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  5. the Ekuinas policy is unclear. Need more explanation i guess.
    Well i just can say that the liberalisation will enhance the competition of bumi in business. This will show the true quality of us and help to trigger the determination and take measures on how to become better. After all the liberalisation did not vanished the 30% of Bumi as it is not applied for company to be listed. It still remains in macro level and in the transaction of bumi or govt estates

    well i'm glad to have opinion of yours since i belive u have the expertise of economy more than i am

    ReplyDelete

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