Reforms at state-owned agencies gather speed — but will it be enough?

The preference for technocrats over political appointees is clear as the new govt seeks to root out corruption

By ALIFAH ZAINUDDIN / Pic By TMR

The government is putting the pedal to the metal as Putrajaya seeks to speed up the changes at state-owned agencies.

Dr Hasnita Hashim (Pic: TMRpic)

Last week, Dr Hasnita Hashim, a seasoned investment banker with an Oxford doctorate in nuclear physics, was appointed as the new chairperson of Majlis Amanah Raya (Mara).

The government agency which was created to assist the development of Bumiputera in various fields — largely entrepreneurship and education — over the years has been bogged down with various allegations and political interferences.

Hasnita’s appointment has been generally well-received overall. Many have expressed relief. Others are excited as it proves the country is not devoid of capable individuals.

Hasnita’s rise to become the first woman to lead the scandal-plagued Bumiputera agency has followed a streak of other notable appointments in the last few months.

Previously, such positions in state-owned agencies like Mara and the Federal Land Development Authority (Felda) were helmed by political figures or individuals with strong party affiliations.

Recent weeks saw the appointments of more technocrats to lead the way at government entities.

The appointment of former Securities Commission Malaysia executive chairman Tan Sri Mohammed Nor Md Yusof as the new head of pilgrim fund Lembaga Tabung Haji (TH) — following the resignation of Baling MP Datuk Seri Abdul Azeez Abdul Rahim — showed the government’s commitment to right the wrongs of many.

Similar changes had transpired at armed forces fund Lembaga Tabung Angkatan Tentera, regulator Malaysian Communications and Multimedia Commission and rural development arm Felcra Bhd.

The preference for technocrats over political appointees is clear as the new government seeks to fulfil its pledges to root out corruption and instal a credible leadership in these key institutions.

Last week, newly appointed Felda chairman Tan Sri Megat Zaharuddin Megat Mohd Nor was given a two-year timeline  to strengthen its cashflow and reduce its debt.

The former chairman of Malaysia’s largest bank, Malayan Banking Bhd, said the agency is working to monetise RM2.2 billion worth of assets. It is already looking to dispose of its hotels, apartments and student hostels as far as London in the UK.

Felda would also look to restructure some of its loans, he added.

The agency, which was created to help thousands of Felda settlers, is saddled with about RM8 billion of debts, cashflow constraints and massive paper losses in investments including a stake in Indonesia listed palm oil company PT Eagle High Plantations Tbk.

The government is preparing a white paper on Felda, which is expected to be tabled in Parliament.

Already at sovereign wealth fund Khazanah Nasional Bhd, where Prime Minister Tun Dr Mahathir Mohamad is the chairperson by default, there are talks of reducing interests in several government-linked companies (GLCs) and divesting non-core assets.

At the same time, Dr Mahathir has highlighted the need for acceptable wages and merit-based rewards at GLCs and government agencies.

The current administration has a massive debt to deal with, trust deficiency in governance and an all-out trade war looming on the global front. Deteriorating state-owned agencies like Felda, Mara, TH, as well as GLCs will only drag the country down into the abyss.

Global growth is already showing signs of pulling the brakes from the US-China tensions, worries over a possible recession in emerging markets, dwindling currency value and asset bubbles.

Malaysia’s economy must be strong enough to withstand these challenges.

These “highly qualified” people have herculean tasks ahead of them. Some of the damage may be irreparable. But the appointed heads now must lay a solid foundation to ensure these agencies, GLCs and state-owned assets will never be the tools for mismanagement and corruption again.

As the country ushers in the final quarter of the year, we can expect more changes ahead. Four months after May 9, the work has only just begun.