In reviving MI2.0, govt needs to establish an autonomous committee to plan the landscape of MI2.0 according to the current economic condition, says an academician
By SHAHEERA AZNAM SHAH / Pic By ISMAIL CHE RUS
The revival of Malaysia Inc or Malaysia Inc 2.0 (MI2.0) mooted by Prime Minister (PM) Tun Dr Mahathir Mohamad has raised questions on the country’s future administration.
MI1.0, which was introduced by Dr Mahathir on Feb 25, 1983, during his first run as the country’s PM, was aimed at forging new partnerships between the public and private sectors.
The concept, which was deemed as an industrial strategy, was modelled after the Japanese economic development to stimulate mutual public-private partnerships and to target state investment.
During the 22 years of Dr Mahathir’s tenure, Malaysia witnessed the introduction of several new policies including the privatisation of companies and projects.
Among the privatised companies were Malaysia Airline System Bhd, Malaysian International Shipping Corp Bhd, Tradewinds Bhd, Klang Container Terminal Bhd and Edaran Otomobil Nasional Bhd.
In his recent speech at the Perdana Leadership Foundation CEO Forum 2019, Dr Mahathir said the concept of MI2.0 suggests that the private sector forms the commercial and economic arm of the national entreprise, while the government lays down the policy framework and direction.
Dr Mahathir outlined three components needed for the revival of the concept — a tighter collaboration between the private and public sectors, heightened financial protection of the public and regular interaction between the sectors.
Following the announcement of the concept in 1985, the government issued the Guidelines on Privatisation which outlined the importance and approach of privatisation.
The guidelines detailed out the country’s five objectives of privatisation — namely reducing the government’s financial burden; promoting business competition; stimulating private entrepreneurship and investment; reducing the size of the public sector and monopolistic tendencies; and assisting the Bumiputera entrepreneurship.
As for the next development, the government published the Privatisation Master Plan (PMP) in 1991 to expedite the transfer of public assets to private ownership.
According to the PMP, 37 projects were privatised by 1990, excluding the 30 government companies that were divested to Permodalan Nasional Bhd and other 120 companies sold to the private sector before 1983.
Based on the Economic Planning Unit report, the Bumiputera stakes in local companies increased to 25.6% from 21.7% as a result of the privatisation of 203 companies between 1983 and 2000.
Economist Prof Dr Rajah Rasiah from Universiti Malaya said the initial implementation of MI1.0 was executed in a broad-brush manner despite its success in encouraging the private sector.
“The earlier MI1.0 to me was like having a broad-sweeping or broad-brush approach of how the management take place in the different sectors of the economy.
“In some areas, the corporatisation was a useful thing to deal with but in other areas, it was not the way to go such as running universities,” he told The Malaysian Reserve recently.
He added that the government should outline the plan and the intended result that the government would like to achieve.
“The first attempt of MI1.0 had even encouraged the movement of civil staff to the private sector.
“Most importantly, we need to be sincere in improving our performances and we need to have a certain benchmark on whether we are heading where we need to go,” he said.
In reviving the concept, the academician said the government should establish an autonomous committee to plan the landscape of the new MI2.0 according to current economic condition.
“I hope that there is an autonomous team comprising experts, not necessarily from the government in power but from the different stages of administration.
“There should be enough autonomy in them to appraise and see whether the establishment of the concept is heading in the right direction.
“The most important thing is that they must have a rigorous and robust appraisal mechanism which goes beyond not just the bigger picture, but also at the individual aspects to rectify anything that is not doing well,” he said.
Rajah added that the revived concept should look into the degree of flexibility of companies in absorbing internal changes.
“The revived concept means that best practices are pursued. It is important that the capacity of those organisations is flexible enough to absorb the changes.
“Organisations sometimes overlap within the sector…sometimes they require some changes in the moment of crisis as opposed to the moment when they are doing well,” he added.