Financial clout in PM’s hands

  • Business
  • Monday, 30 Jul 2018

It seems like Azmin will be tasked to oversee agencies that are centred on bumiputra shareholding and wealth distribution.

PETALING JAYA: With the restructuring of government agencies presently under way, it is now becoming clearer that Datuk Seri Azmin Ali’s Economic Affairs Ministry will not be controlling the most important government agencies in the country.

Rather, the Prime Minister’s Office (PMO) will continue to retain a lot of direct influence as the three most important agencies – Khazanah Nasional Bhd, Permodalan Nasional Bhd (PNB) and Petroliam Nasional Bhd (Petronas) are likely to be under the PMO’s jurisdiction, according to sources.

The proposed structure would mean that while the Prime Minister is not the Finance Minister, he can influence the economic roadmap of the country via Khazanah, PNB and Petronas.

There are now also deliberations to dissolve the Minister of Finance Inc (MoF Inc).

This is not surprising considering the extraordinary power wielded by MoF Inc.

Under the previous government structure, the concentration of power was with the PMO, as the Prime Minister was also the Finance Minister, who in turn controls MoF Inc.

Through this arrangement, MoF Inc had a whole lot of control on the Malaysian economy.

It has more than 150 companies under its jurisdiction with direct major shareholdings in 68 companies. Khazanah, Petronas and PNB were under MoF Inc previously.

Considering the criticism Prime Minister Tun Dr Mahathir Mohamad has on Khazanah deviating from its original role of being a strategic investment fund and developing bumiputra entrepreneurs, it is perhaps not surprising why Khazanah will be placed under the PMO.

Khazanah was the brainchild of Tun Dr Mahathir Mohamad, who was also the strategic fund’s first chairman when it commenced operations in 1994.

In the early days, Khazanah played the role of a strategic investor.

It invested in sectors which the government wanted to develop, say, for example, the steel industry.

It would step in to invest as those companies involved would not be able to get bank loans on their own.

Then, when Tun Abdullah Ahmad Badawi became the prime minister in 2004, Khazanah’s role changed.

Its role has been more to help transform GLCs into becoming high-performing and commercially driven entities providing critical services to the public and private sectors.

Since then, Khazanah has become more of an investment holding company.

Interestingly under the restructuring, it seems that five economic and development corridors are also currently being studied for liquidation.

The five economic and development corridors under review are Iskandar Regional Development Authority (Irda), Northern Corridor Implementation Authority, East Coast Economic Region Development Council (ECERDC), Regional Corridor Development Board, and Sabah Economic Corridor Development and Investment Authority.

These corridors have secured investments worth billions of ringgit and created jobs for the locals in the respective states and regions.

For example, Irda is responsible for attracting investments into the Iskandar Malaysia region in Johor and has raised total committed investments of RM263.95bil since 2006.

Besides that, as of January this year, ECERDC’s investments had created 150,700 new jobs and 31,200 business opportunities in key economic sectors as well as small and medium enterprises.

Meanwhile, despite not overseeing GLCs, Azmin will still be in control of the powerful Economic Planning Unit (EPU) and Federal Land Development Authority, which were previously under the PMO.

It seems like Azmin will be tasked to oversee agencies that are centred on bumiputra shareholding and wealth distribution.

The EPU determines the short and long term development plans of the nation and allocates resources accordingly.

The EPU has been tasked to look into the review of the New Economic Policy to ensure that the NEP fulfills the needs of the people and the direction of socioeconomic development of Malaysia.

To name a few, the MEA shall spearhead agencies such as Felda Global Ventures Holdings Bhd, Ekuiti Nasional Bhd, Felcra Bhd, Bank Pembangunan Malaysia Bhd, the business arm of Mara, as well as the business and investment arm of Lembaga Tabung Haji.

MEA will also be in charge of MyHSR Corp Sdn Bhd, the firm responsible for the development and implementation of the high speed rail project.

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