By Lee Wei Lian
KUALA LUMPUR, April 23 — The partial opening of Malaysia’s services sector scored bi-partisan backing today, but both Barisan Nasional (BN) and Pakatan Rakyat (PR) parties urged the government to promptly open up more sectors.
BN and PR parties also offered their respective wish-lists of sectors they wanted the government to consider lifting restrictions in.
Prime Minister Datuk Seri Najib Razak announced yesterday the lifting of the 30 per cent Bumiputera equity requirement for 27 sub-sectors in the services industry as part of Malaysia’s commitments to international trade agreements.
He said the government would also announce reforms to the financial sector next week.
The DAP today has welcomed the lifting of restrictions but warned the move would have little impact if it was not followed by further concrete action. The MCA called for the liberalisation of all sectors.
Tony Pua, the DAP’s publicity secretary, described the liberalisation as a “commendable baby step forward to demonstrate Datuk Seri Najib Razak’s commitment to unwinding some of the suffocating policies and regulations imposed and expanded under the pretext of the New Economic Policy (NEP)”.
“These policies have certainly resulted in a slower pace of foreign and local investment growth compared to our regional peers since the 1980s as they reduced the attractiveness of Malaysia as an investment destination,” he said.
The party today outlined three steps that it says will help ensure the liberalisation exercise succeeds.
First, it wants the liberalisation of more services sub-sectors and not just the 27 announced yesterday.
The DAP also wants the lifting of Bumiputera equity conditions for public listed companies and for government procurement contracts.
“Government agencies and government-linked companies (GLCs) are severely constrained by the Finance Ministry guidelines on procurement,” said Pua.
“They are only allowed to procure goods and services from companies which are registered with and possess approved classifications from the Finance Ministry based on strictly bumiputera ownership controls.”
He added that the persistent barriers to entry will continue to discourage investments in these sectors.
“Why would these investors consider setting up operations when they have no opportunity to offer the services to the Government and the GLCs, which combined, is the single largest consumer of services in Malaysia,” Pua points out.
MCA says that it hopes the liberalisation will be permanent and the quotas not re-invoked in the future and that there be no micro-structuring of any other sectors to compensate for the lifting of quotas in the services sector.
It listed nine sectors which it wants to see liberalised next, namely the property, defense and national security, utilities, government investment agencies, airports, publication and printing of recorded media, telecommunications, public transportation and conventional banking and financial institutions.
The prime minister, who is also finance minister, had promised further liberalisation and said that he will announce details of the liberalisation of the financial sector next week. According to MCA, only banks with Malaysian Islamic Financial Centre status have been liberalised.
“We have to bear in mind that the free enterprise approach spearheads equal opportunities and competitiveness by enabling participation from everyone,” says Datuk Wong Foon Meng, MCA’s secretary general.
“Hence, it would be in the national interest to fully liberalise every sector.”
Gerakan also urged further liberalisation measures on other sectors including financial, manufacturing and property.
Datuk Mah Siew Keong, Gerakan’s vice president, said Najib had taken the right step to be more liberal in his policies.