KUALA LUMPUR, June 29 — With only a couple of weeks before he completes his first 100 days in office, Datuk Seri Najib Razak hopes to score big with Malaysians and foreign investors with a slew of announcements on the economy and road toll charges.
By doing so, he wants to soften up a significant segment of constituents who remain wary of his credentials as a reformer and ambivalent about his performance as the prime minister of Malaysia.
Tomorrow, the Prime Minister is scheduled to announce major changes at the InvestMalaysia conference, signalling the end of the suffocating powers of the Foreign Investment Committee (FIC).
For a long time, the opaque operations of the all-powerful FIC — which has veto powers over commercial transactions — have been a point of contention with the business community and foreign investors.
Businessmen have argued that the hawks in the committee — a collection of senior civil servants — have discouraged the flow of investments into Malaysia, in the name of protecting Bumiputera shareholding in businesses.
Former Prime Minister Tun Abdullah Ahmad Badawi sought to dismantle the FIC and twice put the issue before the Cabinet last year.
On both occasions, the consensus among ministers was that the time to overhaul the FIC had not arrived and proposals were sent back to the drawing board.
After becoming the PM on April 3, Najib told government officials that he wanted to re-examine the need for the FIC, arguing that the climate of investment had to change in the country if Malaysia was to compete favourably with Vietnam, India, Indonesia and other emerging economies for foreign direct investments.
Government sources told The Malaysian Insider that the Cabinet was briefed on the plan to deregulate the FIC on Friday.
It is understood that the FIC will only have oversight powers where the dilution of Bumiputera equity is involved.
But in transactions where the seller of the equity is non-Malay or where the transaction is between foreigners, there will be no need for the parties to obtain the approval of the FIC.
There will also be a liberalisation of FIC rules on property ownership by foreigners.
In addition, the Najib administration is also considering setting up a RM10 billion National Equity Fund. The beneficiaries of the fund will be young Bumiputera companies.
Government officials told The Malaysian Insider that the plan is to identify new companies, take a stake in these entities, help them list on Bursa Malaysia and exit as a shareholder when good returns on the investment are realised.
It is unclear whether this method of nurturing a class of Bumiputera businessmen is going to be different from the discredited approach used in the 1990s to help create corporate captains like Tajudin Ramli and Halim Saad.
The corporate class then benefited from sweetheart deals and government largesse.
Their brittleness was exposed during the Asian Financial Crisis in 1997.
The fund is also an acknowledgement that Najib has to balance the liberalisation of the economy with a safety net for the Bumiputera community and a reaffirmation of a reality of doing business in Malaysia: that the interests of the Malay/Muslim community cannot be ignored by any prime minister.
Sources also said that Najib is likely to announce some good news for motorists, who have complained about toll charges and the increasing number of toll roads in urban centres.
The government is examining the possibility of giving frequent users of toll roads a discount.
It is unclear what mechanism is being considered or the quantum of the discount but the administration has been buffeted with requests from government backbenchers and Opposition politicians to alleviate the impact of toll charges on motorists.
Initially, government officials studied the possibility of taking over all the toll concessions but discarded this option when they realised that the cost of buying out the concession holders would be RM70 billion.
A more affordable option for the government is to lighten the burden felt by motorists who have to pay toll charges several times every day.
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