‘New model needed to rev up Bumiputera economy’

‘New model needed to rev up Bumiputera economy’

KUALA LUMPUR: Nearly 64 years after attaining independence, Malaysia’s bumiputera agenda has yet to bear the desired results.

This is because poverty continues to haunt the biggest component of the nation’s population while bumiputera corporate equity ownership is still far below the government’s 30 percent target.

According to media reports, the incidence of poverty among the bumiputera stood at 7.2 percent as of 2019, compared with 1.4 percent (Chinese) and 4.8 percent (Indians).

As for bumiputera equity ownership, it stood at 16.2 percent in 2020 compared with 23 percent in 2011 and 19.3 percent in 1990.

Addressing the widening economic disparity may be a huge challenge for the government as Malaysia readies itself to face the post-Covid-19 era because the pandemic has had detrimental effects on bumiputera economy and incomes.

To change the existing economic landscape, a new and more effective model will have to be introduced to look into developing the economic might of the bumiputera community, stressed Universiti Putra Malaysia School of Business and Economics lecturer Associate Prof Dr Anuar Shah Bali Mahomed.

He told Bernama what is required now is the immediate implementation of a comprehensive strategic plan that covers all aspects of the bumiputera agenda, especially the part involving increasing their equity which has dropped drastically over the last decade.

“Just imagine, in (the last) 10 years, bumiputera equity has reduced by 6.8 percent… we expect the figure to drop (further) in view of the COVID-19 crisis we are grappling with now,” he said, adding that if comprehensive efforts are not taken, the government may find it difficult to realise its aspirations of upping bumiputera equity ownership to 30 percent by 2030.

Revigorate bumiputera agenda

Looking at the current situation, there is a need to revigorate the bumiputera agenda in stages to ensure greater bumiputera participation in all fields.

The establishment of the Bumiputera Prosperity Council, chaired by Prime Minister Tan Sri Muhyiddin Yassin, last year to address bumiputera socio-economic issues is among the proactive measures taken to empower the community in line with the initiatives outlined under the government’s Shared Prosperity Vision 2030.

Budget 2021 has also provided allocations totalling RM11.1 billion for bumiputera socio-economic development, an increase of 28 percent or RM3.1 billion from similar allocations provided in the previous Budget 2020.

Anuar Shah Bali said focus should be given to bumiputera participation in the digital economy which has the potential to generate lucrative incomes for the people.

In fact, in February this year, the government unveiled the Malaysia Digital Economy Blueprint (MyDigital) to set the direction of the digital economy and build the foundation to drive digitalisation across the nation.

MyDigital is expected to create 500,000 new job opportunities in the digital economy, which is expected to contribute to 22.6 percent of Malaysia’s gross domestic product (GDP) by 2030 and draw in domestic and international digital investments worth RM70 billion.

Empowering bumiputera savings

“The (digital) blueprint is expected to generate a higher number digital entrepreneurs who will contribute to the growth of our nation’s economy. It (MyDigital) is a high-impact initiative in view of the economic tsunami that is approaching us without us realising it,” added Anuar Shah Bali.

The findings of a survey by Zurich Insurance in January 2020 found that 38 percent of full-time workers in Malaysia were looking to enter the gig economy in the next 12 months, which was higher than the global average of 20 percent.

Urging bumiputera entrepreneurs to quickly respond to the government’s call to join the gig economy – which is part of the MyDigital blueprint – he said it will not only lead to higher earnings but also help to increase their equity ownership.

Senator Idris Ahmad, meanwhile, opined that enhancing bumiputera equity ownership is closely linked to institutions that handle bumiputera savings such as Permodalan Nasional Bhd (PNB) that handles Amanah Saham Bumiputera (ASB), and Lembaga Tabung Haji.

Providing high returns to them via dividend payouts can help them to increase their equity through investments, business ventures and purchase and ownership of properties.

Higher ASB or Tabung Haji dividends will provide more opportunities to the bumiputera to increase their equity ownership without touching their savings proper, he said, pointing out that ASB dividend payouts have decreased in quantum from 2017 to 2020.

In 2017, ASB announced an income distribution of 7.00 sen a unit and bonus of 1.25 sen a unit while in 2018, it reduced its income distribution to 6.50 sen a unit and bonus 0.50 sen a unit.

ASB’s income distribution dropped further to 5.00 sen a unit and bonus 0.50 sen a unit in 2019, and last year to 4.25 sen a unit and a special one-off “Ehsan” payment of 0.75 sen per unit for up to the first 30,000 units held by the unitholders.

Idris said the downtrend in dividend payout has caused bumiputera equity ownership to decline sharply from 23 percent in 2011 to only 16.2 percent last year.

“This means that there is a pressing need for the government to formulate a special strategy to empower PNB so that its income distribution (dividend and bonus) for 2021 can return to the previous levels of between 7.00 sen and 9.00 sen per unit,” he said.

Tabung Haji, meanwhile, had posted better returns with the distribution of profit to depositors at 3.10 percent in 2020 compared with 3.05 percent in 2019 and 1.25 percent in 2018.

Nevertheless, added Idris, the government must continue with its efforts to help Tabung Haji to enhance bumiputera savings and profit distribution for this year. – Bernama