Khazanah MD urges bumi firms to move to consumer products, services sector

Bumiputera companies have been urged to participate in the demand side of the economy, especially in the consumer-driven product and services sectors, as government contracts and business constitute less than 15 percent of the economy.

Khazanah Nasional Bhd managing director Shahril Ridza Ridzuan said currently, government-linked companies and government-linked investment companies are only a small part of the economy.

“The Malaysian economy, like most economies, has evolved towards being a consumer and services demand-driven economy rather than an economy that is driven by government contracts and supplies, and I think that is where we should be looking at, and I believe it is the focus of the Shared Prosperity Vision (SPV) 2030,” he told reporters at the Khazanah Megatrends Forum 2019 in Kuala Lumpur today.

He made the remarks in response to the government’s effort to achieve 30 percent bumiputera equity ownership target under SPV 2030, which was launched on Saturday.

SPV 2030 is a blueprint to create wealth for the country that will benefit Malaysians from all walks of life amid the uncertain economic climate.

Shahril Ridza noted that currently, 85 percent of the Malaysian economy is about responding to external demand and internal consumer demand.

Meanwhile, on Plus Malaysia Bhd, he said it would be a “huge moral hazard” to put the country’s largest highway concessionaire in the hands of the private sector, stressing that the company is essentially a strategic asset for the country.

“It is an asset which, particularly, I think will be difficult to imagine in private hands, especially if a lot of the offers coming in are private entities who just want to acquire the asset at a cheap discount and still asking for the government to guarantee them. I think that is a huge moral hazard in having private entities to hold such a strategic asset with the backing of government guarantees.

“I think, basically, it is in line with the thought that it is a strategic asset and Plus’ highways should really remain in the ownership of the Malaysian people,” he added.

The government’s strategic arm, which owns a 51 percent stake in Plus, had reportedly rejected all takeover offers it received from local and foreign private entities.

- Bernama