PETALING JAYA: Although some reforms can take time, there are three institutional reforms that Prime Minister Najib Razak can push through without much difficulty, says a prominent economics professor.
At a forum on 1MDB, Universiti Malaya’s Edmund Terence Gomez said the three reforms – related to governance, administration and finance – could be carried out immediately – if there was the political will to do so.
Chief of these reforms, he said, was for Najib to relinquish the portfolio of finance minister, which he also holds, to avoid any conflict of interest.
Another reform, he said, was for government-linked companies (GLCs) and government-linked investment companies (GLICs) to be accountable to a separate body like a parliamentary select committee (PSC), rather than the finance minister.
This, he said, was something recommended by G25 – a group of former high-ranking civil servants.
Gomez added that the PSC should be led by a member of the opposition and not by a cabinet member or an MP from the ruling coalition.
“That’s how it is in most other countries. It’s a check and balance system in play. This is how it should be and these reforms aren’t difficult to put in place.”
In the past, Gomez has pointed out that the control of Malaysia’s corporate sector was concentrated in the hands of the finance minister.
He reached this conclusion after researching the control and ownership of seven federal GLICs, namely Minister of Finance Inc, Khazanah Nasional Bhd, Permodalan Nasional Bhd, Employees’ Provident Fund, Lembaga Tabung Angkatan Tentera, Lembaga Tabung Haji and Kumpulan Wang Persaraan.
According to Gomez, these seven GLICs control 35 of the top 100 listed companies in the country.
The third reform, Gomez said was for the directorships and management of GLCs and GLICs to be led by “independent and competent” individuals who should be “left alone” to do what they had to do.
“Following a revamp of the corporate sector after 1997, GLCs emerged as major players in the corporate sector,” he said at the forum organised by the Centre to Combat Corruption & Cronyism (C4).
“If you look at figures from 2001, among the top 10 companies, seven or eight of them were GLCs. Sixteen years on, if you look at the top 10 companies, seven or eight of them are still GLCs.”
He said this meant that the people who led the GLCs had to ensure the companies performed well and the people chosen to lead them were competent.
Gomez said such people were not political lackeys but likely doing what was required by the state to suit the state’s interests.
He said it was time the people pressured the government into bringing about these reforms.