PH’s new AP system won’t help Bumiputeras, says economist

AP holders can import and sell reconditioned vehicles in Malaysia. (Bernama pic)

PETALING JAYA: Putrajaya’s decision to bring 36 approved permit (AP) holders under its new Open AP policy is not the right way to help Bumiputeras, says an academic.

Barjoyai Bardai of Universiti Tun Abdul Razak questioned the excuse of helping Bumiputeras in continuing the AP system, saying there is no clear indication of how it would benefit the community.

Barjoyai said AP holders do not hire many employees.

AP holders are given the permit to import and sell reconditioned vehicles in Malaysia.

Previously, the International Trade and Industry Ministry (Miti) confirmed that 36 new Bumiputera companies were appointed as AP holders with stringent conditions attached to its new Open AP policy.

These include, among others, that their business must be 100% Bumiputera-owned with a paid-up capital of at least RM1 million, and have at least two years of experience in selling and distributing vehicles.

“If the government wants to help Bumiputeras through the AP system, it should set up a foundation to manage the APs and the profits can be used to raise funds,” said Barjoyai.

“The foundation can then channel the money earned to sponsoring education to the B40 or giving out short term student or entrepreneurial loans.”

He said this was better than giving APs to a select few.

Another economist, Firdaos Rosli from the Institute of Strategic and International Studies (Isis), said Putrajaya should clearly define the plans in the National Automotive Policy (NAP), which the previous administration had failed to do.

“In preparing for the new NAP, consultation with stakeholders should involve consumer associations as well, not just among those in the automotive industry.

“At the end of the day, any unintended consequences such as higher prices of cars to lesser choices of vehicles will fall on the consumers,” said Firdaos.

He said that the application of APs is inconsistent with the World Trade Organisation rules and the way forward was to transition APs towards a sales-driven format instead of an import-driven format.

“Go back to basics and get AP holders to sell the exact cars they import. Make audit reports available to the public for a proper check and balance,” he said.

Former Johor DAP chief Dr Boo Cheng Hau meanwhile said the AP system does not nurture competitive entrepreneurs.

He said APs should be given through open tender, something the Pakatan Harapan government has been promoting.

“Open tender for APs can also be seen as a temporary transition measure to move towards a free and competitive automotive market,” he said, adding that APs should eventually be abolished and replaced with import tax adjustments.

“That would create a competitive local market, stimulate innovation in the local automotive industry, and a more market-driven economy,” said Boo.