Speech (Part 2) by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, at the opening of the Pengkalan Kota DAP Branch Annual General Meeting held at DAP Penang Hqrs, Kinta Lane on Monday, 16th March, 1992 at 8 pm.
The Foreign Investment Committee’s proposed new guidelines to regulate, foreign and local investments had not only caused the Malaysian stock exchange to nosedive in the first two weeks of March, but created uncertainty and anxiety among both foreign and local investors which could greatly dampen the investment climate in the country.
Even more serious, the proposed new guidelines of the Foreign Investment Committee (FIC) has raised the fundamental question as to whether it is the National Development Policy (NDP) adopted by Parliament in June last year or the Third Bumiputra Economic Congress resolutions and working papers which is the highest national policy in the country.
This is because the FIC’s proposed new guidelines were drafted not in line with the National Development Policy but in ac¬cordance with the Third Bumiputra Economic Congress decisions.
For instance, the NDP made it very clear from the outset that “while efforts will continue to be made under the NDP to increase Bumiputra ownership, no specific time frame has been set for the attainment
of the equity restructuring of at least 30 per cent. However, by the year 2000, a review of the achievement of this target will be made”.
The Finance Minister, Datuk Seri Anwar Ibrahim, publicly declared that “quantifying goals in a specific sense will not be necessary as it would be contradictory to pursue the traditional notion of the MEP in the context of present policies of liberalisa¬tion, deregulation and privatization”.
The Third Bumiputra Economic Congress, however, disagreed with the NDP and insisted on specific bumiputra corporate percentages.
In fact, the Third Bumiputra Economic Congress even went beyond the New Economic Policy.
For instance, under the NEP, the Gov¬ernment stressed that the 30 per cent bumiputra stake represented
a global figure, and not a micro figure which must be complied by every company.
The Third Bumiputra Economic Congress, however, demanded that the restructuring must not only be macro, but also micro at company level, especially in connection with the requirements’ of the Industrial Co-ordination Act and the Foreign Investment Committee.
Thus, in accordance with the Third Bumiputra Economic Congress and totally against the National Development Policy, the FIC’s draft new guidelines stipulate that companies which had complied with the 30 per cent bumiputra stake would be compelled to restore it to that level should there be subsequent dilution.
It is most unfair and inequitable to compel companies which had complied with the 30 per cent bumiputra stake to restore it to that level because bumiputras had sold their shareholdings allocated to them, as this will be a never-ending process.
The Government has broken its promise in the Second Outline Perspective Plan 1991-2000 presented
to Parliament in June last year that the Foreign Investment Committee will operate in a ‘liberal manner’, for its proposed new guidelines are even more illiberal compared to the New Economic Policy guidelines.
The MCA and Gerakan Ministers should raise this issue on a matter of urgency on Wednesday’s Cabinet and get a clear clarification and decision from the Cabinet as to which is the highest policy of the country whether it is the National Development Policy adopted by Parliament in June last year or the Third Bumiputra Economic Congress resolutions and working papers in January this year.
If it is the NDP which is the highest policy in the country, then the FIC should be instructed to withdraw its proposed new guide¬lines. If the Cabinet is not prepared to instruct the FIC to withdraw it proposed new guidelines, then the MCA and Gerakan Ministers should explain why they accept the Third Bumiputra Economic Congress resolu¬tions and working papers as a higher authority than the NDP adopted by Parliament itself.