The Government's Role in Business SRI examines ways to improve liquidity in the capital markets and to avoid crowding out the private sector.
This is critical to ensure that there is a vibrant and competitive private-sector led economy in Malaysia. Therefore it is critical to provide clarity on what is Government's exact role in business.
Firstly, there needs to be a separation in regulatory and business functions and we have to address both reality and perception. This is essential to avoid conflict of interests and to encourage a level-playing field. Recognising the importance of strong and independent regulators, the government will conduct a review to ensure that steps are taken to create a clear separation of roles and functions.
The government will continue to be involved in business but for the right and legitimate reasons. It will play a facilitative role when private sector needs co-investment in a project that is GNI positive for the nation. It will participate in businesses that will be domestically based for the interests of national security. The government is also willing to invest in large growth capital, catalytic or new technology and national infrastructure projects. It is these criteria that will drive the decisions on whether or not decisions will be made to the effect of participating in business. What is necessary is that exit criteria will be established for each investment to serve as the government's trigger point to divest.
The government has identified 24* companies that are ready for divestment either through a stake pare-down, listing or outright sale. Each of these 24* companies is at different stages of preparation for divestment and will be announced over the course of the year.
*As of 8 July 2011
Key outputs that can be expected from the government's involvement in business
- Separation of regulatory from business roles
- Situations for government involvement in business
- White room to cover privatisation/ divestment
- Monitoring the universe
- Management of divestment proceeds
GLICs that are involved within the SRI
- Federal GLICs with investment mandates
Firms such as Ekuinas, 1MDB, Khazanah, MavCap, which act as fund managers and investment corporations for the government.
- Trust Funds
The EPF (Employee Provident Fund), PNB (Permodalan Nasional Berhad), LTH (Lembaga Tabung Haji) and other government-linked trust funds.
- Ministry Incorporated Companies
MKD, University Investment Companies such as UKM Holdings, USains Holdings.
- State Incorporated Companies
Johor Corporation, State SEDCs such as PKNS, PKNPk.