Wednesday, October 9, 2013

Average bumi won't benefit from ASB2 scheme

Average bumi won't benefit from ASB2 scheme

MP SPEAKS When Najib Abdul Razak first became prime minister, he promised national unity in the form of 1Malaysia and a New Economic Model (NEM) that preached needs-based economic intervention in favour of the bottom 40 percent of household income earners regardless of race.

Najib RazakThis signalled a departure from the race-based policies and was a clear indication that the way forward must include every Malaysian, especially those who most need help.

Unfortunately, Najib’s promises have all been undone with the launch of his Bumiputera Economic Empowerment Agenda (BEEA).

It entails a variety of race-based initiatives including:

- the setting up of a powerful Bumiputera Economic Empowerment Council;

- the creation of Bumiputera Development Units in every ministry;

- an assurance that major government-linked companies will increase Bumiputera vendor participation; and

- the launch of 10 billion units of Skim Amanah Saham Bumiputera 2 (ASB2) shares by Permodalan Nasional Bhd (PNB).

new economic policy nepWhile the NEM offered market liberalisation and needs-based affirmative action that would focus on narrowing the gap between the rich and poor, the BEEA appears to be a return to the New Economic Policy that has been proven to benefit mostly a select class of Umno-linked Malay capitalists at the expense of the poorer, unconnected masses.

This is made obvious by the fact that, despite four decades of supposed bumiputera-targeted assistance, the bottom 40 percent of bumiputera households today earn a measly average income of RM1,686 per month.

At the same time, the politically-connected rich are able to purchase RM7 million bungalows at a whim.

As such, the proposed launch of 10 billion ASB2 units is highly questionable. Who is set to benefit from more ASB shares made available?

Would the bottom 40 percent of bumiputera households be able to invest in these high-yielding shares considering that they hardly earn enough to get by?

Misleading figure

According to the PNB’s annual reports, the average investment of bumiputera investors stoods at RM14,097 per person at end 2012. At a glance, this appears to be a decent sum, suggesting that many Malays have attained significant savings.

However, upon closer inspection, this figure is misleading. When the numbers are broken down, it turns out that three-quarters of the bumiputera unit-holders actually have an average investment of a mere RM611 per person. It is only the top quartile who are able to invest heavily in the shares.

How then would the availability of more units benefit the average bumiputera, when they are unable to take advantage of even the current available ASB shares?

In fact, a study by economist Dr Muhammed Abdul Khalid has found that the disparity of wealth is massive, where the top 0.1 percent of bumiputera investors have an accumulated portfolio that is 1,526 times more than the bottom 80 percent combined.

Hence, the likelihood is that this elite group of bumiputeras will eventually reap the benefits of the additional 10 billion ASB2 units, rather than the common Malay who is able to invest only RM611 on average.

Who is the ASB2 really for? Certainly not the average bumiputera.

ZAIRIL KHIR JOHARI is the DAP’s member of parliament for Bukit Bendera.

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