The Prime Minister is seen giving his special address at the Permodalan Nasional Bhd Corporate Summit 2019 yesterday. — Bernama photo
KUALA LUMPUR: Government-linked investment companies (GLICs) and government-linked companies (GLCs) must focus on creating strong institutions, establishing the necessary infrastructure and supportive policies to fuel the nation’s growth, said the Prime Minister.
In doing so, Tun Dr Mahathir Mohamad said, it would become a catalyst that spurs the private sector and create a positive as well as a conducive environment that facilitates the country’s socio-economic development.
“GLCs must do their part in this endeavour to bring about tangible growth triggers for our nation, more so as business and commerce are changing at a breakneck speed in this new global environment,” he said in his special address at the Permodalan Nasional Bhd (PNB) Corporate Summit 2019 here yesterday.
Looking back at the height of Malaysia’s economic growth in the 1990s pre-1998 Asian financial crisis, the private sector according to him, was a core engine of the country’s success.
“As a result, over the ten years before 1998, the gross domestic product (GDP) growth was on a strong trajectory averaging at nine per cent,” he said.
He said there also existed an imbalance in public and private sector participation in corporate Malaysia today, which, if left unchecked, could prove detrimental to our nation’s future.
“We cannot cling to the current status quo. What will be an instrumental driver for the nation’s growth will be corporate Malaysia implementing its role as a market changer,” he said.
GLCs and GLICs said the Prime Minister has been important pillars of the country’s development but the global economy has changed significantly since they were first established.
“In this new world order, given the rapid pace of technological advancement and the increasing globalisation, if we remain stagnant, we will not be able to compete in the global economy,” he said.
He said with the growing emphasis on Industry 4.0 and digitalisation, businesses must be flexible and able to adapt and embrace these changes.
“The private sector is integral in adapting to this evolving landscape and to be well-positioned to confront the many ongoing challenges that are also on the horizon,” he said.
He said to build a solid and inclusive future for Malaysia, GLCs and GLICs must re-evaluate their level of participation in corporate Malaysia and recognise their synergies with the private sector, particularly towards empowering entrepreneurs.
“The expansion of the private sector is vital to spur growth by creating more opportunities for employment, enabling entrepreneurs to scale up their businesses and to bring in foreign direct investment to accelerate domestic growth,” he said.
He said this would contribute to overall growth that is accompanied by rising incomes and improvement in the quality of life including for lower-income groups.
Dr Mahathir said GLCs must also be able to co-exist in a space where they should compete on a level playing field.
“GLCs should not crowd out and directly compete with the private sector, especially in non-strategic businesses,” he said.
He said both the GLCs and private sector can, therefore, be the engine of growth provided they are highly productive and competitive.
“GLCs should, therefore, be professionally run and should not stifle private-sector competition. A competitive landscape will ensure healthy competition and efficient outcomes,” he said.
Meanwhile, Dr Mahathir has called for corporate Malaysia to play a bigger role in wealth and value creation.
“A part of this process, it is key to enhance productivity and talent development. For the former, there has to be greater leverage on technology and for the latter, the private sector and the GLCs need to support the existing education system,” he said.
He said also an important imperative is to empower entrepreneurs who will contribute to a dynamic private sector.
“We need to also strengthen our existing institutions to generate the kind of talent that both the private and public sector need,” he said.
With Southeast Asia primed to be a hub of economic growth and development, Malaysia at its heart, is in a much-coveted position, he said.
“Malaysia stands on an edge. We have an abundance of resources and prospects and our country is poised to embark on a new era of growth.
Therefore, Dr Mahathir said although Malaysia is a small nation in comparison to some, the country can leverage on these opportunities by building on strong fundamentals.
“While this is within our grasp, we are at a tipping point where we can either rise or falter,” said the Prime Minister.
Themed ‘Rebooting Corporate Malaysia’, the inaugural summit discusses important issues relevant to the corporate sector in particular on the issues that relate to the need for modernisation and transformation of the corporate sector. — Bernama