30% bumi quota for 27 subsectors scrapped

(the Edge) PUTRAJAYA: The government has removed the 30% bumiputera equity requirement for the 27 services sub-sectors with immediate effect in line with the Asean trade liberalisation and efforts to boost the services sector.

Datuk Seri Najib Razak said on April 22 the sub-sectors covered health and social services, tourism services, transport services, business services and computer and related services.

“There will be no more 30% bumiputera equity requirement for these sub-sectors,” he said at a press conference at the Prime Minister’s office.

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Visited a few popular sites like The Malaysian Insider, Malaysia Kini, etc....but there have been no comment or nasty comment yet. Not sure whether silence is a sign of approval? That is understable because if you applaud, you may be blasted for supporting Najib. If you make negative comment, you are biting your own tongue for being unfair since he is doing something to walk the talk - One Malaysia.

The sub-sectors are mostly for small businesses which is a non-event, either majority of them already dominated by bumi or if you have non-bumi running these busineses, most of their bumi partners are passive partner anyway? So, it is technicality that we are talking about here, non-event really. Or none of these sectors affecting powerful elites ?

I don't think foreigners are keen to compete in these sub-sectors anyway. The sectors that they want more access are labelled as politcally sensitive(what the heck is that???)

(WSJ) Mr. Najib Wednesday told reporters in Malaysia's administrative capital Putrajaya that foreigners investing in parts of the service sector would no longer be required to take ethnic-Malay partners, who currently must own 30% of any joint venture. The newly opened sectors include health, tourism, and business and technology services, but don't include areas in which there is heavy state-involvement or which are politically sensitive, such as air travel, utilities and retail, where companies such as France's Carrefour SA and Britain's Tesco PLC have pushed for more access.

This was what he said last month:

(Reuters-March 12)Deputy Prime Minister Najib Razak, who is slated to become premier on March 31, told the Financial Times that Malaysia could embrace some reforms such as liberalising the services sector but was not able to dismantle policies favouring ethnic Malays.

“We cannot have too drastic a move until people are ready for it,” Najib said in an interview published on Thursday

.

http://in.reuters.com/article/asiaCompanyAndMarkets/idINKLR48544520090312

Surprisingly, foreigners make more positive remarks:

(WSJ)Singapore-based HSBC economist Robert Prior-Wandesforde predicts Malaysia's economy – the third most open in Asia – will contract 3.5% this year, leaving the country's leaders scrambling for ways to give the country a short-term boost and prepare the ground for a sustained recovery when the global economic climate improves.

"This is an area where investors have been looking for a change for a long time. There might not be an immediate effect – there's not a lot of investment anywhere – but over time it will help," said Mr. Prior-Wandesforde, who forecasts Malaysia's economy will rebound strongly and grow 5.5% in 2010.

http://online.wsj.com/article/SB124040220273943253.html?mod=googlenews_wsj

It's a short-term steroid and don't hope for meaningful structural shift yet.