| Harakahdaily |
 PENANG, Aug 17: While UMNO, MCA and Perkasa were immersed in a debate sparked by MCA's call for the reduction of the 30% Bumiputera corporate equity, DAP secretary general Lim Guan Eng (pic) said setting up a royal commission of inquiry to determine how RM52 billion of Bumi and Malay shares were hijacked over the years could help enlighten the issue.“If the RM52 billion worth of Bumi shares still remained in Bumi hands, then the 30 per cent Bumi or Malay equity target under the NEP would have long been achieved," said Lim, the Penang chief minister. He said by shying away from accountability over the 'lost' RM52 billion in Bumi shares, the BN were using the NEP to divide and rule by playing up racial sentiments among Malaysians. "Clearly racial polemics over the NEP benefit the BN to distract attention from the real problems Malaysians face,” he stressed, adding that deep-seated corruption, inefficiency, abuse of power, mediocrity and lack of rule of law were the main problem facing the nation. In June last year, prime minister Najib Razak revealed that out of the RM54 billion shares allocated to Bumiputera since the introduction of the New Economic Policy in 1970, only RM2 billion remained in Bumiputera hands. The total Bumiputera equity was only 19.4 per cent, way below from the target of 30 per cent almost two decades ago. “Clearly the RM52 billion worth of shares given to the few Malay or Bumi leaders were cashed out and sold off. Stern action and the full force of the law should be unleashed at this open sabotage of the NEP,” said Lim. 'Monstrous hijack' Lim also questioned why MCA, UMNO and Perkasa were reluctant for an investigation into what he called a "monstrous" hijack of RM52 billion worth of Bumi shares and refused to support DAP’s call for a royal commission of inquiry to compel BN leaders who cashed out the shares. “In Parliament all BN MPs have refused to support DAP’s call for a royal commission of inquiry to act against these saboteurs and compel them to cough up and return RM 52 billion back to the government to be redistributed to poor Malays or Bumis,” he added. At the recent MCA Chinese Economic Congress, Najib’s brother, CIMB chief executive officer Nazir Razak, hit out the abuse of the NEP by Malay and Bumiputera businesses and urged Najib’s administration to review the affirmative action policy. Sparking a debate was a call by MCA president Dr Chua Soi Lek for a reduction of the 30 per cent Bumi equity as well as for implementation of the open tender system for government procurements. Lim described the continued refusal to take action against "these NEP saboteurs" as "an immoral act designed to protect their own cronies who have profited shamelessly from a policy that is supposed to assist the poor Malays". |
KUALA LUMPUR - Deputy Prime Minister Muhyiddin Yassin on Monday reminded MCA president Dr Chua Soi Lek not to make statements that can cause anger or are prejudicial to other races.
Government objective: Hear no evil, speak no evil
KUALA LUMPUR - Forget the cyber war that's brewing. A more profound war appears to be looming all of a sudden that involves allies in the ruling coalition - MCA and Umno.
By Teoh El Sen
BILLIONS of poor people who lack adequate access to healthcare and old-age security are posing a key challenge in developing countries that undertook drastic reforms and privatised social security systems at the behest of the World Bank.
A new report by the Washington-based Bretton Woods Project (BWP) says that the privatisation reforms, which were first launched more than three decades ago, are failing to benefit the majority. But national governments, pressed by local elites, multilateral agencies and global corporate and financial interests, have contributed significant public resources towards enacting the reforms.
What is more, despite having their images tarnished by the global financial crises, international corporate and financial interests are still pushing the increasing "financialisation" the expanding systemic power and scope of finance and financial markets and actors of people's lives in developing countries, says the report authored by Sheena Sumaria.
Social security systems matter as they can impact existing inequalities, and have the potential to transform society where markets are failing to do so. Private systems, in the hands of private finance, are embedded in existing social structures and serve to further marginalise the large numbers of those in poverty.
"This is especially important in todays globalising world in which inequalities between and within countries are widening, and ever increasing numbers of the worlds poor only have access to sporadic and informal employment," says Sumaria.
The author of the report goes on to say that the liberalisation of trade and the relocation of multilateral health corporations to developing country markets have contributed to the privatisation of health. Several US-based managed-care organisations have entered Latin America and Asia, seeking access to public social security funds.
Over the last three decades, finance has grown rapidly in terms of activities, markets, institutions and profits. By the end of 2008, the global insurance industry held US$18.7 trillion of funds under management, with global insurance premiums at US$4.3 trillion.
"Banks and insurance companies earn interest spreads, fees and commissions directly off worker health insurance and pensions contributions, including from the poorest layers of society," says the report's author Sumaria.
Case Studies
The report examines the role of private financial institutions in the reform process by considering two case studies: private pensions in Chile and private health insurance in Argentina. In 1981, Chile was the first country to push through private pension reform, serving as a model for other developing countries. However, many private pension fund management companies are in the hands of foreign financial conglomerates.
Chile's largest private pension manager, Provida, with US$36.1 billion under management, is owned by Spain's largest financial institution BBVA. Between 1981 and 2006, Chilean workers contributed approximately US$50 billion from their salaries towards the private pension schemes, of which private pension mangers and related insurance companies kept one third as commissions and profit.
In Argentina, says the report, the healthcare reforms enacted in the 1990s have also benefited financial corporations, who have extracted large profits and moved capital outside of the health system and the country.
According to professor Celia Iriart from the University of New Mexico, US-owned private health insurer Exxel Group, used high levels of debt to evade tax, transferred capital from Argentina to foreign private accounts by paying high interest on the junk bonds it issued, and drained government resources by keeping part of the revenue of public hospitals it was managing.
The report titled "Social insecurity The financialisation of healthcare and pensions in developing countries" notes with satisfaction that that problems arising from privatised models of health insurance and pensions have not gone completely unnoticed and those who have been adversely affected by such reforms in developing countries have engaged in public campaigns, protests and social movements.
For example in Egypt, several different civil society organisation and political parties are currently battling to stop the World Bank-supported privatisation of the health insurance system.
In El Salvador, the government's health privatisation reforms came to an end in 2003 after solidarity protests and strikes by health workers, doctors, unions and other civil society groups.
Although the private pension system still exists in Chile, in 2008, the country's then president Michelle Bachelet responded to a public campaign, and acted to restore a modest, tax-financed non-contributory public "solidarity" pension of US$150 a month to those with no pension entitlement.
Additionally, she established a supplement to AFP pensions that were lower than US$400 a month, recognising that even private pensions do not deliver to the majority of their customers. The global financial crisis further served to expose the fragility of the financial system, changing public opinion about the effectiveness of financial actors to deliver long-term benefits. The financial services industry, including many pension funds and health insurers have seen huge losses, wiping out the gains made in the "boom" years.
At the onset of the crisis, Argentinean president Christina Kirchner took the radical step of nationalising the pension system, which had been privatised 14 years earlier.
The state regained control over accumulated pensions savings, replacing the private administrators who had paid billions to their executives in salaries and bonuses, while at the same time making huge losses during the credit crunch.
As a result of the nationalisation, Argentineans are now entitled to pensions which are over two-thirds of their salaries representing in most cases, especially those of women, more than double the private pension entitlement.
Caution
Sumaria says: Although the financial crisis has stimulated debate on putting controls on finance, the strength and resilience of the financial sector should not be underestimated. The financial industry spent over US$3 billion lobbying the US Congress on the US Health Reform Bill, which in the end included several concessions for private insurers.
These include a provision which permits insurers to more than double charges to employees with high blood pressure, diabetes or other medical conditions. They also allow insurers to continue using marketing techniques to cherry-pick healthier enrolees.
The report adds: "Although government-funded Medicaid will be expanded to cover 16 million additional low income people, for other Americans who are not eligible for Medicare or Medicaid, they will be forced to take out insurance contracts with private health insurers. This represents an injection of billions of dollars to the very insurance industry responsible for the US healthcare crisis, and some of the same private health insurers which entered Latin American and developing country markets to expand profits."
Turning to developing countries, the report says that by advocating a reduction in the size of the public sector, the governments there are unable to provide decent social protection of their populations as those in the industrialised countries were able to do in the early twentieth century.
However, such prescriptions ignore the models of the newly industrialised countries in East Asia, where publicly administered social security schemes have enjoyed higher coverage rates and lower administrative costs than the privatised systems in Latin America.
Sumana pleads for more research on the role and impact of private financial institutions in the private pensions and health insurance sectors in developing countries, and argues that with many local private providers in the hands of global financial corporations, much of the capital provided by those covered by private schemes flows to foreign accounts and investments over which savers have no control.
Furthermore, the use of leverage and tax loopholes means that developing countries' governments lose out on a potential source of tax revenue. The lack of regulation and instability of the financial sector means that members of the private schemes are left vulnerable to the collapse of the firms or fluctuations in investment returns.
The author concludes: "While much of the agenda of the G20 and other global bodies has turned to financial re-regulation because of the financial crisis, this agenda is ignoring the need of developing countries, especially their poorest and most vulnerable citizens."
IDN-InDepthNews
KUALA LUMPUR, Aug 16 – DAP secretary-general Lim Guan Eng criticised the Barisan Nasional (BN) today for failing to act against those he claimed stole RM52 billion worth of Bumiputera shares from poor Malays.
