ALTHOUGH the 10-year government-linked companies (GLCs) Transformation Programme (2004-2014) yielded positive results for some of the prominent GLCs in the country, the Covid-19 pandemic has changed the operating landscape of GLCs and government-linked investment companies (GLICs), making Malaysia’s journey towards becoming a developed nation more difficult, says Datuk Seri Ismail Sabri Yaakob.

The Prime Minister had a special interview in conjunction with GLC Open Day 2022 held at the Kuala Lumpur Convention Centre from Friday to Sunday (March 11-13).

How can GLC/GLIC strengthen their role to deliver optimum impact to ensure the continuous well-being and inclusivity among the Malaysian Family?

First of all I would like to explain the concept of GLC/GLIC-whereby the government plays an active role in the country’s strategic assets - which is common in a lot of developed and developing nations. For Malaysia the concept of GLC/GLIC is important to ensure orderly economic development. GLCs and its controlling shareholders as well as GLICs are important components of the country’s economic structure.

Although privatisation was actively carried out a few decades ago, GLCs has remained as the main and strategic service provider for electricity, telecommunication, postal, airlines, airports, public transportation, water, sewerage, banking and financial services.

GLCs make up for about RM445bil in the capital market, commanding 25% of Bursa Malaysia’s market share. Secondly, although we have implemented the GLC Transformation Programme from 2004-2014, which entailed spelling out GLCs' mandate in the context of nation building and improving corporate governance among others, they have to become more agile especially in continuously improving and strengthening the role of GLC/GLIC to remain competitive.

This is important to ensure that GLC/GLIC are able to deliver an optimum impact in the country’s socio-economy, especially in the context of the post-Covid-19 new normal and the changing business landscape.

For example, by implementing government policies which will build the strength of sectors such as semiconductor, to become main contributors in the industries which are based on 4IR (Industrial Revolution 4.0) and new technologies. GLCs also play a role in helping the country attract investments in certain sectors such as industries that are centred around sustainable development, through its global networks.

Thirdly, we do not want GLC/GLIC, to only focus on output, but also outcome and results not only from the financial front, but also through continuous positive impact towards the business ecosystem, especially for the small, medium and micro enterprises (SMME) as well as society as a whole. The benefits of economic growth have to be distributed equitably to ensure sustainable and inclusive development among Keluarga Malaysia.

We have a lot of good initiatives, however, implementation can sometimes be an issue.How will the government ensure that the initiatives under GLC/GLIC will bear results, especially in bridging the gap in socio-economic sectors, post-Covid-19?

It cannot be denied that the Covid-19 pandemic has widened the gap between those who with the resources and those who do not, such as small and medium companies in the business sector or the B40 group compared to others. I have suggested to the Finance Minister to focus on efforts to bridge the income, wealth and digital gap which has become more significant due to the Covid-19 pandemic while drafting the Budget 2022.

For example, under Budget 2022, the government has allocated RM5bil under the "Jalinan GLC: Memperkasa PKS" (strengthening SME) initiative, to help SME entrepreneurs through advisory and financial support. Aside from that, GLC/GLIC have been given clear objectives or Key Performance Indicators (KPI), such as expediting payment to their respective vendors within 14 days of the date of the invoice. Budget 2022 has also estimated RM30bil investments from GLC in the renewable energy sector as well as the modernisation of the supply chain and 5G infrastructure. This will spur SMEs participation in these sectors. We are also prioritising the empowerment of bumiputras in the Budget 2022 by emphasising that 40% of local procurement by GLC/GLIC must be from bumiputra entrepreneurs.

There are some who are of the opinion that GLC/GLIC have commercial objectives which are not so “close” to the people. What is YAB PM’s comment?

This is an inaccurate opinion. As a matter of fact, for decades GLC/GLICs have carried out several initiatives which have benefited the people directly. GLC/GLICs have employed a workforce of 500,000 in this country. As for its indirect contribution, GLC/GLIC have also supported thousands of employees through its ecosystem comprising several private companies, of all sizes. The government is also offering the Malaysian Short-Term Employment Programme (MySTEP), under the JaminKerja initiative which was launched on Feb 19, whereby GLC/GLIC will offer jobs on a contract basis to graduates for up to 12 months to give them a chance to get working experience and exposure to the relevant industries.

In 2021, the government placed a total of 21,541 graduates in GLC/GLIC under the MySTEP program, exceeding the target of 15,000. Many of them were later retained as permanent employees once their MySTEP stint was over. This year, MySTEP is targeting placements for 30,000 jobs in GLC/GLIC. This will also contribute to the government’s target to create 600,000 job opportunities for Malaysians, and will also reduce the unemployment rate to less than 4% by the end of this year.

It is clear that GLC/GLIC are very important for the country’s economic ecosystem. What is YAB PM’s suggestion towards GLC/GLIC on their social responsibility?

Yes, social responsibility is one of the ways for GLCs to get closer to the people. For your information, GLC/GLIC have set up a Disaster Response Network (GDRN) in 2013. Its main objective is to coordinate social aid and rebuilding efforts especially for communities affected by any catastrophe. It is now jointly managed by Yayasan Hasanah and Yayasan TM. Contributions from several GLCs and GLICs will be coordinated by non-governmental organisations (NGO), so that the resources can be optimised to benefit more people who are in need of aid, especially since the Covid-19 pandemic started in 2020. I was made to understand that GDRN is still actively helping Nadma and the Social Welfare Department to handle the unusual floods since December 2021. If it is possible, we want continuous coordination and cooperation through the GDRN platform as this is the core concept of the Malaysian Family. Looking ahead, I believe GDRN will not only become a responsive network, but also more proactive in channelling aid to the members of the Malaysian Family who are in need. I am aware that all GLC/GLIC have their own social responsibility in the areas of education, environmental sustainability and others. However, it will be better if these efforts are streamlined under GDRN. In terms of results, all this will prevent the individual efforts of GLC/GLIC from overlapping and improve efficiency in resource allocation. We will be able to collect data to ensure that no one from the Malaysian Family will be left out from receiving aid and living a meaningful life, if there is a single platform to streamline the efforts. This will also indirectly create transparency in programs organised by GLC/GLIC and ensure that it yields the desired results in terms of social impact.

On March 11, 2022 YAB PM launched the GLC Open Day to give Keluarga Malaysia a closer look and experience with GLC and GLIC. Therefore, members of Keluarga Malaysia would like to know how GLCs and GLICs can contribute to economic recovery and serve as a catalyst for growth?

In my opinion, the efforts channeled by GLCs and GLICs will be based on the three main focuses of the Budget 2022 that is the Malaysian Family , business and economy. For the first focus, GLCs and GLICs will have to work closely with the government to help the Malaysian Family recover in terms of their income, jobs as well as improvement of public health. GLCs are committed to provide 30,000 job opportunities this year through the JaminKerja initiative. Through the new GDRN, GLCs and GLICs will contribute to the improvement of the quality of education and public health especially for groups who are in need. The second focus will be on returning the strength and competitive advantage of businesses through several initiatives such as business funding and support for SMME including entrepreneurs and bumiputera companies, through the GLC and GLIC ecosystem. This includes the RM5bil Jalinan GLC: Memperkasa SME initiatives for SMME entrepreneurs.

Apart from that, GLCs will also support SMMEs. As the country’s borders are set to reopen on April 1, 2022, I am sure it will invigorate the economy and not only help GLCs and GLICs but also aid the growth of companies linked to. GLCs and GLICs should also prioritise on the third focus which is to invigorate sustainable economic recovery and bridge the economic gap through the empowerment of community as well as projects which are sustainable, spur development and provide digital access.

GLCs and GLICs will support the aspiration of the government for holistic economic development and recovery in the short, medium and long term.

What is YAB PM’s aspiration for the direction of GLC/GLIC for economic recovery and growth which will contribute to the people and the country’s prosperity?

In 2021, the government, via the Finance Ministry, introduced an initiative to strengthen the role and capabilities of GLCs and GLICs in Malaysia, especially in terms of the operating landscape which has quickly changed following the Covid-19 pandemic. The reorganisation/ restructure of functions and roles of GLC/GLIC has been carried out actively since September 2021. God willing, it can invigorate a change by rebuilding the country’s economy in phases, so that the socio-economic benefits will be inclusive and achieved by all members of the Malaysian Family .

The targets of the initiative include restructuring entities within GLC/GLIC to optimise the government’s fiscal resources, improving management, hitting targets, spurring new growth through strategic sectors and invigorating investments in the sustainable industry. Another pressing need following the impact of Covid-19 is the restructuring of the social security system. The government has also started relevant projects such as setting up an integrated ecosystem to explore digital based industries, 4IR and 5G.

Khazanah Nasional has also set up the RM6bil Impact Fund which will run for five years. The fund aims to help Malaysia maintain its competitive edge in the global stage, develop climate endurance, ensure food and energy security, job opportunities and ensure quality health and education services and build a digital and technologically savvy society. God willing, I am sure with the joint efforts between the government, GLC/GLICs, the private sector and NGOs, I am sure will be able to overcome the impact of the pandemic and rebuild a prosperous nation for the well-being of the Malaysian people.

Source: https://www.thestar.com.my/news/nation/2022/03/13/glcglics-role-in-making-malaysia-a-developed-nation