The Malaysian Insider
January 18, 2016
By Tan Sri Ramon Navaratnam
Prime Minister Datuk Seri Najib Razak has rightly urged "more Chinese and Bumiputras to form business enterprises to take advantage of new opportunities", at the opening of the impressive Wisma Huazong today.
He was obviously referring to the vast business potentials in China. We could surely do more to work more closely with China on the new Silk Road and Belt projects. I suppose he would also later address the potential of doing joint businesses in the Indian sub-continent and in the Middle East as well.
And why not? After all our diverse society should be regarded as our strength, and certainly not our weakness. We have a comparative advantage in business and economics with our delightful diversity. Thus, our Bumi businessmen would also do well in working closely with Muslim countries!
But the prime minister, at Wisma Huazong, was focussing on how we could all work together to optimise our combined strength in our economic and business ties with China and also other countries.
As in other countries, by all "working together", we need all hands to clap. We need commitment all round.
How can Huazong help?
How could the Huazong help to achieve the PM's aspiration "to cultivate and promote the spirit of working together across the racial divide in this country"?
Huazong could form a working group of all major Malaysian businessmen, to seek ways and means of bringing them together, to establish 1Malaysia Joint Companies (1MJC), to do business in China.
For a start, Huazong could invite the government-linked companies (GLC), to "work together" and actively participate in the huge Silk Road and Belt Projects.
Government must lead with tax incentives
The government, however, has to lead with follow up action on the PM's useful proposal and he should not just sound theoretical and good to hear.
The PM could give a real boost to his proposal by initiating some tax incentives to form these proposed 1MJC, to do business in China and elsewhere.
Policies must be backed up by solid tax incentives to encourage actual implementation on the ground.
1MJC can achieve unity, progress with tax incentives
Indeed the government can help promote national unity and progress and help overcome the racial divide and some unproductive competition and protectionism, among the Malaysian races, by introducing more collaboration and cooperation instead, among our different racially based companies.
This would be in line with the basic second thrust of our economic policy, which aims to remove the identification of race with occupation.
These racially cooperative 1MJCs could be give a tax incentive of just about 5% to promote the PM's proposal for Chinese Malaysians and Bumiputras "to form business enterprises" for business in China and elsewhere too.
Indeed if this (1MJC) is promoted with reasonable tax incentives provided by the government, this whole new policy promoted by the PM will, I believe, take off sooner rather than later – and not fizzle out as many good proposals in the past.
A small tax incentive can bring in big results – so why not be innovative and think outside the box as we are always being told?
SMEs and big corporate can gain
The proposed 1MJC formula could also be addressed across the board, from all small medium enterprises (SMEs) right up to the big corporations and GLCs, for the full benefit of all businesses, and not only those dealing with China.
This would be an exciting policy approach which will benefit the economy especially in this time of economic slowdown and further promote the government's economic transformation.
It could also help us break out of the middle-income trap and move on faster, without the present unfair and unproductive racial competition for business and investment, both at home and abroad.
The proposed 1MJC would make Malaysia more competitive, particularly if the Trans-Pacific Partnership Agreement is signed.
Let us give more substance to the PM's challenging proposal, for the benefit of all businessmen and not only one group, in the interests of national unity and sustainable socio-economic development in the future.
View original article on The Malaysian Insider.
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