Zahid's land corporation proposal is insidious, unfeasible

 

One proposal announced by no less than Deputy Prime Minister Ahmad Zahid Hamidi went relatively unnoticed at the recently concluded 

Anwar quietly approved this proposal to rob off the wealth of the hard working citizen especially the Chinese to be given freely to Bumiputra.

Bumiputra Economic Congress (BEC), where a slew of proposals for helping well-off bumiputra was unveiled.

It could be the most insidious and the one that is most patently unfair to other Malaysian citizens from whom part of their land would be taken away upon the renewal or even extension of leases.

According to Zahid, who is also the rural and regional development minister, the government plans to set up a Bumiputra Land Corporation (Perbadanan Tanah Bumiputra) to preserve land ownership, as part of an effort to strengthen the community by boosting its land ownership.

According to a report quoting Zahid, if the lease size exceeds 50 acres (20.23ha) for agricultural land or 20 acres for industrial use, the proposal calls for 20 percent of the land to be handed back to the government upon lease renewal or extension.

"The creation of a Bumiputra Land Corporation would signify a proactive measure aimed at ensuring a balanced racial demographic sustaining bumiputra businesses in agriculture, industry, and new settlements and preserving bumiputra ownership" he said.

Zahid envisaged that the returned portion of land would be then overseen by the corporation.

"I am confident that this initiative holds the potential to yield substantial returns and significant opportunities for bumiputra to posses a stake in the nation's land assets" he added.

Tremendous implications

One hopes that this badly conceived scheme is still at the proposal stage and will not see the light of day.  The implications are tremendous.  Note that all agricultural land above acres will come under this and 30 acres for industrial land.

If you had a small plantation of 50 acres growing oil palm for instance, and if you were non-bumiputra (I'm assuming this stipulation does not apply to bumiputra companies) you have to give up 10 acres upon lease renewal or even a mere extension.

That means you will lose too the yearly output that you get because the area planted will be reduced by 10 acres.  The amount of fresh fruit bunches decreases by 20 percent and so will your revenue.  Profit may decrease even more than that because of loss of economies of scale.

Let's say down the road you have an oil palm mill, logistics centre and office premises amounting to 20 acres, you suddenly have to carve out four acres for allocation to the Bumiputra Land Corporation.

Presumably, the corporation will hand it over to a privileged bumiputra who can then sell it back to the original lessor for a huge premium.  What a quick and easy way to make money and for the government to hand out patronage to its own people.

It beats even approved permits and rivals that infamous 30 percent bumiputra equity stipulation.

Something like this could only have been conceived by an UMNO minister who will have the necessary audacity, the sense of entitlement and the complete lack of ethical behaviour to suggest such a one-sided deal.

Imagine the kind of havoc it will cause- factories, offices, plantations, food production etc. Right now, almost all leases are automatically renewed on the payment of a premium and business continuity is assured.

Let's take Malaysia's largest plantation - Sime Darby - which has estimated planted acreage of 730,000 acres in Malaysia. Sime Darby may not be considered a bumiputra company because of its diverse shareholders.

That would mean that it will eventually have to give up 20 percent of its plantations in Malaysia or 146,000 acres.  Using a very conservative estimate of RM10,000 per acre, that alone is worth RM1.46 billion.  Potentially, billions of ringgit of properties are involved across all businesses.

The result of this ill-considered move to surrender 20 percent of larger tracts of land upon lease renewal or extension is a huge business disruption and the abuse of allocation of land to privileged bumiputra, two things we really don't need.

Unless strictly necessary, leases are not normally terminated or withdrawn.  This practice ensures fairness to all landowners and assurance that businesses of all kinds have reasonable certainty that they can operate in a system which is fair, equitable and reasonable.

Why, the move could be even against the Federal Constitution that stipulates that everyone is treated equally under the law.  It implies that people cannot have their property taken away through any process and then redistributed to others.

Zahid's proposal should be nixed in the bud forthwith before it becomes a needless contentious and divisive issue.

P GUNASEGARAM says proposals should be vetted for fairness and feasibility before they are made public.

Taken from Malaysiakini columns.

A THIEF WILL ALWAYS REMAIN A THIEF TILL DEATH IS UPON HIM