I couldn’t believe my eyes. 

I rarely read the papers as it’s depressing.  But on occasion – this column, for instance – I must trawl for ideas, and you know what they say about beggars. 

And there it was. An item in Star Online, about the government contemplating an Act of Parliament to curb rent seeking. 

Imagine that! 

Do Malaysian business people know what rent seeking is? That’s like asking if the Ayatollah’s Muslim? They may not know its meaning, neither did they invent it, but they know the practice. In fact, they’ve taken it to Everest-like heights. Rent seeking is the practice of manipulating public policy or economic conditions as a strategy for increasing profits. 

Unfortunately, a pivotal public policy in Malaysia facilitates, nay, encourages such behaviour. 

Since 1971, the New Economic Policy has sought to uplift the country’s poorer Bumiputeras (indigenes and largely Malays) into economic parity with their richer countrymen. 

Where the Malay corporate and industrial community’s concerned, it’s taken various forms including quotas, licenses, permits, contracts, concessions, even outright grants. There isn’t any estimate, but many billions of taxpayer dollars would have been spent by now.   

They’ve been used to reshape industry. Take autos. In the 70s, it was dominated by the Chinese. The government decreed that approved permits (APs) would have to be obtained to import and sell cars in the country.

It created an effective monopoly. Cars became more expensive and the favoured few became very rich. 

One, so much so that he went into helicopters in a big way. At least, it demonstrated his entrepreneurial flair. 

The rest remain dependent on patronage and get outraged when their entitlement is threatened. 

Standout example: they weren’t happy campers when Tesla was recently allowed to import and sell its own cars without jumping through hoops – like having to go through an AP dealer, or Tesla having to sell some of its local equity to a Malay partner. 

The hoops, in the context of state protection from competition, are everything. 

Meanwhile, there are other items – from sugar and onions to flour and steel products – that require import licenses. It creates more “rents” – only selected businessmen need apply – and inflates prices.  

Under Dr Mahathir’s premiership, new rents were created and not necessarily for Bumiputeras.  At one point, the latest scheme for instant wealth creation were the licensing of independent power producers. 

IPPs bought subsidised gas from Petronas and, if its former chairman is to be believed, the national utility was “forced” to buy its output. 

Its obvious drawback –  whopping costs to the state-owned utility – was all but ignored in the flush of new wealth creation and an excited stock market.

As a former reporter, I used to think that some people were there just to dream up new RS schemes that would be NEP-compliant. The trick was to have a powerful, and sympathetic, ear in government.  

It was thus that I got a tip-off in 2003 that cigarette and beer firms would be forced to affix security labels on their products to “deter smuggling”.  

It wasn’t surprising. Cigarettes and beer are heavily taxed ergo smuggling is rampant. It still is. 

The firms are easy targets as they are foreign-owned and their products, generally frowned upon. Full disclosure: I like beer.

The tipoff was accurate.  I called the company, and they came back with the old “it’s the Swiss technology” chestnut.

A search revealed that the firm’s chairman was a brother of a (then) senior Umno minister. Smoking gun. We ran with the story in the Asian WSJ the next day and I waited expectantly. 

It went over with all the thrill of a wet sponge. Talk of vanishing into a vacuum! No outrage, no heated denials. Boredom, it seemed, was the order of the day.  

It was just another day in Paradise.  

ENDS