Close down underperforming GLCs, say researchers

Two economists have called for underperforming government-linked companies that are not publicly listed to be closed down.

(FMT) – Policy centre chief Tricia Yeoh said thousands of these companies were not publicly listed but were completely or partially owned by government ministries.

“They are very poorly monitored and very loosely regulated,” she said. Many of them were not profitable and the government should shut down companies that continue to be in the red for consecutive years.

These “less efficient companies” should not qualify for government bailouts as the money could be put to better use

Putrajaya should consider banning GLCs from contributing to political parties, whether in cash or in kind, since these firms were very regularly used and depended on for political purposes.

Economist Edmund Terence Gomez said GLCs were created to serve a social function, particularly to rectify serious problems in society. But he claimed that the system had been corrupted by politicians, making everyone think that GLCs were bad.

He said the issue was among private GLCs and not listed ones, and called for a clean-up of the GLC system to close down “all these useless companies which are giving directorship appointments to people for patronage or to maintain support”.

However, there was a lack of political will to reform the system, he said, as GLCs were a boon for politicians which they could not afford to dispense with.

“They put their invested political interests before the nation, especially today when an election is around the corner and parties are so fragmented and divided on so many issues,” Gomez said.