This article first appeared in The Edge Financial Daily on October 31, 2019 - November 6, 2019

KUALA LUMPUR: The divestment of assets by government-linked companies (GLCs) and government-linked investment companies is expected to lead to the creation of new oligarchs, where the wealth would be concentrated in the hands of a few “well-connected people”, according to the Institute for Democracy and Economic Affairs (IDEAS).

“Well-connected people are going get their hands on these assets,” the think tank’s senior fellow Professor Dr Edmund Terence Gomez told reporters yesterday, adding that this is the renewal of the old patronage system seen during the previous Barisan Nasional administration.

Once this wealth is transferred to the new oligarchs, it cannot be retrieved, he added.

Gomez also noted that Prime Minister Tun Dr Mahathir Mohamad has made it clear that these divestments would be made to bumiputera investors, and that the current government would use its race-based affirmative action, which he pointed out is against Pakatan Harapan’s manifesto, to justify these divestments.

But who are these bumiputera investors and how would they raise funds to acquire these assets, Gomez who was speaking at the launch of IDEAS’ GLC Monitor 2019: State of play since GE14 report, asked.

On that note, Gomez cited the potential sale of PLUS Malaysia Bhd to its prospective buyers, one of whom is Tan Sri Halim Saad. Halim, he noted, is closely linked to both Dr Mahathir and former finance minister and council of eminent persons, Tun Daim Zainuddin.

“All these companies, which were once in the hands of the government, are slowly being privatised. I am certain that more of these scenarios will take place in the near future,” said Gomez.

In essence, Gomez is of the view that there has not been any change to government interventions in the economy, adding that such interventions are still politically-based.

“The old institutional system has been reinforced with the shared prosperity vision to hide the truth about wealth and political power concentration in Malaysia,” said Gomez.