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Do Bumi businesses need less government?
[Image: babadb2d-geoffrey-williams-columnist-new.jpg]

During the seventh Bumiputera Economic Congress, Bursa Malaysia chairman Abdul Wahid Omar revealed that only one of 97 new listed companies in the last three years was Bumiputera-owned.

Although this is a headline catcher, it is not really alarming because a large percentage of the 995 companies on Bursa Malaysia are Bumiputera-owned and managed, and 81.5% are shariah compliant.

In 2013, when Wahid was a minister, 60% of top management in listed companies were Bumiputera.

From an economics perspective, the ethnicity of ownership of listed companies is largely irrelevant to commercial performance or economic impact and will not in general predict good or bad businesses or management.

The main impact of ethnicity is via preferential schemes which exclude others. This is distributional, not additive, so increasing the number of Bumiputera-owned listed companies does not have much meaning in economic terms.

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