September 27, 2010
Kuala Lumpur. British billionaire Richard Branson said on Monday that Malaysia should split up and privatize large government-owned companies to increase competition and woo foreign investors.
Branson, whose Virgin Group is a shareholder in a Malaysia-based long-haul budget airline, also said political issues such as the sodomy trial of opposition leader Anwar Ibrahim had damaged Malaysia’s reputation among foreign investors.
“A lot of your companies are run by the government,” Branson told a business conference. “It will be better if you privatize, break up big companies into smaller companies for them to compete with each other.
“It will be better if Malaysia can be more liberal and open. It will attract more people to invest,” he said, when asked how Malaysia can lure foreign investment under an economic plan unveiled last week that seeks $444 billion of investments over the next decade to lift the country to developed nation status.
The Malaysian government retains an ownership interest in most key industries, which gives it the final say in corporate direction despite opening highways, telecommunications, electricity, airlines and automobiles to private investment since the 1980s.
Large government-linked companies are significant providers of essential services and employment, and account for more than a third of stock market capitalization.
Such corporations are also key beneficiaries of government contracts and privileges, drawing criticism of unfair playing field for others.
Budget airline AirAsia has long complained of unfair competition with national flag carrier Malaysia Airlines. Branson’s Virgin Group has a stake in AirAsia’s long-haul affiliate, AirAsia X.
Turning to politics, Branson said Anwar’s second sodomy trial was negative for Malaysia’s image with investors.
“This has gone on for a long, long time. It looks bad overseas. If you are a bold leader, you should get rid of things like that which damages your reputation,” he said, without elaborating.
Anwar, a former deputy prime minister, is on trial for sodomizing a former male aide.
He insists the government concocted the charge to sideline him after his opposition alliance made unprecedented gains in 2008 polls.
The government denies conspiring against Anwar.
He faces up to 20 years in prison if convicted of sodomy, a crime in Muslim-majority Malaysia. It is the second time Anwar has been accused of sodomy.
He was imprisoned for six years starting in 1998 for sodomy and corruption. The sodomy conviction was later overturned.
Human Rights Watch has urged Malaysia to drop the charges, condemning the case as a “charade of justice.”