I refer to the malaysiakini report Bumi equity: Gov't retracts 36.6% figure .

Minister in the Prime Minister's Department Effendi Norwawi said, and I quote: 'The methodology (par value) used is recognised by international financial bodies, such as the World Bank, the International Monetary Fund and the Asian Development Bank'.

He is giving the impression that these international financial bodies are endorsing the usage of the par value methodology, giving the government's figure an air of independence, correctness and authority.

He has to be very clear and specific and not mislead the public on whether these international financial bodies recognise par value methodology for measuring:

the corporate ethnic composition, or

the corporate ethnic wealth/progress

Going by a simple example, say, A and B's par value and wealth composition is 50%:50% in the first year. A is awarded a big profitable contract for 10 years. By par value, the corporate composition of A and B is still 50%:50% in the 10th year. But in terms of wealth and progress, A is ahead of B.

The usage of par value methodology to measure the corporate ethnic composition at a given point of time is acceptable. However, once you start to compare two time frames like in the above example and try to interpret the results, you have to be extra careful.

On the other hand, you can never measure corporate ethnic wealth and progress by using par value as shown in the above simple example. Not even the World Bank, the International Monetary Fund, the Asian Development Bank or any layman can endorse that!

What is relevant here is ethnic wealth/progress and not the ethnic composition.

These international financial bodies may well have recognised par value methodology only for the measurement of corporate ethnic composition. They may not have known the uniqueness of this country at the time advice was being given and that the ruling administration of the day intended to use (or misuse) the same methodology for setting a 30% bumiputera equity target where there is no parallel anywhere in the world.

Don't the international financial bodies know they will look silly by endorsing two static par values between two time-frames as measurement of wealth and progress?

Unless Effendi Norwawi can give the public a written confirmation from these international financial bodies stating par value methodology is suitable for measuring ethnic wealth/progress without reservation, he should not smear the good name and reputation of the World Bank, the International Monetary Fund, the Asian Development Bank by associating them with his own nefarious agenda.

These international financial bodies could do well to protect their good reputation and disassociate themselves from the Malaysian government's claim that they endorse the par value methodology for measuring wealth and progress.