If Malaysia's financial and capital markets are opened to foreign firms, then a body should be set up to monitor the selection and regulate the entry of these players, said PAS vice-president Mustafa Ali.

At a press conference yesterday to announce the findings of the Barisan Alternatif's analysis of Budget 2005, Mustafa said the body should also look into possible adverse influences that such companies could have on Malaysia's ability to set its economic direction.

Premier Abdullah Ahmad Badawi had proposed last Friday that up to five leading global fund managers would be allowed to operate in Malaysia so that they can "bolster the distribution network" as well as increase liquidity.

PAS Negri Sembilan Commissioner Dr Rosli Yacob said he was not against the principle of opening up the market to foreign players, but urged that their entry be subjected to careful scrutiny.

"As a policy it is not a problem. Positive and negative impacts will always exist. What is needed is careful selection and regulation the players being brought in," said Rosli.

"(The government) has to play a role so that the issuance of these licences is regulated in the best possible way."

Rosli was addressing the concerns of PAS central committee member Mahfuz Omar who had expressed concern that such large financial institutions could influence Malaysia's economic self-determination.

"What will be the extent of their impact? Does it mean that eventually we will have to submit to their will through their participation in our capital market?" he asked.

Mahfuz said the government should strategise so that Malaysia does not end up in the same situation as Indonesia, where financial institutions are under the indirect control of the International Monetary Fund.

Parti Keadilan Rakyat secretary-general Abdul Rahman Othman said inviting large stockbroking companies would result in local firms being sidelined, when they have been traditional sources of capital.

"Five is too many. If you want to liberalise (the capital market) with the intention of fostering competition with local companies, two licences are enough (for foreign players).

"But bringing in five from outside will sideline the chances of the local companies in making available investment funds."

Poverty issues

The BA leaders further drew attention to the Poverty Line Index (PLI) which has served as the basis of the government's efforts to eliminate poverty. PLI is an income-based yardstick to determine the percentage of families and individuals living in poverty.

Mustafa said the PLI is obsolete, as inflation has significantly affected the amount previously considered sufficient to cover basic necessities (RM510 a month in Peninsular Malaysia, RM685 in Sabah and RM 584 in Sarawak).

"The 52,900 poor households involving some 300,000 family members (as given in the budget speech) is understated because the government is using a poverty line that is outdated," he said.

He said state religious departments are using the threshold of RM1,000 to determine the number of families below the poverty line, in which case the number of households considered "poor" would be no less than 100,000.

"This is a high number. If this (measurement) is used, it is estimated that there are 600,000 - 700,000 poor household members."

The BA was also unhappy with the "imbalance in development" between Malays and non-Malays, between rural and urban areas, between the east and west coasts, as well as between social development and physical development.