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Najib, Ismail Sabri believe they can defy gravity

COMMENT Rural and Regional Development Minister Ismail Sabri Yaakob is from Pahang and is one of Prime Minister Najib Abdul Razak’s most loyal lieutenants.

Based on Ismail Sabri’s recent actions, I expected him to be moved higher and closer to the centre of power. He defends his boss with enthusiasm, as only a true follower can. He has endless ideas on how to convince unsuspecting Malays and bumiputeras that he is doing everything he can for them.

Look at his inspiration to create digital malls for bumiputera retailers and traders only. The first one, initially known as Low Yat 2, has just opened at a Mara building in Kuala Lumpur.

The minister was apparently convinced that the ugly fracas at Low Yat Plaza stemmed from a lack of business premises for bumiputeras. Maybe he surmised that Chinese landlords and mall owners deliberately hiked up rentals for Malays or didn’t give any discounts to them. They were therefore unfairly denied places in these premises, which in turn made them angry and violent.

The police’s version of the incident, however, showed it had nothing to do with a lack of business opportunities. This is the type of thing that can happen anywhere when people interact badly with one another. But the minister does not think so.

Is this bumiputera-only digital and electronic business centre a good idea to start with? I am blogging about this because I read that the minister is going to launch more of these computer/handphone malls for bumiputera nationwide.

I would suggest to the minister to go slowly. He should wait and see if the Low Yat 2 experiment is successful. There is no need to launch a grand plan that is doomed to fall flat on its face, as many of these politically-inspired business models do.

By that I mean let’s first see if the Malay traders will make money in Low Yat 2 (now officially known as Medan Mara Digital Mall). We will only be able tell when they actually start paying rent for their premises, which kicks in six months from now. We can only say the business model works if they’re paying unsubsidised rental and making profits.

The minister must know that the margin for these products is small, and that you need sales volume to do well. He must also know that the wholesalers for these products are mainly Chinese anyway, and so Malays selling at the end of the value chain don’t have much to play with as far as prices go.

They will only make money if rentals are free or subsidised. Is the minister willing to use Mara’s money (which is of course taxpayers’ money) to subsidise the rentals to make his bumi-only retail centre a success?

The project will surely fail in the long run. Malay buyers (mostly the young generation) will not find the prices there to be any cheaper, and neither will they be as willing to go to the Mara building where this new digital mall is located. It’s not as “happening” as the ordinary malls. Young people of both sexes like going to places where they can watch people go by, which is not how anyone would describe this or any other Mara building.

Only grand on the surface

But the prime minister is ecstatic whenever his ministers show such initiative; never mind that they are only grand on the surface and ultimately achieve zero results. Look at the government’s announcement that it would provide affordable homes for 500,000 Malaysians.

I doubt whether they have since been able to complete even 10 percent of that target, or whether these homes are even affordable. Look at how Felda settlers were told that with Felda Global Ventures, they would all end up millionaires once their shares were listed in KLSE. They are now desperate just to pay the banks for the shares.

The first thing we need to tell our leaders is that the less we have of their hype for new ideas and policies - including for Malays - the better. The only way we are going to have genuinely successful Malay traders and retailers in the next 50 years is to first provide them with clever and capable leadership. Then they must have manufacturing capabilities so they can make products such as Malay-made smartphones (and not just the phone covers).

After that they need to learn to become wholesalers and distributors, for which they need business experience and huge capital. Only at the end of this food chain can we hope to find Malay retailers who can do business without subsidy.

Malays need a good attitude, good technical education, a competitive spirit and the desire to be successful. They must want to compete and succeed in Low Yat Plaza. Those running away to Low Yat 2 (and 3 and 4 and onwards) are failures before they have even started. They are being spoilt by their ministers, who are willing to create artificial and unsustainable business environments for the sake of instant glory and results.

Malays must know that it takes time to succeed. They must stop blaming others if things do not work. Only if they are in the top end of business can they help Malays at the lower end. There are no shortcuts.


ZAID IBRAHIM is former de facto law minister and former MP for Kota Baru.

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