‘BETR 1.0 did not fail’

PETALING JAYA: The Bumiputera Economic Transformation Roadmap (BETR 1.0), which ran between 2012 and 2017, is not a failure, according to Bumiputera Agenda Steering Unit (Teraju) senior director Megat Mohd Yatim, despite not being able to bridge the economic gap between bumiputras and non-bumiputras.
He said insufficient measures under the programme has led to the launch of the upgraded version of Bumiputera Economic Transformation Roadmap, dubbed BETR 2.0, next month.
Megat said BETR 2.0, which will span five to six years, is more of a fresh approach to realign the programme in a bid to amplify wealth creation among the bumiputras.
As such, BETR 2.0 will be a continuation of BETR 1.0, which has contributed over RM100 billion to the Malaysian economy over the past five years under its four flagship programmes including carve-out and compete, Dana Mudahcara, Skim Usahawan Permulaan Bumiputera and Program Syarikat Bumiputera Berprestasi Tinggi.
According to Megat, the five focus areas for BETR 2.0 are education and human capital, employment and income, corporate equity, entrepreneurship and non-financial assets.
Besides wealth creation, it also aims to increase bumiputra participation in the high valued added-sector and accelerate bumiputra companies growth.
However, he declined to give more details of BETR2.0, saying it will be revealed at the launch.
Speaking to a group interview yesterday, Megat highlighted that the bumiputra income in the private sector is still concentrated in the bottom 40 category, with a significant jump in the low income range of between RM1,000 and RM2,000.
In contrast, he said there was a drop in the high income range of above RM12,000.
Commenting on equity ownership, Megat said more efforts have to be put in order to achieve the 30% target as bumiputra-controlled listed companies only account for 23% of total market capitalisation on Bursa Malaysia.
A company is defined as bumiputra-controlled when the bumiputra shareholding is above 35%.
Still, he said if government-linked companies and bumiputra conglomerates were to be taken out, the market capitalisation of companies that are operated by bumiputra entrepreneurs is less than 5% of total market capitalisation.
Megat admitted that though it is not an easy task to boost bumiputra equity ownership given that RM40 billion worth of investment needs to be injected for every 1% increase in market capitalisation.
As for the non-listed segment, Megat highlighted that it is difficult for bumiputra firms to expand due to their relatively small-scale business operations.
“The under-capitalised condition will constrain their expansion. Also, their capital and leverage are not up to the level,” he explained.
In view of the major shift in the economic environment, including slowing global economy and the emergence of disruptive technologies, he warned that bumiputra firms could be left behind if they don’t better their proposition.
Teraju was set up in 2011 to act as the secretariat to the Bumiputera Agenda Action Council, established to set policies, strategic direction and review the progress and delivery of various programmes and initiatives pursuant to the bumiputra development agenda.