KUALA LUMPUR: The Institute for Democracy and Economic Affairs (IDEAS) says the government has increased intervention in business rather than managing to reduce it. Its chief executive officer Wan Saiful Wan Jan argues that the government has done the exact opposite by increasing government involvement in business through acquisitions. According to the Performance Management and Delivery Unit (Pemandu) report in the Economic Transformation Programme’s (ETP) annual report for 2014, the government recorded a 100% achievement rate in its divestment exercises of government- linked companies (GLCs). “What we found was that in terms of divestment, the amount was RM29.5 billion but, in terms of acquisition, it totalled RM51.7 billion. This means the role of the government in business has doubled over the period of the last five years,” he told SunBiz in an interview. In a policy paper he wrote, Wan Saiful highlighted the increasing amount of government stakes and acquisitions that have been carried out, noting that these two factors have in fact offset the positive effects of the divestment. “Over the last few years, the government has implemented the promises it made in the New Economic Model (NEM) by selecting 33 companies and selling its shares in them. “At the same time, Ekuinas (set up by the government), the Employees Provident Fund and other government-linked investment companies (GLICs) are actively buying shares, turning purely private companies into ones partially owned by the government,” he said. According to the ETP, 33 companies were identified to be divested either through listing, paring down of stakes or outright sale. By December 2014, 32 of the targeted companies had been divested. The GLICs’ aggregate stake in 30 GLC stocks in the FBM KLCI was lowered to 24.7% in 2015 from 25.6% in 2011. Despite these figures, the paper analysed government shareholdings in listed companies from 2011 to 2015 and noted that the government’s share in the FBM KLCI increased from 43.7% to 47.1%, which indicates greater government control over the largest companies in Malaysia. Based on statistics on GLC disposal and investment exercises, Khazanah Nasional Bhd was the most systematic and aggressive in disposals, making up 60% of total divestments, while other firms “lacked rigour” in divesting their stakes. “When it comes to reducing its role in business, the government’s track record appears mixed,” Wan Saiful said. He pointed out that Pemandu, the government arm established to deliver the economic transformation agenda, which included reducing government intervention in business, has set up a consulting firm called the Big Fast Results Institute, which itself is a GLC. “I find it really ironic that the body tasked with pushing for the reduction of the government’s role in business has now become part of the problem they want to reduce,” he said. Wan Saiful stressed that the government should fully commit to the objectives outlined in the NEM to reduce state participation in the economy. “At the moment, commitment to the NEM seems to be very shaky; the government stopped at identifying only 33 GLCs to be divested when there should be more,” he said, adding that bigger companies like Petronas and Khazanah should be privatised.