World Bank denies, Awang Adek 'forgets'
Malaysiakini.com
Nov 30, 2006
Beh Lih Yi

Deputy Finance Minister Dr Awang Adek Hussin disclosed a different version regarding the government’s methodology in calculating race-based equity ownership.

Early this month, he said it was wrong to label the official methodology of using par value to calculate equity ownership as unreliable since it was prepared with advice from the World Bank and international scholars.

However, malaysiakini yesterday reported the World Bank’s denial over this. It said the methodology was initiated by the Malaysian government. 

Quizzed on the denial today, Awang Adek replied: “When we do things, we don’t have to ask permission from anybody. It is not an issue that we have to ask some people when we want to calculate this (equity ownership).”

“The issue is whether the methodology was ever questioned by the international bodies,” he said when met at the Parliament lobby.

Asked if this meant he was denying his earlier statement, the deputy minister responded: “I don’t know what I said then.”

He emphasised that international bodies like the World Bank and International Monetary Fund have never questioned the government methodology.

Heated debates

On the same day he said the government had sought the advice of the World Bank on its methodology, Awang Adek also revealed that bumiputera shares on Bursa Malaysia hit 36.64 percent last year (exceeding the 30 percent target of equity ownership set under the New Economic Policy).

However, Minister in the Prime Minister’s Department Effendi Norwawi - who oversees the Economic Planning Unit (EPU) - retracted the figure six days later, saying it was “inaccurate”.

He also said the official methodology has been consistently used since the introduction of the NEP in 1970 and recognised by international bodies.

Economists argued that market value calculation - as opposed to par value - was a more accurate yardstick of equity ownership, but the government had disputed this.

There has been a heated debate over this issue when two separate studies showed that the NEP target has been surpassed.

Yesterday, Dr Lim Teck Ghee and Dr Edmund Terence Gomez, the two researchers who wrote a controversial report on equity ownership, described the government’s claim of having international backing for its methodology as “somewhat surprising”.

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