Cabinet should move away from its opaque to an open and transparent  policy-making process by making public various options and scenarios being considered by Cabinet for the new national automotive policy to have benefit of public input by all stakeholders before final decision is made

Media Statement (2)
by Lim Kit Siang  

(Parliament, Thursday): The Cabinet should move away from its opaque to an open and transparent  policy-making process by making public various options and scenarios being considered by Cabinet for the new national automotive policy to have the benefit of public input by all stakeholders, whether the national car industry, motor assemblers, the automobile consumers or the ordinary taxpayers – before a final decision is made.

During the debate in Parliament on Tuesday on vehicle customs duties, I had drawn the attention of Parliament and government to the views of the former Proton CEO, Datuk Mohd Nadzmi Mohd Salleh, who had said in an exclusive interview with Nanyang Siang Pao the same day that over-protection by government to Proton in the past two decades  had caused Proton to miss many opportunities to enter into strategic alliances with international automobile corporations, resulting in many countries like Thailand which had started their automobile industry much later to achieve greater success than Malaysia.

Speaking on past strategic mistakes made by the government, Nadzmi disclosed that the leading American automobile maker General Motors had shown interest in acquiring a stake in Proton, but government overprotection had caused Proton to lose the opportunity to establish a strategic alliance with the world’s largest vehicle manufacturer.

General Motors later went into Thailand, and although Thailand started its automobile industry much later than Malaysia, our neighbour has achieved faster growth in the automobile industry  and ahead in its aspiration to become the “Detroit of the East” or the vehicle assembly and export hub of Southeast Asia.

Nadzmi contended that with the trend of local automobile industry heading towards greater openness, the government should not inflexibly insist on  maintainubg  its controlling share of Proton causing the national car to lose the “golden opportunity”  to form a strategic alliance with global automobile giants.

Nadzmi’s arguments should be given serious consideration in the formulation of the new national automotive policy, in view of new international trends in the automobile industry, where Volvo though generally regarded as a Swedish car is owned by Ford while the traditionally British  Rolls Royce is now BMW-owned. Volkswagen has bought up Skoda, although it  is still generally regarded internationally as a Czech car.

During the parliamentary debate, I also referred to the views reiterated by former Finance Minister and Minister for International Trade and Industry, Tengku Razaleigh Hamzah, in the past few days which are accessible on Internet video.

Questioning the viability of Proton, Razaleigh said Malaysia just does not have the capability to make a national car when developed countries like the United Kingdom and   Australia are closing their automobile factories as they could not compete with the global automobile giants in the international automobile market.

As a result, heavy subsidies and government protection have to be given to Proton in the past two decades in the form of customs and excise duties on foreign imports, including a 300% import on CBU cars, forcing Malaysians to pay dearly for cars, whether Proton or other models.

Razaleigh added  that apart from the government subsidy, the Malaysian public have also to give subsidy to  Proton in the past two decades  in the form of the higher prices for imported cars.  Furthermore, Proton  has now incurred a debt of close to RM9 billion which is borne by Petronas.

The issues highlighted by Nadzmi and Razaleigh, as well as by the Proton Adviser Tun Dr. Mahathir Mohamad (that government policies in particular the indiscriminate issue of  67,000 APs last year had hurt Proton) and the Minister for International Trade and Industry, Datuk Paduka Rafidah Aziz (that Proton’s own ‘shortcomings’ were responsible for its troubles and  decline in market share) must be thrashed out openly in the public domain and not swept under the carpet.

I had made a special call to the Cabinet during the debate in Parliament on Tuesday to respond positively to the challenge  by the former Prime Minister to make public the full list of the APs beneficiaries to import cars to demonstrate the present administration’s commitment to accountability, transparency and  good governance.

Malaysians cannot understand why the  Prime Minister, Datuk Seri Abdullah Ahmad Badawi has not been able to agree with Dr. Mahathir to make public the APs list, when he should have accepted Dr. Mahathir’s proposal without a second thought when it was first made at the end of May.

At the latest,  Abdullah should announce  his agreement to make public  the full APs list in his UMNO UMNO Presidential Speech at  the UMNO General Assembly next week to show that his administration has nothing to hide and is  fully frank with the Malaysian public, and most important of all, to set a proper tone on government ethics and national integrity for his  premiership.

(14/07/2005)