Break up GLCs, Virgin boss urges Malaysia

KUALA LUMPUR —

“It will be better if Malaysia can be more liberal and open. It will attract more people to invest,” he said at a business conference, when asked how Malaysia can lure foreign investment under a plan unveiled last week that seeks US$444 billion ($587 billion) of investments over the next decade to lift the country to developed-nation status.

“A lot of your companies are run by the government. It will be better if you privatise, break up big companies into smaller companies for them to compete with each other,” he said.

The Malaysian government retains an ownership interest in most key industries, which gives it the final say in corporate direction despite opening industries such as highways, electricity and airlines to private investment since the ’80s.

Large government-linked companies are significant providers of essential services and employment and account for more than one-third of stock market capitalisation. Such firms are also key beneficiaries of government contracts and privileges, drawing criticism of unfair playing fields for others.

Budget airline AirAsia has long complained of unfair competition with Malaysia Airlines.

Mr Branson’s Virgin Group has a stake in AirAsia’s long-haul affiliate, AirAsia X.

Mr Branson said political issues such as the sodomy trial of opposition leader Anwar Ibrahim had hurt Malaysia’s reputation among some foreign investors, though “not in a major way”.

“But it’s definitely a thorn in the side of Malaysia’s otherwise very good reputation,” he said.

“This has gone on for a long, long time. It looks bad overseas.