AG: Indicators for effectiveness of Open APs in pushing Bumiputera agenda missing

The Ministry of International Trade and Industry (MITI) has not done any comprehensive study to evaluate the effectiveness and outcome of the Open AP policy in raising Bumiputera participation in the economy, says the latest Auditor-General’s report 2019 Series 2 released yesterday.

The report also added that following the revamp of the Open AP policy in 2019, which removed the annual quota for Open AP issuance (announced by then MITI Minister Ong Kian Ming), no review was done to evaluate the outcome.

Also read: AG: MITI increased allocation of Open APs without systematic records of justification

The audit team also found that 3 recipients of Open AP did not meet Bumiputera ownership requirements, while 28 more failed to meet measures guarding against conflict of interest.

MITI however, said that it had relaxed the Bumiputera ownership requirements for these 3 companies on grounds that that they existed before the Open AP policy. To this, the audit team disagreed, saying that the decision is not in line with the Open AP's policy of creating equal opportunities for Bumiputera entrepeneurs. 

The report noted Open APs have created continuous business opportunities for Bumiputera entrepreneurs in the imported used cars (‘recond’) trade.

However, its effectiveness in contributing to the Bumiputera economic agenda is still in doubt, as there have been no agreed indicators to measure the policy's success, and no database to record and monitor the progress of the Bumiputera companies who have benefitted from it.

Also read: AG: Ports are releasing illegal ‘recond’ cars, Customs on hunt

In response to the report, MITI said it had on 5-February 2021, compiled the business activities of 177 Open AP holders. The data gathered will be used to determine the extent of the Open AP policy’s success in growing Bumiputera participation in the economy, and to prepare a policy paper.

The policy paper for Open APs is being drafted with input from the Ministry of Finance, the association of Malay used car importers (PEKEMA), and the Malaysia Automotive Association (MAA). However due to the current travel restrictions, MITI says the paper can only be finalized in 2022.