Remove AP & Cronies

A member of the G25 group of former civil servants has urged the government to ignore a call for the preservation of the import and export licensing arrangement commonly referred to as the AP (Approved Permit) system.

Sheriff Kassim, who was secretary-general of the federal treasury in the early 1990s, said the system was anathema to competitive trading and thus resulted in higher consumer prices for essential goods, including food.

“The government should not entertain the argument that the AP system is part of the New Economic Policy to support the Malay business community,” he said in reference to a statement attributed to the president of the Malay Vehicle Importers and Traders Association, Zainuddin Abdul Rahman.

Yesterday, a news report quoted Zainuddin as saying that axing the AP system would affect the rights of Bumiputeras. He referred to Article 153 of the Federal Constitution, which makes the Yang di-Pertuan Agong responsible for safeguarding the special position of the Malays and natives of Sabah and Sarawak and the legitimate interests of other communities.

Sheriff said the government should show more concern for the poor – “who have to live with the rising cost of living” – than for monopolists. He noted that most of Malaysia’s poor are Bumiputeras.

“They should not be made to pay higher prices for goods as a result of import monopolies enjoyed by AP holders,” he said.

“It’s time to do away with protectionist policies that benefit a few at the expense of the majority. We should liberalise imports to create a free market and bring down the cost of goods in the shops and the prices of cars too.

“It’s absurd that the prices of cars in Malaysia are higher than elsewhere.”

Last week, the domestic trade and consumer affairs ministry said it was studying a proposal for the abolition of APs for food items. Other products subject to the system include commercial vehicles, motorcycles and heavy machinery.

The system was revised in late 2015 to give more opportunities for Bumiputera businesses in the automotive industry.

Economist Ramon Navaratnam, a former deputy secretary-general of the treasury, commended the government for taking “bold and pragmatic” steps to phase out the AP system, which he said encouraged “crony capitalism”.

He called for a new system that would benefit Malaysians of all races. This would be in line with Article 153, he added.

“This outdated policy has provided opportunities for crony capitalism and the creation and protection of privileged businessmen,” he said. “These people have gained great wealth at the expense of poor citizens.”

He noted that Pakatan Harapan, in its election manifesto, promised to be fair to all Malaysians.

Paul Selvaraj, chief executive officer of the Federation of Malaysian Consumer Associations (Fomca), also commented on the issue. He recalled that Fomca had long ago proposed that the AP system be abolished.

“Removal of APs will remove barriers to trade,” he said. “More competition always results in lower prices for high quality goods.”

Mohd Nazari Ismail, a business and policy professor at Universiti Malaya, said APs could be helpful to Bumiputera businesses. “But if you want to help consumers regardless of race, then there is no need for this AP system,” he added.

Laurence Todd of the Institute for Democracy and Economic Affairs said liberalising APs was a welcome idea because Malaysia would benefit from being an open trading nation.