Vacancies were filled by the Prime Minister, Tun Dr. Mahathir Mohamad as Chairman, while starting August 20, Employees Provident Fund Chief Executive Officer Datuk Shahril Ridza Ridzuan will replace Azman.

Khazanah is a government-linked investment company (GLIC) with investment portfolios encompassing key Malaysian listed companies like Telekom Malaysia Bhd., Tenaga Nasional Bhd. and CIMB Group Holdings Bhd.

From a political point of view, analysts have anticipated the change in management as it is normal to happen in the transition of the country's leadership to enable restructuring and re-aligning the direction of the company to suit the aspirations of the new government.

From an economic point of view, the assessment and re-alignment of operations and direction is not only required on Khazanah but also other government-linked companies (GLCs).

There is a imbalance in the role of GLIC and GLCs between the achievement of economic growth and its benefit sharing.

In terms of market share, these companies have contributed most to Gross Domestic Product (GDP).

Studies show that their dominance over sales value, assets and stocks ranks fifth in the world, after Indonesia, Russia, Saudi Arabia and China, achieved by 68 percent.

 

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Compared to the role of GLICs and GLCs in the market, their contribution to the distribution of economic wealth is still low and requires revaluation.

Studies have found that they only absorb about 5 percent of the nation's total employment.

Measurements on employment are important as more than 65 percent of household income is generated by the labor market.

Three key aspects need to be addressed by GLIC and GLC management to strengthen their role in helping to distribute fair economic wealth.

First, strengthen the supply chain between GLIC, GLC and small and medium enterprises (SMEs).

The study found that there was a weak supply chain network between big companies and SMEs.

In the supply chain, SMEs are getting a lot of supplies from large companies, while big companies are giving priority to other big companies and import markets.

This is inconsistent with the role of government-linked companies as a catalyst for SME growth.

Secondly, GLCs need to focus on technology and innovation as well as new wealth sources.

The existence of GLCs in an economic sector is found to be discouraging investment by non-GLC companies.

This is supported by the findings of the study that tendency for non-GLC companies to reduce investment in a sector if the market is monopolized by the GLCs.

Third, revaluation of GLC's wealth distribution mechanism.

The current approach is through direct channeling of the company's profits to the government which will benefit the people.

A more sustainable distribution approach is through the labor market by increasing local employment participation in the industry.