Malaysia to liberalise parts of services sector

Malaysia said Wednesday it will liberalise parts of the services sector, removing ownership rules linked to a controversial affirmative action policy for majority Muslim Malays.

Prime Minister Najib Razak, who was sworn in earlier this month, said that 27 sub-sectors would be liberalised "to attract more investments, bring in more professionals and technology as well as strengthen competitiveness."

The areas targeted for liberalisation are in the areas of health and social services, tourism, transport, business services and computer and related services.

Businesses in those service industries will no longer have to be 30 percent owned by "bumiputera" - a term that means "son of the soil" and takes in Malays and indigenous tribes.

The rule is part of the New Economic Policy (NEP), launched after 1969 racial riots, in an effort to narrow the wealth gap between ethnic Chinese - who control the business sector - and Malays, who dominate government.

Critics say the policy has failed and that its biggest beneficiaries have been Malay entrepreneurs who cash in on an array of perks including discounts on property purchases and specially allocated government projects. AFP