EDUCACIÓN Y POBREZA: EL RETO DE LA ESCUELA.

19 Malaysia ACIA Bhd (KLSE, B k l. 1991:127; Matsushita (M'sia) Bhd (KLSE, Bk 11. 1991:146; Sungei Way Holdings Bhd (KLSE, B k l. 1991:459); Amalgamated Steel M ills Bhd (KLSE, B k l. 1991:11); Federal Flour Mills Bhd (KLSE, Bkl 1.1991:42); Hong Leong Industries Bhd (KLSE, B kl. 1991:133).

directorships held by Nasruddin, suggest he was less active on those various company boards than our next example, Radin Soenamo, who was primarily identified with the fortunes of one corporate group, Mun Loong Bhd.

Radin Soenamo's civil service career culminated with his appointment in 1984 as head of the Economic Planning Unit (EPU), in the Prime Ministers Department. In that position he was influential in selecting and prioritizing all major government projects. During his period as Director General the EPU approved the controversial Penang bridge project, and gave firm backing for the manufacture of the national car, a HICOM project strongly supported by the Prime Minister, Dr Mahathir (The Star, 6:5:1987). After retirement from the EPU in April 1987, Radin Soemamo's state/political links facilitated an easy transition to the private sector.

Less than two months after leaving the EPU, Tan Sri Radin was appointed chairman of United Engineers (M’sia) Bhd (The Star, 1:7:1987). United Engineers was then the main publicly-listed company of UMNO-controlled Hatibudi Nominees which was awarded the controversial $3.4 billion contract for the privatisation of the North-South highway project. At about the same time, Radin Soenamo was also appointed chairman of United Asian Bank (UAB), which in early 1991 was taken over by the UMNO- controlled Bank of Commerce Bhd (NST, 15:3:1991).

Tan Sri Radin’s close association with such a peak government agency as the EPU on the one hand, and as chairman of United Engineers and Bank of Commerce, with UMNO's corporate investments in the private sector on the other, meant he was well placed to provide the advisory and brokerage tasks of a functional director. In the late 1980's he was invited to be chairman of the textile and retail group, Mun Loong Bhd. Significantly, shortly after his appointment Mun Loong gained approval from the FIC for the takeover of the well established Hankyu Jaya retail chain. The takeover transformed Mun Loong from a small company to a major retail chain and Tan Sri Radin's contribution to that transformation was reflected in his position as an owner-director of the company.20

The NEP has fostered the growth of a corps of state managers some of whom, as functional directors, have utilized the experience and contacts they have made with the corporate world to make (in varying degrees), a transition to the private sector. The

20 _{Radin Soenamo was the second largest shareholder in Mun Loong Bhd with a 15 per cent stake in} the company. See KLSE, B k l 1.1991:152.

relationship between functional directors and business is however fundamentally different from that o f figure-head capitalists whose appointment to company boards was largely symbolic and related to their social standing in Malay society. Functional directors by contrast are appointed for a combination of their corporate knowledge, contacts and experience in the state sector and the crucial linkages they offer between the state and business. As a result functional directors carry more weight than figure-head capitalists in the relationships/directorships they enter with foreign or Chinese companies and in that regard represent a significant advance in the development of Malay capitalism.

B u rea u cra ts-tu rn ed -B u sin essm en

As noted earlier, in the 1960's and early 1970's educated M alays gravitated to employm ent in the public sector for reasons that were a combination of history, culture and economics. Inevitably, therefore, most of what may be termed the 'first wave' or generation of Malay businessmen to emerge after the NEP had commenced their working lives as bureaucrats in the 1950's and 1960’s. While many of those individuals still retain state links of various sorts, they are now primarily identified with the private sector, and so it is from that perspective that we shall examine their relationship with the state in a later chapter. In contrast, the "Bureaucrats-turned-Businessmen" discussed here are those whose business success has been closely tied to their bureaucratic backgrounds. To com plete our account of the variety of ways state sponsorship has produced Malay capitalists we will consider the exam ples of two bureaucrats-turned-businessm en, Shahrani Haji Abdullah of Shapadu Holdings Sdn Bhd and Ahmad Mustapha bin Mohd Hassan chairman of South Pacific Textile Industries Bhd.

Shahrani Haji Abdullah was bom in 1947. During the sixties he was a government servant in the Ministry o f Works at Port Klang. He later left the government service and in 1970 set up a company called Shahrani Hj Abdullah and Co, which was a general trading company that dealt mainly in scrap metal. He also set up another company to operate a private jetty to handle timber at Port Klang from which he diversified into various container haulage operations (Y oshihara, 1988:171). In 1978 Shahrani established Shapadu Holdings Sdn Bhd which became the parent com pany for his various business activities. The contacts Shahrani established whilst an employee of the Departm ent of W orks at Port Klang, and the experience he had acquired in container haulage meant he was well placed, particularly after the introduction of the NEP, to make a successful bid when the Port Klang container terminal was privatized in 1984 (BT, 21:3:1984). At about the same time the Shapadu group was also awarded a $20 million contract to build and maintain the Port Klang by-pass road, again Shahrani's contacts

with his former employer were apparently invaluable in securing that particularly lucrative contract (BT, 2:3:1984).

State support was obviously critical in the early stages of Shapadu's operations. However as the company gained greater experience and a reputation for efficiency, the group expanded and diversified its container operations and maritime activities. An important initiative undertaken by the company was a major 'cargo consolidation' project to direct goods for the ASEAN region from East Asia and elsewhere through Port Klang. By the late 1980's a Shapadu subsidiary, Shapadu Kontena Bhd (SKB), was the container haulier with the second largest fleet in the country (BT, July 16-31:1992). It had also established itself as a viable, profitable Bumiputra enterprise21 no longer largely dependent on government patronage. In the highly competitive container and haulage business, SKB claimed to control 26 per cent of the business at Port Klang 23 per cent at Johor Bahru and 14 per cent of the business that passed through the port of Penang (MB, July 16-31 1992). In January 1992 Shapadu Kontena Bhd was listed on the Kuala Lumpur Stock Exchange and, because it was the only listed company in the high growth haulage industry, it was a most attractive investment and so was able to easily raise funds to finance further expansion.22 As the largest individual shareholder in SKB, Shahrani was an owner-director of the company and a multi-millionaire (MB, July 16-31 1992).

Initially state backing was crucial to Shapadu's growth, but the managem ent and diversification of the company, and its emergence by the early nineties as a largely independent and self-sustaining Bumiputra industrial group, was due to the efforts its founder, Haji Sharani. Importantly, Haji Sharani demonstrated that it was possible for those whose origins were of a 'rentier' or 'client' type to capitalise on state support and develop as entrepreneurs.

Ahmad M ustapha bin Md Hassan, chairman since 1985 of South Pacific Textile Industries Bhd (SPTI) made a transition to business while still employed as a civil

21 While not spectacular, SKB has made good and steady profits. For FA" 1993 SKB was expected to record a pre-tax profit o f between $17 and $18 million, up from $12 million in 1992 and $10 million the previous year (MB, July 16-31:1992).

22 Interestingly, in 1992 there was also a management rift in Shapadu, the causes o f which were similar