Anas Alam Faizli Magna Est Veritas Prae Velabit – The Truth is Mighty and will always Prevail!
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Malaysia’s corporate landscape is not defined by a handful of large companies. It is defined by a system.
A system where government linked companies and government linked investment institutions collectively manage assets equivalent to more than 120% of the nation’s GDP. A system where they account for more than half of listed corporate assets, and play a dominant role in capital allocation across sectors ranging from energy to infrastructure to venture capital.
At that scale, this is no longer a question of participation.
It is a question of design.
Are Malaysia’s GLCs built to compete, or to support?
This is not a new question. Its roots can be traced back to the New Economic Policy, where state intervention was deliberately used to build Bumiputera participation in the economy while catalysing industrial development. From the outset, Malaysia did not choose a pure free market path, nor a fully state controlled model. It chose a hybrid.
Today, that hybrid has reached a scale that can no longer be ignored.
The numbers are striking. Government linked companies and government linked investment companies collectively manage assets equivalent to roughly 120% of Malaysia’s GDP, or close to RM2 trillion. They account for about 55% of total assets, 40% of revenues, and 42% of equity among listed companies on Bursa Malaysia. In market capitalisation terms, they represent more than a quarter of Bursa Malaysia’s total value.
In venture capital, they contributed 38.6% of total funding in 2023, making them the single largest source of early stage capital in the country. By comparison, in more mature markets such as the United States, government participation in venture funding is typically below 10%, with private capital dominating the ecosystem.
These are not marginal players.
They are the system.
To some, this raises a legitimate concern. Does such dominance crowd out private enterprise?
Finance Minister II Amir Hamzah Azizan has argued otherwise. In his view, the role of GLCs and GLICs is not to crowd out, but to crowd in. Through initiatives such as GEAR-uP’s RM120 billion commitment, and co investment platforms like Dana Impak, Jelawang Capital and Dana Perintis, institutional capital is used to de risk sectors where private capital alone has not yet reached scale.
There is merit in this argument.
In many parts of the economy, particularly infrastructure, healthcare and early stage innovation, private capital is often reluctant to enter without some form of risk sharing. Globally, infrastructure financing gaps are estimated at over USD1 trillion annually, illustrating why state participation remains necessary even in advanced economies.
But the tension remains real.
GLCs operate with a dual mandate. They are expected to deliver commercial returns while simultaneously fulfilling national objectives, whether in the form of universal access, employment stability, or strategic capability building.
This duality is both their strength and their vulnerability.
Take Petronas. With revenues exceeding RM260 billion annually, total assets of over RM760 billion, and fiscal contributions surpassing RM70 billion, it represents roughly 15% to 20% of Malaysia’s GDP in annual revenue terms. It is not merely a corporation. It is a pillar of national stability. Similarly, Tenaga Nasional serves over 10 million customers nationwide, while Malaysia Airlines ensures national connectivity despite persistent financial challenges.
Yet from a market perspective, the concentration of more than half of corporate assets within a state linked ecosystem inevitably raises questions of competition, efficiency and capital allocation.
This is not unique to Malaysia.
This debate echoes a long-standing tension between state direction and market forces. China offers perhaps the most pragmatic interpretation of this balance. Under Deng Xiaoping, the country moved away from rigid central planning toward a hybrid model often described as socialism with Chinese characteristics.
Deng’s famous observation that “it does not matter whether a cat is black or white, as long as it catches mice” captured a simple but powerful idea. What matters is not ideology, but outcomes.
That pragmatism transformed China into the world’s second largest economy, now exceeding USD17 trillion in GDP. By 2023, Chinese state-owned enterprises occupied 97 positions in the Fortune Global 500 and received extensive state backing, including large scale financing and over RMB1 trillion annually in R&D investment.
This model has delivered scale and speed.
But it has also narrowed the space for private entrepreneurs in certain sectors.
At the other end lies the United States, where the government plays a minimal direct ownership role. The US economy, with GDP exceeding USD27 trillion, is driven primarily by private capital. Venture capital investment alone exceeded USD170 billion in 2023, almost entirely funded by private sources.
This model has produced world leading companies and technological breakthroughs.
But it also comes with trade-offs, including widening income inequality and underinvestment in public goods.
Europe offers yet another model. Many European economies operate under a social market system, where private enterprise drives growth but the state plays an active role in safeguarding social welfare and strategic sectors.
Countries such as Germany and France maintain state stakes in key industries including energy, transportation and finance. At the same time, strong regulatory frameworks ensure that even large state linked entities operate within defined boundaries. Public spending across European economies often exceeds 45% of GDP, reflecting a stronger welfare orientation.
This approach demonstrates that state participation and market efficiency are not mutually exclusive, provided governance is strong and roles are clearly defined.
For Malaysia, a small open economy with GDP of approximately RM1.8 trillion, the question is not which model to adopt wholesale, but how to calibrate the right balance.
Malaysia’s challenge is not the presence of GLCs.
It is the clarity of their role.
Are they market competitors, or market makers?
Are they expected to maximise returns, or to fulfil developmental mandates?
Without clarity, the risk is not dominance, but diffusion. Capital is deployed, but not always optimally. Mandates overlap. Accountability becomes blurred.
An analogy may help illustrate this.
Malaysia’s GLC ecosystem today resembles a powerful engine running on multiple objectives. It has scale, capital and capability. But without precise calibration, energy is dissipated rather than directed.
The issue, therefore, is not size.
It is alignment.
Moving forward, Malaysia must define its own equilibrium.
This requires three shifts.
First, mandate clarity. Strategic entities such as Petronas or Tenaga Nasional may justifiably carry national mandates. Others operating in competitive sectors should be held to strict commercial discipline.
Second, governance strengthening. Boards must be composed of individuals with deep domain expertise. Performance metrics must be clearly defined and measurable.
Third, capital discipline. GLIC capital should increasingly be deployed as catalytic capital, not dominant capital. Even allocating 5% to 10% of Malaysia’s RM2 trillion capital base, equivalent to RM100 billion to RM200 billion, into co investment platforms could significantly crowd in private capital.
In parallel, Malaysia should gradually divest non strategic assets where private sector capability is sufficiently mature.
Ultimately, Malaysia does not need to choose between Beijing, Washington or Brussels.
But it cannot afford to drift between them.
We must decide, deliberately, what role our institutions are meant to play, and execute with clarity and discipline. Because at this scale, misalignment is not just inefficient. It is costly to the nation.
I have seen, across industries, how GLCs can catalyse growth where markets hesitate. I have also seen how unclear mandates can dilute impact and slow progress.
Malaysia has built institutions of significant strength. Few countries at our stage of development command this level of capital, capability and reach.
The question now is whether we will use it with precision.
If we get this right, GLCs and GLICs will not be a constraint to private enterprise. They will be its strongest enabler.
But if we get this wrong, we risk building a system that is large, but not effective. Active, but not aligned.
This is not just a question of governance.
It is a question of the kind of economy we want to build, and the kind of future we leave behind.
