BOP 101 – Should governments and political parties be involved in business?

Should governments and political parties be involved in business?

As it involves more than millions, it is now a billion dollar question.
And you only need to answer yes or no. Simple as that.

I have always said NO, the government should not be involved in business. Other than financing strategic utilities and infrastructure projects, governments have no business to be in business. For one simple reason. Conflict of interest.

The government’s sole responsibility is to look after the interest of the nation and its citizens. Politicians who runs the government that is involved in business will inevitably be tempted to look after their own personal interest. So whose interest comes first?

It does not matter whether the government is managed by Barisan Nasional or the new Pakatan Rakyat, we should eliminate this potential conflict of interest and that can only be done if the government divest itself from all forms of businesses.

It might take another 50 years to change to a business free government so I have decided to share some business knowledge with our current and future politicians. For easy reference, we will just call it BOP 101 for dummies. This advice is for smarter politicians. For the really slow and dumb politicians, they will just have to wait for my Simple Business of Politics or SBOP 101 for Dumb Dumbs.

My reasoning is since they are going to be involved in business, they might as well learn to manage their parties and government like a real business. Register the parties not with Register of Societies but register like a business – public limited. If they can show consistent profits or everlasting donations, they should be allowed to list their party in our Bursa Saham. Then they become a public listed company. Everyone can own a piece of them and become loyal supporters.

As with all companies, the party should have a Board of Directors with all the perks, a properly remunerated CEO/ President, financially sound and certified CFO and a proper management team structure, each position remunerated based on importance of the job at hand. Talent recruitment is crucial. Smart or loyal? Tough choice especially when you have hired a not so smart CEO. Smart CEO’s prefer to have smarter people working for them. Birds of dumb feather tend to flock together, loyally.

A properly worded Corporate Governance charter should be written with particular emphasis on donations, personal accounts, trustees not proxies, and what nots according to the fancy of the Board of Directors and its member shareholders. This is to avoid any unnecessary misunderstanding amongst the members when the shit hits the fan.

Then they have to decide their business model and their mission and vision for the country.
Even if their vision looks cloudy and their mission, impossible, I believe they should still put up a brave front and state it out bold and clear to guide the people. Any new government can refer to our past programs like Vision 2020, 1Malaysia, 1This and 1That for inspiration.

To avoid massive misunderstanding with everyone, just avoid 1MDB. Don’t even talk about it. But I must admit they were quite ingenious to create this massive web of activities and deceit. Hats off to our new Chinese Sheikh from Middle Earth. Goldman made a sack from this deal too. So why was the white people involved in the first place?

If you are into film making, it is too late to buy this script to make it into a Hollywood movie. Someone’s son has got first right and has the author as the partner and financier. Scheduled to appear in 2020 when Malaysia gets to middle earth or Mordor.

Like all commercial businesses, every political party or government will have to sell
products and services to their customers. The former 4A’s President Tan Sri Vincent Lee explained to me that no amount of creative advertising can sell a bad product. The more you advertise, the worse the product will be perceived as you would have to lie about the quality. So get your product right first and try not to pre sell by word of mouth if you do not have smart ministers to push the idea. No customer likes a ridiculously funny product. It would come across as a bad joke.

Advertising your perceived good deeds and services through your regulated media will not be as effective as before. Times have changed. Your customers just do not believe the regulated messages anymore. Internet have changed the communication landscape. And since most businesses have gone online in a big way, closing down the Internet will effectively shut the whole economy down. In fact, news are available instantly through Whatsapp, Instagram, Twitter and Facebook. Press releases are passé so save your money and sack your PR consultant.

Market research of your consumers should be conducted annually. Market segmentation by race is now outdated. Product offerings by race is also outdated. Malaysia is now a sophisticated market and I would encourage you to change the way you think about your consumers and marketplace before deciding on your business model and product strategies.

The current opposition parties of PKR and DAP have gone multiracial and they seemed to have had a better pulse on the needs of the consumers than Barisan Nasional race based component parties. With a fast growing middle class, there seem to be a need for a third party for the intellectuals. Just like the Liberal party in many European countries.

Since this advice is not suitable for current set of politicians, I would like to dedicate this column to our next generation politicians who will come into power soon. I would assume in terms of qualifications and age, the next Finance Minister would be either Khairy or Tony Pua, both smart Oxford graduates. We should separate the duties of the CEO and the CFO. PM should not be FM.

Time to change the old ways of doing business. Only the young have the energy to disrupt.
Can you hear me, Khairy and Tony?


2 thoughts on “BOP 101 – Should governments and political parties be involved in business?

  1. Great article Thiam Hock, not because you quote me on the bad product bit but it’s so true that governments should not be involved in business.
    It’s not only a conflict of interest but stupid to be involved. Governments already owned all our businesses technically by taxing us. Roughly they owned 30 percent of our companies with a guaranteed profit !


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