Rafidah wants import permit scheme abolished

Rafidah wants import permit scheme abolished

Associated Press, Kuala Lumpur

Malaysia's trade minister says she wants a controversial car import permit scheme abolished -- a surprising about-face after defending it stoutly amid allegations the policy was misused to benefit a few well-connected businesses.

"To me, the entire system should be abolished," Rafidah Aziz, the international trade and industry minister, said at a seminar late on Friday.

"It goes against the World Trade Organization agreement."

She did not elaborate and could not be reached for comment on Saturday.

Under the scheme started more than three decades ago, Approved Permits, or APs, are issued to ethnic Malay-owned companies as licenses to import foreign cars. It was meant to help Malays gain a foothold in the auto sector and catch up with the economically dominant minority Chinese.

But the International Trade and Industry Ministry has been accused of awarding the licenses to only a few businesses, including those close to Rafidah.

Rafidah, Malaysia's best-known female politician, previously defended the auto permit scheme and denied any wrongdoing. She gave a lengthy explanation on the AP policy at this week's Cabinet meeting.

New Straits Times chief editor Kalimullah Hassan wrote in a commentary on Saturday that Rafidah couldn't convince the Cabinet of the grounds for giving a large number of APs to two former officials who worked under her previously, and indicated she may lose her job, which she has held since 1987.

"Unfortunately, Rafidah's tenure today has become almost untenable unless she can pull the proverbial rabbit out of the hat and turn back the tide of negative sentiment against her," he said.

The government said there was weaknesses in the AP scheme and pledged to revamp the policy as part of a national automotive policy that will be announced next month.

It also vowed to safeguard the interests of national car Proton, which is struggling under competition from foreign car makers.

The two issues have dominated headlines in Malaysia since last month when former Prime Minister Mahathir Mohamad, who is now Proton adviser, accused Rafidah's ministry of issuing APs indiscriminately.

A list of AP holders made public by the government showed four businessmen -- of which two are former senior officials who served under Rafidah -- received the bulk of permits issued in the past two years.

The Star newspaper's chief editor, Wong Sulong, wrote that Rafidah's call to abolish the AP policy is causing consternation among local car manufacturers and assemblers, who fear free auto importation would devastate their business.