Friday, 16 November 2018 – The Federal Land Development Authority (FELDA) has been responsible for freeing hundreds of thousands of poor and landless Malaysian households from poverty since the late 1950s. While developing tracts of jungle land into oil palm and rubber plantations for redistribution to settlers, FELDA was also able to transform into a vertically-integrated agro-business. Yet its very success has attracted powerful rent-seekers and political elites keen to use FELDA’s assets and profits for purposes antithetical to those of settlers and FELDA’s original mission. In the wake of the momentous events of GE14, ISEAS-Yusof Ishak Institute invited Dr Rosli Yaacob, Economic Adviser to the NGO Persatuan Anak Peneroka FELDA (ANAK) to outline some of the roots, consequences, and possible solutions to FELDA’s deepening financial malaise.
Following introductory comments by Dr Geoffrey K. Pakiam, Fellow with the Malaysia Studies Programme, Dr Rosli traced FELDA’s evolution from a public institution tasked with poverty alleviation into a business giant that eventually helped sire one of Malaysia’s largest-ever publicly-listed companies, FELDA Global Ventures. Dr Rosli highlighted FELDA’s humble beginnings as a federal financier to state land schemes in the late 1950s, before the institution got directly involved in land management, ramping up new settler schemes until 1990, by which time over 112,000 households had been resettled. From 1991 onwards, FELDA’s remaining land banks were nested in a different vehicle and run as plantations due to lack of interest from rural households who were more interested in urban livelihoods. But these plantations remained held in common ownership by the original settler households and their descendants, who in turn received generous annual dividends from the profits eked from these lands.
Dr Rosli spent considerable time dissecting the complex processes through which FELDA Global Ventures was publicly listed, breaking down the numerous aspects of the controversy. He demonstrated that not only was the Najib Razak government’s decision to push through the listing a commercially dubious one, but that the entire process violated key corporate and land legislation, mostly at the expense of FELDA settler livelihoods. Dr Rosli also showed how FELDA Global Venture’s poor commercial performance post-2012 was largely due to internal governance problems, with low palm oil prices merely aggravating underlying issues. The new Pakatan Harapan government needed to take FELDA back to its roots, focusing on settlers themselves. To do so, he proposed that FELDA buy back its plantation land and milling facilities from FELDA Global Ventures, and sever the former’s operations from those of the latter.
The seminar spanned ninety minutes, with research scholars, government officials, private sector professionals, and other members of the public in attendance. Fielding questions from the audience, Dr Rosli discussed a number of further issues, including the upcoming White Paper on FELDA, FELDA Global Venture’s share distribution, economic perspectives of settlers themselves, and FELDA’s need for reform as indicative of a broader challenge facing officials tasked with overhauling Malaysia’s Government Linked Companies.