Mahfuz Omar(PAS) raised the issue that the EPF has invested half a billion ringgit in gaming and alcohol-related counters. How can Malaysia claim then, he asks, to be an Islamic state?

Please note, Mr Mahfuz, that the EPF money does not belong to the government of the day. The money belongs to the members, employees who have been contributing for so many years so that they may, one day, be able to retire and live on in some dignity. The main aim of the EPF must be to invest so as to maximise the total return to the member, consistent with the safety and security of the capital and taking note of the different generations of the members.

What the last bit means is, a member aged 54 with a year to go before retirement, will want to maximise the security of his accumulated funds. But a member who is 22, will want to maximise her accumulated fund, and is able to take a greater degree of risk, with a greater weighting in equities, and will expect a higher yield over the future.

Many of the EPF members are non-Muslims. They will greatly resent yet another heavy-handed intrusion, this on politico-religious grounds, in the very sensitive issue of their own money which is earmarked for their retirement. I do not know whether there is any research on the performance of funds when skewed by non-involvement in gaming/alcohol-related shares. However, the investment managers must not be fettered in their search to meet the members' objectives, as specified above.

When the Deputy Finance Minister Chan Kong Choy tamely threw in the towel and told Mahfuz that EPF will not make any more of such investments and sell off what it had when it is suitable to be sold, that was a timid capitulation of the future of billions of hard-earned ringgit belonging to millions of non-Muslim Malaysians.

It is an affront to the hard work, loyalty and good values of this very sizeable group of law-abiding Malaysians. None has volunteered to fight for foreigners overseas or other kinds of disruptive behaviour, so far as I know. The ruling party had better think again whether it can disregard their sensitivities in this particular area.

Yet why did Chan capitulate without any reasoned arguments against the complaint? Have our political leaders become so enamoured of their positions that they will take no position, make no stand - don't rock the boat and keep everybody in the Dewan happy?

What could alternatively have been done is:

  • Outline the investment objectives of the EPF as a members' fund; explain that as many members are non-Muslims, it would not be fair to enforce investment policies based on religious grounds on them;
  • Advise that, perhaps the EPF will, as one of the largest such funds globally, consider the possibility of creating a fund invested on Islamic principles, to which members may opt to join and/or transfer their entire credit or a proportion of it.
  • Ask EPF members to write to or e-mail their respective member of Parliament, to demand, as I do, that the Finance Ministry retract the above statement of the deputy minister, cease making changes willy-nilly to the investment policy and offer options to members when changes are contemplated.