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Mixed reactions on bid to revive M'sian PC scheme

Allowing members to withdraw retirement funds to buy PCs can boost industry's growth by another 2 percent, says ICT body. But, scheme was previously abused.
Written by Lee Min Keong, Contributor

KUALA LUMPUR--A proposal to revive the country's controversial PC purchase scheme has garnered support from industry players hoping for a market boost, but not from the government agency managing the funds that support the scheme.

Energy, Water and Communications Minister Shaziman Abu Mansor said recently in a local news report that contributors to the Employees Provident Fund (EPF) should be allowed to withdraw their money to buy computers, as these systems were essential learning tools. Shaziman revealed that the Malaysian Communications and Multimedia Commission had been asked to review the scheme.

The EPF, an agency under the Finance Ministry, launched the computer purchase withdrawal scheme in 2000 but discontinued it in August 2002 following a spate of fraudulent withdrawals. Under the scheme, EPF contributors could withdraw a maximum of 3,500 ringgit (US$976) from the fund to purchase a PC.

During that period, some 750,000 contributors withdrew about 2.2 billion ringgit (US$613 million) under the scheme. Of that, 87,000 contributors were believed to have been involved in fraudulent withdrawals from 2000 to 2002, according to Finance Ministry data.

Nik Affendi Jaafar, senior manager of public relations at the EPF, confirmed the agency has yet to receive a proposal from the ministry to revive the scheme. He added that the EPF's management team would study any proposal submitted on the matter.

However, Jaafar noted that any subsequent plans must be in line with the roles and objectives of the EPF as a retirement fund.

"Any decision taken on the matter must be in the long-term interests of our members," he told ZDNet Asia in a phone interview.

As at Dec. 31, 2007, the EPF had a total of 11.69 million members, of which 5.4 million were active and contributing members.

However, EPF officials were less than enthused by Shaziman's proposal to revive the scheme. A senior official from the agency said such a scheme was "not relevant" to the EPF.

Alluding to previous fraudulent practices, the official said the PC scheme was "a mess", and that given a choice, the EPF would rather not revive the program unless it was a Cabinet decision.

When it suspended and later terminated the scheme, the EPF then said it had detected efforts by several syndicates to assist members in making fraudulent withdrawals from their savings under several EPF withdrawal schemes, especially the computer purchase withdrawal scheme. In such cases, the members pocketed the money without actually buying PCs and the syndicates received a share of the payout.

Boost to IT sector
However, PC vendors and Pikom, the national ICT association, are hoping the EPF will revive the scheme to boost the country's IT sector, which has been hit by the effects of the global economic crisis.

Danny Lee, country general manager of personal systems at Hewlett-Packard Malaysia, said: "HP applauds the Malaysian government's [efforts] to revive the EPF PC scheme, to intensify efforts in providing affordable and ubiquitous access to ICT."

Lee said, in an e-mail interview, HP was confident this move would significantly increase the adoption of ICT among more Malaysians. "Furthermore, it will promote a more pervasive ICT environment that will enable Malaysians to compete effectively in knowledge-driven economic opportunities," he said.

Pikom said the reinstatement of the scheme will help bridge the digital divide among consumers via increased PC ownership, which in turn will help achieve Malaysia's broadband penetration target of 50 percent by 2010.

"The ICT industry growth is expected to slow to about 5 percent this year, compared to 7 percent in 2008 and double-digit growth in previous years. One measure to stir the industry is the re-introduction of the EPF withdrawal for PC purchase scheme," Pikom said in a statement.

"Pikom estimates such a scheme will generate sales of about 300,000 units of PCs, including peripherals and broadband subscription, that will add about 700 million ringgit (US$195 million) to the ICT industry a year. This in turn will see the industry grow at about 7 percent [in 2009], rather than [the] 5 percent earlier projected," it added.

"For the last three months, Pikom has been studying the shortcomings of the last EPF withdrawal scheme, and has prepared a firm proposal to revive the scheme," the statement added.

The association also met with the Energy, Water and Communications Ministry to present its proposal to overcome some of the weaknesses in the previous scheme. However, Pikom officials declined to reveal what these measures were.

The association said it was "ready" to take the lead in reinstating the scheme, and is requesting that the federal government assign Pikom the task of implementing the scheme, if it is revived.

Lee Min Keong is freelance IT writer based in Malaysia.

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