Donald Trump's "Liberation Day" tariff was meant to protect U.S. industry, punish foreign exporters, and raise revenue, but it was done without consideration to consumer welfare, livelihood of workers in the global supply chains, and sensitivity of low-income households to price increases.
Reciprocal tariff severed international cooperation and goodwill by alienating allies and trading partners. As a result of the inhumane manner it was implemented, the tariff policy led to domestic cost burden, pushback on US businesses, retaliation from trading partners, legally and economically unenforceable, and risk of global isolation.
This highlights the problem with trade or business that over-focus on narrow economic and business objectives without consideration for social, cultural and environmental expectations.
For companies operating in a developing country and sensitised environment such as Malaysia, it need be aware of the national aspirations and extend beyond the mandated corporate governance.
Sumitomo Group have been operating in Malaysia for almost 50 years. They are involved extensively in various business activities in investment and trading, manufacturing, rubber industry, electrical, agricultural, finance, healthcare, e-Commerce and energy.
The Group has grown through the phases of leaps and bounds with the nation's social and economic development. It should already understand and familar with the national expectation.
DEI
More so, Sumitomo Corporation Group recognised Diversity, Equity & Inclusion (DEI) as a policy for a productive and sustainable human resource. The company emphasised it as an enabler for "value creation, innovation and competitiveness".
This is in consonant with the group that trace its origin to the 17th Century and its founding father's business philosophy to the Buddhist Principle to emphasise integrity, prudence and far-sightedness.
Despite its stated DEI policy and Buddhist philosophy, its commitment for human rights and opposition to discrimination seemed to fall short in the operation of Malaysia's Sumitomo Mitsui Banking Corporation (SMBC). This is despite introducing ESG in a financing solution in 2021.
SMBC started as a representative office in 1975 and is now domiciled in Malaysia as a public limited company. It operate under a full banking license since commencement in April 2011. And has established an Islamic banking unit in 2014.
With the broad areas of participation, it is only expected of SMBC to be a good corporate citizen and support the national goals.
Discrimination?
Unfortunately, in a population of 69% Bumiputera, 22% Chinese and 9% Indian and others, SMBC employs less than 30% Bumiputera amongst its 300 employees. There is only one Bumiputera versus 4 non-Bumiputera members of the Board of Directors.
Bumiputera holding senior management positions are few. There was a recent resignation of two Bumiputera senior management members and suspicion abound of fault finding exercise to systematically eliminate more Bumiputera management staff.
The racial tendency is reflected in its business. SMBC do not promote and limit its exposure in Small and Medium Enterprises (SME), in which Bumiputera entrepreneurs are mostly in.this segment. Is there racial biasness for non-Bumiputera clientele?
Government has not foresaken the Bumiputera agenda. Its policy remains a balance between promoting business and growth while at the same time, pursue DEI polices to promote and protect the Bumiputera interest.
Reduce imbalance
Malay special rights is enshrined under Article 153 of the Malaysian Constitution. The need to reduce the economic disparity between ethnic groups in employment, and generally reduce imbalances and inequalities remain at large.
The New Economic Policy ended in 1990. but subsequent Government policies including the present Madani government has not forsaken this agenda.
Malaysia’s long-term aspiration for racial equality and increase Bumiputera participation forms part of the national capability building, protection of meritocracy and non-discrimination practise. It is also part of the corporate DEI commitment of Sumitomo group.
The non-conformist practises at Sumitomo's financial arm does not reflect it's aspiration to utilise diversity to "build on each individual’s strengths, and combine the forces" in their pursuit of accelerated growth and collaboration abroad.
It is not mandatory on SMBC to hire according to the population demography, but a proactive DEI and inclusive hiring strategies will build goodwill with regulators and communities.
It is already a commercial practise to conform to ESG criteria and a matter of time, DEI disclosures could be mandated to meet social, regulatory and business expectations. Business for business sake without conforming to social norms and expectations of the operating environment will not be acceptable.
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