Putrajaya will no longer give grants freely to bumiputera entrepreneurs as it wants to stop them from relying on the government handouts, says Entrepreneur Development Minister Mohd Redzuan Yusof.

He said most bumiputera entrepreneurs who sought government assistance lack the knowledge and endurance to enter the business world.

“I can give RM50 million or RM100 million as capital, but the question remains if the business is viable. More often than not, we find them to be not viable,” he said in an interview with The Malaysian Insight.

Such practice adopted by the previous BN-led government had turned bumiputera businesses into "Ali Baba" activities where bumiputera businesses would sell their contracts or sub-contract the work over to non-bumiputera businesses.

“It was a vicious cycle with no end to it,” he said.

Redzuan, however, said bumiputera entrepreneurs should not be blamed for becoming fully dependent on the government.

He said they lacked the resources, skills and networks and this had prompted them to grab the opportunity to become Ali Baba entrepreneurs.

The minister said the formulation of the Economic Sabotage Act was part of Putrajaya's efforts to tackle the Ali Baba issue and it was raised at the Bumiputera Congress in September 2018.

The idea was mooted by the National Centre for Governance, Integrity and Anti-Corruption (GIACC) director-general Abu Kassim Mohamed.

Redzuan said it will take time before something concrete is put on paper.

In the meantime, the ministry would continue to give out matching grants for bumiputera entrepreneurs and research and development purposes.

“Agencies under the ministry are still giving matching grants, but the grants that used to be disbursed freely have been stopped," said the Bersatu leader.

He said bumiputera entrepreneurs had performed badly and this can be seen in their contribution to the country’s gross domestic product (GDP) over the past two decades.

Bumiputera entrepreneurs reportedly contributed between eight percent and nine percent to the GDP annually.

Redzuan said the ministry is working on a national entrepreneurship policy which will outline its vision until 2030.

He said this would produce bumiputera entrepreneurs who are not only competitive but also open to new ideas.

There were 44,741 registered bumiputera contractors as of July 2019.