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10 APRIL 2024

Monday, January 30, 2012

Anwar will ‘accelerate privatizations’?

Anwar needs to clarify a Wall Street Journal report that says he wants to “accelerate privatizations” if elected. What exactly does he want to privatise?
If elected, Mr. Anwar said he will accelerate privatizations and do more to enable free markets to operate more efficiently, such as improving transparency in the bidding for government contracts.
“The overall principle is that we want the government-linked companies to sell off their noncore and noncompetitive assets,” Mr. Najib said in an interview two weeks ago. “We are always looking out for how to add value to the country.”
Mr. Anwar, though, criticized the way Mr. Najib’s government pursued these privatizations, saying that without open, public tenders, key companies remain controlled by a well-connected few.
Privatization “looks good, but look again at the procedures,” said Mr. Anwar. “The issue is not about privatization, it is blatant corruption.”
While it is important to do away with corruption and cronyism, the issue is also about privatisation (and other neoliberal policies), and not just how privatisation is done. Many Malaysians have had enough of the BN’s neo-liberal approach that has seen essential or strategic sectors being privatised and higher tariffs imposed on the public. This neo-liberal approach has also contributed to widening income inequalities.
Would a Pakatan federal government go down this neoliberal route with the whole-sale privatisation of state assets? Would a Pakatan federal government, for instance, support the privatisation of KTM (which should be seen as a strategic government asset to promote public transport) or the privatisation of Penang port? Would it support the de facto privatisation of higher education and health care (albeit indirectly through the promotion of private ‘medical tourism’, HMOs and the like). Would it hive off timber concessions, and strategic urban land banks – without providing for public amenities, public education, public health care and recreational parks – to private developers?
It is true that the BN government has engaged in business that it should never have been involved in, in the first place. Think of Proton, which has drained so much of our resources. To dispose of such GLCs is fine.
But there should be a clear distinction between profitable and loss-making non-core sectors as well as key sectors of the economy like water, health care, higher education, ports and public transport, where privatisation should be avoided.
Profitable non-core assets like GLC highway concessionaires could be used to subsidise KTM, Rapid KL, Rapid Penang, and light rail and other public transport operators. Similarly, the lucrative Penang Bridge tolls could be used to subsidise the ferries operated by Penang port. Only loss-making non-core, non-strategic sectors that are not of public interest should be privatised if they can’t be turned around.
Thus, Anwar needs to clarify his statement and explain precisely what he means (assuming the WSJ reported his intention accurately) by wanting to “accelerate privatizations”.
- anilnetto

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