From privatisation to 'crony-privatisation', Jomo on Dr M's economic legacy

Prominent economist Jomo Kwame Sundaram recalled Dr Mahathir Mohamad’s economic legacy, specifically on the latter’s privatisation policy during his first tenure as prime minister.

Jomo claimed at a forum that Mahathir had embraced the policy, which was pioneered by former Britain prime minister Margaret Thatcher, with an added “Malaysian twist, which is crony-privatisation”.

His remarks drew laughter from the audience but he stopped short of elaborating on the matter.

“Then with a record of the so-called new liberalism, he began a policy, which administered to policies of cheap labour,” he said.

Jomo (above) was speaking at a forum titled 'Hard Talk: The Economy - On Track or Sidetracked?' at the International Malaysia Law Conference held at Shangri-la Hotel in Kuala Lumpur today.

Former prime minister Dr Mahathir Mohamad

Jomo then offered the audience a recap of Mahathir’s legacy and stressed the importance to recognise that the latter had made “a number of turns” when he served the country for 22 years as the premier.

“He started off, as some of the older ones here remember, the industrialisation with Malaysia Incorporated and so on and forth. All of this was abandoned about half a decade later.

“Then during the financial crisis in 1997 and 1998, we had a new situation. He was very concerned about concentrating the financial power in this country in terms of the banks and it resulted in the reduction of more than 60 banks to about 10,” he added.

Mahathir first announced the government’s intention to embark on a privatisation policy in 1983, when he said it was in line with the Malaysia Incorporated Policy and hoped that the government's financial burden could be alleviated.

In the early 2000s, it was reported that the government had spent billions in taking over a number of previously privatised projects, including Malaysia Airlines Bhd and property developer UEM Group.

Responding to his critics at the time, Mahathir, who was also finance minister until his resignation in 2003, repeatedly defended the privatisation policy as a catalyst for Malaysia’s infrastructure development.

In an interview with CNN Indonesia in 2017, the nonagenarian continued to defend his privatisation policy which critics claimed had created a culture of crony capitalism and widened the income gap in Malaysia. - Mkini