Experts: Privatisation drive must be transparent
Key to the 10th Malaysia Plan (10MP) success is the very ambitious goal of increasing private investment by 12.8 percent annually.
Key to the 10th Malaysia Plan (10MP) success is the very ambitious goal of increasing private investment by 12.8 percent annually.
Under the 9th Malaysia Plan, a mere two percent growth was recorded annually since 2006, limiting government revenue which was unable to keep up with the soaring budget deficit and debt.
While several economists laud the 10MP targets, they worry that essential services that should be shouldered by the government would end up in the hands of cronies.
Reactions from industry experts, academics and trade unions follows:
Wan Saiful Wan Jan, Institute of Democracy and Economic Affairs (IDEAS) chief executive officer
I am concerned about the privatisation effort. When you look at previous experience it's been mere corporatisation of government accounts and passing the monopoly of the service to someone close to the government.
I'd love to see privatisation take off, but before that let's make sure we have the right tendering processes.
The privatisation effort could help with the deficit, but only if there are other measures like reducing the size of our bloated civil service. We don't see much said on austerity measures.
Certain things should be too small for the federal government to handle, like making decisions on waste management or botanical parks. Let the local people decide what services they want through their local government. Simply put, the prime minister, who is the MP in Pekan, should not decide for a local council in Kangar.
Lim Teck Ghee, Centre for Policy Initiatives director
The privatisation drive is indication of the desperation of government to raise the level of private investment. While we certainly need the private sector to grow, the way forward is through the acceleration of liberalisation for growth; pursuit of equitable and fair opportunities and fairness in processes rather than crony ridden, politically driven non-market led systems.
For example, the 10MP's aim to privatise solid waste management is likely to result in higher costs for consumers, poorer service and the concessionaires laughing all the way to the bank.
Incidentally, this is the wrong way to reduce the size or scope of government - by cutting back on the government's role in the provision of essential services. It is better to focus on reducing expenditure on defence which has gone out of control.
Education is where public-private partnerships may have value, and the proposed Trust Schools would be a good development. But, let's also not forget that the great majority of our children are enrolled in the national system so let us emphasise the importance of quick and effective reforms to raise their standards.
These reforms have to do with a whole range from equitable allocations to ensure teachers of high standard and a more liberalised and relevant curriculum and language of instruction.
Kristina Fong, Ratings Agency Malaysia analyst
The privatisation measures will give an impetus to the ailing private investment section of the Malaysian GDP. The market will likely react positively to such measures and hopefully this will create more domestic investment, which will be very important to meet that six percent annual growth target.
At the same time it can help with the deficit as outsourcing will take the load off government expenditure, while at the same time raise efficiency in service.
Most of the 10MP appears consistent with the spirit and aims of the New Economic Model, but the part about bumiputera assistance does seem a bit confusing, in particular the assistance offered to listed companies. There certainly is no clear indication as to why this needs to be offered.
The NEM set the expectations on the inclusiveness front quite high, and the 10MP does not appear to meet this expectation.
On attracting foreign talent, the easing of visa requirements is definitely a step in the right direction as visas which expire are among the top complaints for foreign professionals who work in Malaysia.
Noor Sulastry Yurni Ahmad, Universiti Malaya political science lecturer
The ruling government is laying the ground for the next five years, which sees Malaysia heading closer to a two-party system, as such the ruling coalition must appease the community.
But the problem in this country is that we are treating citizens differently, through bumiputera and non-bumiputera statuses and this is creating unhealthy competition.
I think the issue here is not the aid for smaller enterprises but for bigger companies, as the policy appears to enrichen those who are already well off. Help the Class-F contractors but limit the aid for Class-A contractors.
One argument for aiding mature bumiputera companies is that they have contributed greatly to the economy and have brought in foreign investment. But it is also very unfair to non-bumiputera companies who have also contributed in similar manner.
There is doubt that the assistance given to bumiputera business class will trickle down to the lower income group, but in any case it will not break the feudal mentality of a large majority of Malays who expect the government to bail them out.
Mustafar Maarof, Malaysian Trade Union Congress vice-president
Plans to bring in more foreign talent would seriously affect the local job market. We have about 100,000 jobless graduates, so what are we going to do with them?
If you do this, you must first make sure local professionals have job security. And anyway, we know the work culture better than the foreigners.
Even local corporate figures have problems dealing with our workers, what more for foreigners who do not know the work culture here.
I can understand the government situation, in asking companies to bite the bullet, but if you do not address the nitty-gritty issues first, they you will simply threaten the job security of local employees.
This will have a very big impact on the local market, and I do not agree.
Dr. Sidek Baba, Education policy expert, International Islamic University Malaysia
Education policy often looks very nice on paper but the problem is still the delivery where we see much leakages in the system.
Education makes up the biggest part of the national budget, and so by trying out privatisation measures, the government is trying to reduce expenditure there.
Good policy should contribute to the democratisation of education, so increasing vocational schools and community colleges is good as not all students are academically inclined and have other areas of interests.
With good infrastructure and expert trainers, these institutions can provide critically needed workers with sound technical skills and knowledge.
In developed countries teaching is a profession of choice, not one of last resort. By rewarding teachers and lecturers appropriately, and providing better training and retraining opportunities, we can expect to attract quality staff who will place greater stake in what they do.
A lower entry age for schooling and emphasis on pre-school education is welcomed because children today are exposed to a lot of stimuli and are very well-informed at a young age, so this should be harnessed. But parents should know that early education should be about play-learning, not just about reading or writing.
Additional reporting by Joseph Sipalan
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