Prime Minister Dr Mahathir Mohamad today went on a spirited defence of the government's privatisation policy amid mounting criticism.
"Without privatisation Malaysia's system of expressways, ports, power plants and telecommunication facilities would just not be built," he said.
"Our detractors, both local and foreign, talk glibly about cronyism and high toll rates. They are welcome to pay for the cost of completing the highways and charge lower rates if they want."
The government began implementing its privatisation policy in 1983 by farming out infrastructure projects to private companies.
However, some of the privatised projects have encountered spectacular failures and were subsequently re-nationalised.
In recent months the government has spent billions in taking over a number of previously privatised projects, including the RM1.8 billion for debt-ridden national carrier Malaysia Airlines System.
Last month, RM4 billion was spent to rescue UEM, whose subsidiary Renong is the major contractor for a number of privatised highway projects.
The government is also preparing to bail out two major light rail transit companies amounting to RM6 billion.
Over the years, opposition figures and foreign investors have criticised the government's privatisation for promoting crony capitalism as well as widening the gap between the rich and poor.
Privatised companies can fail
The prime minister said that privatisation, like nationalisation, was not perfect. However, if carefully managed, the policy can work.
"But it may fail because the people involved are incompetent or because of economic downturns such as that brought about by deliberate currency devaluation which undermines business," he said.
"Privatised companies, like other companies, can fail and a number of the privatised companies in Malaysia have failed due to the economic turmoil of 1997 and 1998," he added.
Mahathir was speaking at the national conference on 'The National Vision Policy, The Eighth Malaysia Plan and Privatisation' in Petaling Jaya.
The conference, organised mainly by think-tank Asian Strategy and Leadership Institute, was attended by about 500 people.
According to Mahathir, governments took decades to realise that nationalisation resulted in lower efficiency and higher cost, thus impoverishing people and nations.
He said after seven decades of nationalisation, socialist governments finally decided to abandon the policy and swing 180 degrees towards privatisation.
The prime minister, who is also finance minister, said privatisation has contributed much towards the country's development.
If the government had built infrastructure through government funding, it would have to wait until sufficient funds were available, said Mahathir
He added that when capitalists and entrepreneurs were deprived of their businesses as a result of nationalisation, there will be no one to provide the market with profits.
"There would only be government employed workers whose purchasing power cannot be very high. High profit margins would not be acceptable to the workers," he said.
"On the other hand, they would demand higher wages. In the end, governments would earn very little profit from nationalised means and production," he added.
Mahathir said that when this happened there would not be enough revenue to expand on good infrastructure such as road and communication facilities.