Anwar will ‘accelerate privatizations’?

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?

Excepts from the Wall Street Journal report:

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 neoliberal approach that has seen essential or strategic sectors being privatised and higher tariffs imposed on the public. This neoliberal approach has also contributed to widening income inequalities.

Soon after he was released from jail in 2004, I asked Anwar whether he would pursue neoliberal policies if he won power eventually. His response was something along the lines of crossing the bridge when we come to it. But with a watershed general election approaching, Malaysians need to make an informed choice so that they know what to expect if the Pakatan is elected to federal power. It is fine to highlight the scandalous NFC ‘cows and condos’ fiasco, but Malaysians also need to know what kind of broad and specific economic policies the Pakatan will introduce in key areas such as health care, transport, housing, education and food production. Not as exciting as ‘cows and condos’ but no less important.

Would a Pakatan federal government go down the neoliberal route with the wholesale privatisation of state assets? Would a Pakatan federal government, for instance, support the privatisation of KTM services (which should be seen as a strategic public service 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 businesses 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 and between non-strategic and strategic sectors of the economy.

Privatisation of strategic sectors like water, health care, higher education, ports and public transport should be avoided.

Profitable assets like GLC highway concessionaires could be used to subsidise the strategic public transport sector including KTM, Rapid KL and light rail operators. Similarly, the lucrative Penang Bridge tolls could be used to subsidise the ferries, Rapid Penang buses and other public transport in the state. Only loss-making non-core or 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”. In this respect, how different is he from the ‘Father of Malaysian Privatisation’, Mahathir Mohamad?

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