Why Government Implement the Privatization Policy?

Why Government Implement The Privatisation Policy?

1) Government’s wish to see that Malaysia develops rapidly in order to give Malaysians improved living standards and quality of life. Malaysian already had the skills and basic ethics. The restraining effect of too much Government regulations, controls and involvement must be reduce in order to maximize the potentials.

2) When reaching independent, the Government, inevitably had to take the leading role in developing the country, but there are a lot of limited capacity of the local private sector at that time such as entrepreneurial, managerial and financial resources and bring many imbalances and disparities.

3) Government revenue should improve with privatisation and Government expenditure would decrease. The Government immediately gains the profit of the sale from the company tax.

4) The Government will still maintain its role as the guardian of public welfare. This will be done by minimal regulatory measures rather than through direct participation in the production of goods and services. The government will channel subsidies to the selective basis and to deserving cases. The Government will remain accountable to the public and responsible for ensuring that privatisation will be beneficial to all concerned.

5) Fears of strategic industries falling into the hands of foreigners. Fears of the privatised can also be overcome although there are dangers attached to the policy, safeguards can be built-in to prevent such dangers.

What private sector need to change?

1) The infrastructure in place and the private sector need better equipped with man, money and skills to make privatisation feasible.

2) The asset cannot be disposal freely. Private company have to continue providing the service and to continuously upgrade it.

3) Be the honesty, the skill and the diligence of our managers and workers. A system is only as good as the people who man it. These determine whether privatization will be beneficial or not.

4) Malaysian did not have enough managers. The good number is mediocre. Some are downright dishonest. If privatisation is going to remedy the ills of nationalisation then we must have good managers.

5) The responsible institutions in the private sector such as merchant banks, business consultants and intending entrepreneurs need to study very carefully the ability of the companies taking over Government services or enterprises.

6) Learn from good examples and experience in other countries. Use their expertise with their direct involvement.

7) Privatisation should result in improved income for their employees but it depends on the efficiency of the private sector lead to