ONE of the hallmarks of Dr Mahathir 1.0’s policy instrument in the growth of the Malaysian economy was privatisation, that is, the selling off of government-owned agencies, departments or services. 

The reform-oriented economic agenda that started with the privatisation of the Port Klang Authority (PKA) container division into Klang Container Terminal (KCT), which eventually morphed into a bigger private sector-owned and thriving port business Northport Corporation Bhd (NCB) – a public-listed entity now owned by MMC Ports – was a notable success. 

Not only was it successful in transforming a sleepy government-owned port services entity into a thriving business corporation 10 times bigger in capacity and 20 times more in revenue and profitability, but the port sector also continued to be viable and competitive, injecting new investments, keeping abreast of advances in technology, meeting market demand and, perhaps most beneficial of all, pushing the limits of its management capability to be at a par with other world-class ports. 

Modern approaches in logistics and services were born out of this competitive environment, where Malaysians of various races, creed and religions participated in offering services to the port and freight logistics industries. 

Examples of this industry can be seen in Port Klang, Penang, Johor and Kuantan, where our four major ports are located. All of these ports prospered and grew in private hands.

Whatever the counterargument against this policy, those that proved successful could not have been without a privatisation scheme.

As a result, many other government-owned bodies – Malaysia Airports Sdn Bhd, highway companies, utilities board and several others – followed suit and rode on the success of this transformation programme. Whilst some performed better than others, there were lessons to be learned from its failures, too. Malaysia Airlines was one of the few.

Privatisation also resulted in many savings for the government. It reduced direct government investment, meaning more budget was available for other ministries, such as the education, health and welfare ministries. Reduction in the number of government employees is another benefit, and improvement in the level of service efficiency and productivity were also listed as achievments. 

Yet another key winning formula seldom brought to light is the transformation of government employees into a group of private sector management and operational experts in various fields and services. This is a major achievement as far as individual economic agenda is concerned.

Some of these employees went further by seizing newfound business opportunities and becoming entrepreneurs in their own right. 

With encouragement from the government of the day at that time, many successful businessmen that we see today were products of these policy initiatives, at that time managed through the entrepreneur and cooperative development ministry. 

Between the late 1980s and early 2000s, that ministry played a significant role in supporting these Dr Mahathir 1.0 policy initiatives. By 2009, there were no less than 25 agencies involved in entrepreneurship programmes in one way or another. 

Together with the privatisation plans, many government employees were looking forward to becoming privatised as it promised new remuneration packages, growth potential and bonuses.  

GLC Monsters

But despite its many success stories, strangely enough, a change in Malaysia’s premiership in 2009 saw the closure of the entrepreneur and cooperative development ministry. All of its agencies were distributed among eight different ministries, including the Finance Ministry. 

After 2009, a reverse privatisation exercise crept back into many government ministries and departments, new set-ups were created, more people were employed and government officials got more and more involved directly in business units and management. 

Under former prime minister Najib Razak, the fine line that separated the government’s function as regulator and government entities as business operator got muddled and blurred. This period spells a decline in Malaysia’s drive towards entrepreneurship but a high growth for government-linked companies.

Thus, many government-owned corporations and GLCs benefited directly and were getting involved in practically every business sphere meant for the private sector. Those businesses should have been handled by private entrepreneurs and not monopolised by GLCs.

For instance, how would you, as a private company, compete for many construction projects tendered out by the Finance Ministry, Khazanah Nasional or the Employees Provident Fund when your fellow competitor is a company owned by the Finance Ministry, Khazanah Nasional, EPF or MRCB?  

In any case, there is no such thing as public entrepreneurs or what many refer to today as “GLC monsters”.

Today, many entrepreneurs are in a bind, torn between a decision to invest or not to invest; to compete or not to compete. The market has become so artificial and bumpy, and no longer is there a level playing field when your competitor is a big, fat and ugly GLC. 

Dr Mahathir 2.0

Naturally, under this new government, a complete review of the existing business environment is needed. 

A more vibrant business environment to be driven by genuine entrepreneurs has to be created by Dr Mahathir 2.0 to: 

Reintroduce a privatisation policy. 
Sell off business units owned by GLC monsters. 
Subscribe to the concept that “government has no business to be in business”. 
The Finance Ministry should not be managing business units but should be a good book-keeper.
Revive the entrepreneur and cooperative development ministry.
Provide funds for start-ups and business expansions.
Provide funds for training – from TVET to high-tech industries, including robotics.
Explore new businesses and venture into new markets. 
Make sure business units are not owned by political parties, either. 

In any case, this new ministry should focus on the B40 group to raise household income levels. 

After all, Mahathir 2.0 has said that we must achieve Vision 2020 by 2025. – June 25, 2018.    

* Rosli Khan is MDS Consultancy Group director.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.