Public enterprise management in Malaysia

Abstract

With the 1969 riots, the racial strife that had been kindling in Malaysia for a long time was brought into the limelight. Malaysia's racial problems are related to economic and political imbalances that exist within the economy. The Malays have the political power while the non Malays control the country's economic and commercial life. As long as there had been no encroachment into each others spheres, the magnitude of the racial problem was kept low. However, with the advent of Malay economic awareness and the growth of non Malay political consciousness, this delicate balance that had been nurtured throughout the colonial period could no longer be sustained. In the early years of independence, the government took a conservative view of achieving any form of equity. The state kept a low profile in the economic life of the country. However, lopsided economic development coinciding with the racial function required rectification. In view of the fact that the government did not want to adopt coercive redistributive policies, the public enterprise form provided the necessary organizational apparatus to bring about some measure of economic equity. In the formative years of public enterprise growth, their role was limited to infrastructural development. Where they undertook the development of the economic life of a particular community, the activity was cloaked in general terms. After the riots, their role became more defined. They were the 'chosen' organizational form for achieving the government's 'New Economic Policy'. Between the decade 1960-1970 the number of public enterprises that were created increased tremendously. This unplanned and haphazard creation has led to a great amount of duplication of functions and increased the problem of co-ordination and control. The public enterprises have relied heavily on the government for funding. Self-financing is extremely limited among them. This reliance for funding from the general taxation has meant that public accountability has become more than crucial. Given Malaysia's political situation and general public apathy, parliament has to assume this role of being a critique more effectively. But as has been noted in the thesis parliament has been ineffective. Public enterprises themselves face numerous problems. The New Economic Policy has to be achieved in the next ten years. Given the achievement in the last decade, it appears most unlikely that all the targets would be achieved by 1990. However, once the New Economic Policy is achieved, the role of the public enterprises in the public sector becomes most unclear and uncertain. No thought has been given to this matter as yet. It is left to anyone's guess whether there would be outright nationalization or denationalization after 1990.