Tuesday, March 31, 2009

benefits of privatization

Course: KJM630 - Engineers in Society

Topic: The expected benefits of privatization of public utilities companies in Malaysia are technological and economic efficiency. Discuss with examples whether those benefits have been achieved.


Introduction

On 1983, Malaysia was starting shown attention on privatization when prime minister launched Privatization Policy in Malaysia that also talks about role of private company in country’s development and management. Privatization is different with nationalism, which is a process of increasing government controls and involvement in economy. The basic for this, privatization is about certain government authority and investment to private sector. Based on the Malaysia Privatization Policy, there are five main objectives to be achieved which are
  • to relieve the administrative and financial burden of the government,
  • improve the effectiveness and quality of the public services,
  • encourage the spread of private entrepreneurship in the public sector,
  • division of resources,
  • contribute to the attainment of the goals set for the New Economic Policy (NEP).

Subsequently, Prime Minister Dato Seri Dr. Mahathir Mohamad announced the government’s decision on a policy of privatization. He stressed the danger of the government becoming a burden to the people it serve. Thus, privatization is set in motion. After nearly three decades of doing this policy, we should be gained the expected benefits of this policy. This is easy to analyze because there are a lot of private company came out from this policy. So, in order to decrease the scope of discussion we choose to talk about public utilities only in term of technological and economic efficiency.....



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