Privatization in Malaysia: Restructuring or Efficiency?

Abstract

This paper discusses the major issues confronting privatization in Malaysia. These include the difficulties encountered in the attainment of the efficiency objective; the conflict between the desire to raise revenue to reduce the fiscal burden of the government and the underpricing of shares; opposition from trade unions; and finally, the conflict between the efficiency objective of privatization and the restructuring objective of Malaysia's New Economic Policy. This discussion is preceeded by a description of the changing economic role of the government and the reasons for the change.