Malaysia Privatization Analysis

Privatisation is the process of transferring an enterprise or industry from the public sector to the private sector. The public sector is the part of the economic system that is run by government agencies. In Malaysia privatisation was make known to at the correct stage in the country’s growth. It no doubt that the basis of privatisation was in keeping with current economic thinking. The justification for privatisation is based on the premise that governments should confine themselves for governing and not to interrupt into running business. There are few factors for this argument, which is the undesirability of a large bureaucracy, the inefficiencies of centralised planning and the crowding–out of private investment .The implementation of

Privatization is different with nationalism, which is process of increasing government controls and involvement in economy. The implementation of privatisation requires that proper institutions be established in order to avoid practices that will result in inefficiencies and welfare losses. The implementation of privatisation in Malaysia may well have suffered from the lack of a well-defined institutional framework. The absence of any consideration for intentions that could have overseen the execution of privatisation led to the inappropriate implementation. This policy is proposed by Tun Dr. Mahathir when he publicized the government intention to apply on a privatization policies. This policy represents the latest approach in national development and to improve other national policy. The implantation of this policies is to develop or to increase the economical role of the private sector companies in the development of Malaysia Company. In Malaysia privatisation can be found in power sector. Such as, Tenaga Nasional Berhad(TNB). The National Electricity Board was corporatised in 1990 as Tenaga Nasional Berhad (TNB) and therefore privatized on the Kuala Lumpur Stock Exchange, with the Ministry of Finance holding around 70% of the shares. The Sabah Electricity Board was privatized in 1998 as Sabah Electricity Sdn. Bhd., with TNB as the significant shareholder, while the Sarawak State Government stripped half of its value in SESCO to the private division in the late