Economists: Cabinet should make collective decision on sale of national assets
KUALA LUMPUR,. The Cabinet should jointly and transparently decide the disposal of national assets rather than either the prime minister or finance minister individually, said economists.
They further suggested that the Cabinet decision be non-binding, with the final choice left to the boards of the government-linked companies (GLCs) and government-linked investment corporations (GLICs).
Universiti Tun Abdul Razak Professor Emeritus Barjoyai Bardai told Malay Mail it was “absurd” that any one person could or should have complete authority over such assets due to the complexity of such decisions.
“Even though he is the prime minister, or the finance minister, they can’t decide on the fate of a particular company under any of the GLCs.
“Not one person alone; it’s absurd to think of that,” the economics analyst said.
Finance Minister Lim Guan Eng revealed in an interview last month that the sale of public assets was the purview of Tun Dr Mahathir Mohamad and said the public should “believe in the wisdom of the prime minister”.
Dr Mahathir clarified later that the authority was his by virtue of the Khazanah Malaysia chairmanship.
University of Malaya department of business strategy and policy and economist Professor Mohd Nazari Ismail said the finance minister should not defer the burden to the prime minister entirely.
Citing the principle of collective responsibility, he said the finance minister would already be held accountable for decisions regarding the divestment of public assets and must consequently be able to explain and defend those decisions.
“If he disagrees in principle with a particular decision, he should resign from his post,” said Nazari.
Barjoyai added that no single minister or ministry should ever be accorded the power to unilaterally decide on selling government assets, repeating that this should only be done on the advice of the GLC and GLIC boards.
Nazari went further to suggest that such matters be presented for the consideration of all elected lawmakers, particularly if the sale involved significant or strategic public assets such as the country’s largest toll concessionaire, PLUS Malaysia Bhd.
“All decisions to sell large and vital public assets must be subject to Parliamentary scrutiny and approval,” said Nazari.
Prof Rajah Rasiah of the Asia-Europe Institute in University of Malaya agreed and said the finance minister should prepare a case for Cabinet’s attention before this is shared with federal lawmakers.
“Given the importance of the topic, it should also be approved by the Parliament,” he said.
Clarify guidelines for asset retention
Director of research at the Institute for Democracy and Economic Affairs (IDEAS) Laurence Todd suggested the government spell out its divestment policy aims, one that clearly defines and justifies which assets are deemed as strategic or otherwise.
“I welcome the fact that the government is proposing to divest some of it holdings, but would encourage them to frame a clear policy that can guide this strategy and can command broad support,” he told Malay Mail.
Todd, who also noted that key institutions such Khazanah and Permodalan Nasional Bhd (PNB) that own significant public assets have been transferred to the Prime Minister’s Department, stressed that priority be given to clearly identifying the strategic importance of such assets.
This would guide future decisions on their sale and disposal, he explained.
“If assets are held for reasons of economic development, then clear, measurable objectives need to be set.
“Beyond these clearly defined areas, the government should gradually divest its holdings in Malaysia to promote private sector development,” he suggested.
Todd also pointed out the importance of divesting these assets through targeted privatisation and not direct sale.
Doing so would minimise the risk of concentrating too much economic influence in the hands of selected tycoons that would otherwise be able to steer policy direction, he explained.
“Ultimately the interests of the nation will be best served by a broadly based, competitive capital market and business sector,” he said.