Sunday, August 16, 2009

Should we privatise or nationalise Malaysian water services? New publication.

Malaysia Think Tank

Press statement

16 August 2009


This week (16 – 22 August 2009) is World Water Week ( To mark this global event, the Malaysia Think Tank is publishing the report "Water Provision in Malaysia: Privatise or Nationalise?", with support from the International Policy Network, a global research organisation based in London.

The report is attached, and is available for free download from


"Water Provision in Malaysia: Privatise or Nationalise?"  looks at what we can learn from the global successes and failures of water management. Our aim with this report is to make clear that the priority for any public policy, including the management and provision of water, must be the general public good. Policymakers need to put in place the policy that is best for the public, not the one that best suits their personal, political or ideological agenda. 


Especially when it comes to critical resources like water, the ultimate goal must be to find who can best deliver an effective water supply at the best value for money for consumers.


The report argues that:

§  The purpose of privatisation, ultimately, is to allow healthy competition in the supply market to replace harmful monopoly. But, in the case of past Malaysian privatisations, what was dubbed "privatisation" failed to create competition. The lopsided agreements and exclusive rights granted to politically-connected firms meant that the monopoly remains. The poor way in which privatisation has been carried out turned many Malaysians against the privatisation of national assets or public utilities, especially when it comes to a vital resource like water. But there is actually a strong case for challenging the total state management of water.


§  The experience of Chile, which is discussed at length in this report, shows how the emergence of a water market in Chile has brought greater and better water provisions to its citizens. A discussion about Bolivia's failed attempt to privatise their water services is also presented.


§  Campaigns for state-ownership of water provision facilities by anti-privatisation activists only result in a staunch defence of the corrupt or incompetent. These ideologically-driven campaigns inadvertently benefit the rich cronies, who continue to abuse their positions in state-owned or state-linked corporations, at the expense of the poor who are denied choice. 

§  To improve the quality of water provision in Malaysia, what we need is a relaxation of regulations that prevent competition in the water market. There should be more than one service provider so that the providers compete to provide us, the rakyat, with the most efficient service at competitive prices. We should have the choice of which service provider we want to buy from, not being ordered around by politicians who think they know best.


§  If Prime Minister Najib is serious about his economic liberalisation agenda, then liberalisation of the water industry is one area that he needs to look into. We know from Malaysia's own experience that state intervention in the market, including in the water industry, usually results only in corruption and cronyism. True and proper liberalisation – not a repetition of faux-privatisation like before – can help reduce corruption and cronyism.


§  Liberalisation, if accompanied by greater competition and choice, ultimately benefits the consumer. On the other hand, monopoly, be it by the state or private sector, will only deny the citizens of Malaysia the right to choose what is best for themselves. Only through a truly free water market can power be taken away from self-interested politicians and their cronies in state-owned companies and private corporations, to be vested back into the hands of the rakyat.



Wan Saiful Wan Jan

Director General

Malaysia Think Tank

F6 Taman Tunku, Bukit Tunku

50480 Kuala Lumpur, Malaysia

Tel: +44 7920 132233





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