PRIVATIZATION Privatization in Malaysia, Regulation, rent-seeking and policy failure

232 Index41, 50, 65, 71–2, 77, 191; in MAS 147,157; in Proton 160, 187; see alsopatron–client networksPeremba 52, 74perverse incentives see incentivesPetronas 166, 171, 178political business 67, 69PPP see public–private partnershipPrime Utilities Bhd 84, 90, 97–8,100–101, 200,primitive accumulation 7principal agent theories 10–11private ownership 1, 7, 10–12, 20, 27,133, 159, 187; see also property rightsprivatization in Malaysia: background53–58; beneficiaries 5, 41, 55, 67, 71–4;characteristics 52–3, 55, 57, 65, 72–3,127–8, 151, 159, 190; contracts 52, 53,55, 57, 72–3, 79, 112–13, 134, 198;failure 5; modes 53–55, 57, 61, 73;motivations for privatization 5, 41–52;performance 58–64privatization: and the creation ofcapitalists 3, 8, 15, 17, 28, 31;conditions for successful privatization2, 3–4, 6, 8–10, 16, 18, 21–4, 27, 33–7;motivations for privatization 7–10,16–18, 26–7; reasons for failure 2, 3,7–10, 18–22, 24–5, 28–9; theoreticalproblems 13–15, 21–3, 25; theory 1, 2,7–12, 14, 17profit guarantees 90, 98, 199Projek Usahasama Transit RinganAutomatik see PUTRAproperty rights: absence of clearlydesignated property rights 13–14, 18;allocation/reallocation of 3, 25–6, 28,31, 33, 40, 157, 194; clearly designated7; and efficiency 10–11, 13;safeguarding 19–20protection 25, 70; under the NEP 46–8,69; in Malaysia 42; under privatizationin Malaysia 65, 190–1; for Proton 74,76, 159–161, 167–8, 173–4, 179–180,182–3, 187, 193–4, see alsocompetitivenessProton: background 76, 163–6; Camproengine 170, 174, 176, see also Gen-2;excise duties 163, 165, 168, 175, seealso import duties, protection; exports76, 160, 171–3, 179, 181, 186, see alsocompetitiveness; financialperformance 167–9, 172, 176, 185–6;Gen-2 174, 176, see also technologyacquisition and catching up; importduties 165, 173, 183, see also exciseduties; market share 161, 174, 176,178–9, 184–6; production 165, 167–8,170–2, 179–181, 185; profitabilitysee Proton financial performance;Saga 165, 181, 184; sales 164, 168, 170,179–180, 184–5, see also Protonexports; Satria 166, 174, 178; Waja174, 176, 178, 184Proton City 171, 184; see also ProtonProton Edar 179, 185; see also USPDPUB see Prime Utilities Bhdpublic choice theories 10–11, 17, 66, 104public enterprises see SOEspublic–private partnership 14, 188PUTRA: background 76, 112–14;construction and delivery 117–19;fares 118, 120; financial performance120–2; financing 115–16; ridership120–1; state loans 116R&D see technologyrace riots 41, 66Railtrack 108–110rate of return: for IWK 79, 92; for LRT108–9, 121redistributive policies (Malaysia) seeNEPregulation: broader definition of 2–4,13–14, 18, 25, 27–8, 34; effectiveregulation 3, 6, 9, 18, 25, 34–7, 189,195; of IWK 76, 79–82, 95–6, 103–5;of LRT 111, 128–130; of MAS 138,141; under privatization 3, 8, 11–12,14–15, 19–22, 24–5, 194; ofprivatization in Malaysia 53, 57–8, 65,71–3, 75, 190; of Proton 76, 159, 183;of subsidies 8, 16, 18, 25, 28, 188–9,196; of urban rail 107–8; price capregulation 196; rate of returnregulation 196; regulatory capacity 9,18, 25, 27, 35–6, 189; regulatorycapture 19, 23, 29; regulatoryconstraints 17, 18, 27, 29, 33, 188;regulatory independence 19, 24, 34regulatory see regulationrenationalization 28; of IWK 79, 104; ofLRT 107, 111, 113–14, 201; inMalaysia 5, 39, 53, 59; of MAS 134–5,140, 147, 149, 154–7, 193; of Proton161, 167, 176, 179, 182, 186Renault 174, 176Renong 60, 112, 114, 116, 125, 200–1