Asian-Pacific Economic Literature  Vol.  6  No.  2
November 1992,  pp.  42-68.
Privatization  in  the  Asian-Pacific  Region
Ng  Chee Yuen and  Toh  Kin Woon
Since the early and mid-l980s, there has been
a  significant redirection of economic policies
in the Asian-Pacific region towards exposing
the public sector to competition. This has been
particularly evident among the four member
countries of the Association of Southeast
Asian Nations (Indonesia, Malaysia, the
Philippines and Thailand), and the Newly
Industrialized Economies (NIEs) comprising
South Korea, Taiwan and Singapore, where
increasing attention has been given to
privatization, deregulation and liberalization.
The other NIE, Hong Kong, has  a  vibrant
private sector, with little state involvement or
public enterprise. In Hong Kong, therefore,
the issue  of  exposing state enterprises to
greater competition in the market place has
not arisen.
To push ahead with privatization,
committees to draw up guidelines and
design master plans were set  up  within the
various countries in the region. In Singapore,
a Public Sector Divestment Committee was
established in January 1986 and charged with
the responsibility  of  'formulating a program
for the divestment of government-linked
companies [and looking into the privatization
of statutory boards] and to make recommen-
dations on the implementation of the program'
(Singapore 1987). In Malaysia, guidelines on
privatization were drawn up in 1985 (Malaysia
1985). Accordingly, the Fifth Malaysia Plan
(1986-1990) gave 'an even greater role to the
private sector to provide dynamism in the
economy'.  Th~s  was followed in February 1991
by the release of the country's Privatization
Master Plan wherein the techniques  of
,
privatization were specified and the services
and entities to be privatized and restructured
identified.
In the Philippines, the Asset Privatization
Trust was set up to divest  a  wide range of
public enterprises, particularly those
nationalized during the Marcos years
(Philippines 1987:section D11 [a-b]). In
Indonesia, the government has placed the
main emphasis on deregulation rather than
on disposing of assets (Pangestu and Habir
1989, Habir 1990a, Conroy and Drake 1990,
Parker 1991, Milne 1991a, 1991b, Pangestu
1991, Simandjuntak 1991).
Interest in greater reliance on market
forces was not confined to the market
economies of ASEAN and the NIEs. Even
the centrally planned socialist economies of
the region were involved in what was, for
want of  a  better term, increased marketization.
China has dismantled the People's Communes
and reverted to family farming. Several
Special Economic Zones offering preferential
measures to attract foreign capital were set
up in 1979 in accordance with the open-door
policy adopted in 1978 (Yasukuni 1991).  This
policy also saw the opening up of fourteen
coastal cities to the outside world in 1984.
Even Vietnam is resurrecting its private traders
and encouraging an increased inflow of
foreign private capital. Increased reliance  on
the market mechanism has thus, with hardly
any exceptions, swept across the entire Asian-
Pacific region. Dick Wilson summed it up
when he said that 'the cult of state collective-
ness is in decisive retreat and the market
economy is being actively encouraged not
42  ASIAN-PACIFIC ECONOMIC LITERATURE November  1992