the __earthinc

Member of Parliament for Rembau, Khairy Jamaluddin yesterday repeated the accusation he made at a forum organized by Chevening alumni association last week. He said that Pakatan Rakyat is being hypocritical about its criticism of government policy regarding highways and independent power producers. As he pointed out, PR opposes these policies to the point that they want to nationalize those highways and power plants but at the same time, the Selangor state government holds shares in those private companies which operate the assets in Selangor. So, the state government enjoys dividend from the investment.

First off, I oppose government involvement in these matters and I balk at nationalization. At the same time, I dislike monopoly. These two concerns force me to adopt a gray area because while these highways and power plants are now operated by private companies (the definition private is increasingly blurry these days with state funds owning significant shares of these private companies), they were granted excessive monopoly power or overly generous concession at the expense of consumers, especially in terms of electricity generation in the past.

So, I do not want the government, state or federal, to nationalize highways or power plants, and I do want to see those monopoly power granted by the government curb. So, I am stuck. On these matters, I will bark at both both Barisan Nasional and Pakatan Rakyat’s policy. The former is responsible for granting the monopolies and perpetuating the status quo with limited improvement possibly because of political entanglement with the business community and the latter trying to do too much to overcome those monopolies with too much state power.

And I do not really trust BN in fighting PR because BN has proven to oppose PR’s proposal only in words but in action, they would do what PR proposes anyway. Proof: the Eastern Disperal Link in Johor which the government took over and abolished the toll. The EDL has another disturbing dimension to it: it is really a bailout of MRCB by the government. MRCB was in trouble because the government did not have the political will stick to its words. This by far is not the only example.

But, on the issue at hand, I am unsure if it is hypocritical of the Selangor state government to hold a stake in companies operating the same highways and power plants that PR proposes for the government to take over, as Khairy accused.

Would it not be wise for the Selangor state government under Pakatan to own interest in these power plants and highways in Selangor so that the state has a say in the respective companies’ board of directors?

One has to remember that the reason PR proposes to take over these assets is that PR claims that the companies or rather the arrangements which allowed these companies to profit in the first place are burdensome to Malaysians. PR claims that nationalization is a cheaper option to the status quo. As far as I understand it, it is not really about some socialist dream. It is really a matter of which is cheaper, which I think is a technocratic approach. Technocratic in the sense that it is number driven.

I actually am swayed by that technocratic argument but not to the point of nationalizing those private assets. I say so because nationalization is not the only conclusion to that technocratic argument. I am sure if we sit down and think about it, there are multiple ways which any party can achieve so.

One way is to have a say in the Board of Directors of those companies. The state government can voice its discontent over any possible revision to prices charged to consumer. This has its own conflict of interest issue—if one is profit-driven, then the state itself may want to optimize its returns; in this sense, Khairy is right—but like I wrote, it is also a way to influence companies’ decision from within towards the objective of reducing burden to Malaysian consumers.

Is that hypocritical?

On the net, maybe yes, maybe not.

Now, I do not know whether the Selangor state government has a seat in the Board of Directors or if the state does, then whether that rep’s voice is in line with PR’s rhetoric. If Khairy’s accusation is to be credible, I think he has to go one layer deeper to the dynamics of the Board of Directors.