KUALA LUMPUR: First it was the public utilities. Now even the civil service, or at least parts of it, may go private too.
Prime Minister Tun Dr Mahathir Mohamad said the government was already considering a move to privatise some areas of the public sector in an effort to slim down its “bloated” civil service.
At the same time, “unnecessary and irrelevant” agencies would be closed down.
He did not say which departments or agencies would be affected, but there have been reports that the Customs and Excise Department, RTM and Bernama are among those recommended for privatisation.
In an immediate reaction, Cuepacs said it would reject such a move.
Its president Datuk Azih Muda said the majority of public servants belonged to essential services bodies such as the military, police and other enforcement agencies that could not be handed over to private hands.
He said there was also no assurance that the civil servants would receive similar salaries and perks in the privatised entities.
During question time at the Dewan Rakyat today, Mahathir recalled that in 1983, the government introduced a privatisation policy that led to a bigger role for the private sector in the country’s development.
At the same time, he added, the government managed to reduce its financial burden, improve work quality, stimulate economic growth and distribute resources more equitably.
“The successful privatisation of Telekom Malaysia is a good example. Its employees were transferred to a private company, thereby reducing the size of the civil service. On top of that, the staff enjoyed a better salary package,” he added.
Mahathir said the government felt that the strategy was still relevant to address the problem of a bloated civil service that came with “burdensome financial implications”.
However, he also acknowledged that unemployment would rise considerably if the government did not take measures to cushion the impact of privatisation. One measure the government could take was to have those affected be given jobs the private sector, he added.
In line with that, he said, the government would ensure that there were job opportunities in the different sectors of the economy for those affected before launching any plan to downsize the civil service.
“We will have a holistic plan so it does not have a negative impact on the administration of the country,” he said.
The civil service has expanded from one million personnel in 2003 to 1.7 million today.
“This costs the government too much in operating expenditure, thereby reducing allocations for development,” Mahathir said.
“If not managed properly, the economy could slow down.”
He blamed the previous administration for the increase in government spending. “They constantly raised civil servants’ salaries to buy their loyalty,” he said.
He said those who were placed in the irrelevant agencies were being paid too high but their services were no longer needed now.
“We will only hire new staff or increase civil servants’ salaries when there is a need for that,” the prime minister added.
Former prime minister Datuk Seri Najib Razak said privatisation did not necessarily guarantee success. He cited the corporatisation of Malaysia Airlines as an example of privatisation gone wrong.
“We privatised MAS during Mahathir’s first tenure as prime minister. Later we had to reacquire it at the same price,” he said.
Najib said a proper analysis should be undertaken before any plan to downsize the civil service was implemented. However, he said he did not have an issue with laying off people in positions already considered redundant.
