1. 1 Enhancing Institutions and Improving Regulation: The Malaysian Case Shankaran Nambiar Research Fellow Malaysian Institute of Economic Research

2. 2 Outline l Good regulation and institutional strategy l Institutional strategies in Malaysia l Way forward

3. 3 Regulation & Institutional Strategy l Competition to be protected rather than competitors l Other important considerations: –Natural monopolies –Health and safety standards –Income inequalities –Regional disparities

4. 4 Good Regulation l Transparency l Public Input l Costs and benefits l Performance criteria l Process and organisational flow

5. 5 Malaysian Experience l Privatisation of Telecommunications –Government decision-maker and arbitrator in deciding number of competitors –The Communications & Multimedia Act 1998 grants extensive powers to Minister –Minister acts on recommendations made by Malaysian Communications and Multimedia Commissions (MCMC) and directs MCMC

6. 6 Malaysian Experience l Privatisation of Hospital Support Services (HSS) –Regulator (Kawalselia) operational after privatisation of HSS –Kawalselia had 8 staff (124 government hospitals in Malaysia) –A third party (SIHAT) monitored work on the ground instead of Kawalselia

7. 7 Malaysian Experience l Competition Policy –No competition law and policy –Only laws for consumer protection (particularly, for standards, distributive trade and financial sector) –Communications and Multimedia industry has laws covering competition

8. 8 Malaysian Experience l Government Procurement –Not adequately transparent and rule- based –No provision for appeal and contest –No transparency in selection criteria –Appeal to New Economic Policy

9. 9 Way Forward l APEC as an instrument for institutional reform l APEC: non-formal & non-binding; so voluntary cooperation possible l Can benefit from experience of developed countries (US, Australia, NZ) as well as developing countries (Thailand, Indonesia)

10. 10 Way Forward l Possible initiatives through APEC: –Exposure, capacity-building, training for governments –Training, exchange programmes, empowerment for NGOs and think-tanks

11. 11 Thank You