Efficient or Equitable Economy?
Wednesday, June 24th, 2009By Herizal Hazri
Herizal Hazri is The Asia Foundation’s Program Director in Malaysia. He can be reached at Herizal@asiafound.org.
I was on my way to University Teknologi Petronas in Malaysia’s Perak state the other day when a colleague of mine, better known as Ali, whilst driving, posed a question to the four passengers: “Why doesn’t the government just shut down PROTON (the Malaysian national automobile manufacturer)? It’s a failure by any international standards and it is an inefficient company. Why must we support an inefficient company?” He then went on to suggest a solution, which is to sell the manufacturing component to multinational car manufacturers like Mazda or Honda, but to retain the sales and delivery units. So, in fact, stick to the downstream selling and after-sales service activities and let the more efficient car companies manage and build the cars. This move, he continued, will also make the account books “cleaner” because you are selling your liability, which in this case is a non-profit making car industry. I interjected at this juncture, “but what will happen to the thousands of workers and their families working in the production plants?” The reply was not unexpected, “Well, the new owners will retain some employees and the rest will just have to find other jobs; I do sympathize with their fates but we have to concentrate on the bigger picture here. In time things will be better, that is the way the market sort itself out, it will find a new equilibrium.”
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