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1. Introduction

In the 1980s the UK government embarked on a radical programme of port privatisation. Despite the claimed advantages, no other European country has followed the British lead although Ireland is adopting a New Zealand style privatisation.¹ In general, while countries have been keen to increase port efficiency and productivity, they have preferred to commercialise and corporatise ports while retaining them in public ownership. However private operators are increasingly dominating the industry. Shipping lines have invested in terminals and a group of multinational port operators has emerged, such as Hutchison International Port Holdings, International Container Services Inc. and P&O Ports. In 2000 the world’s top six private operators are present in about 80 ports and account for over 40 per cent of total container liftings.² The industry has always been a global one but this trend has accelerated since the 1980s, affecting ports the world over.

While port privatisation has become a global phenomenon, the specific path of privatisation in each country is shaped by each country’s institutional and cultural characteristics.³ However, much of the port privatisation literature is characterised by a high degree of universalism, a lack of historical consciousness, and a general inattention to the socio-economic context and networks within which ports are embedded. For example, O. Iheduru maintains that advocates of port privatisation in developing countries ignore the unique features of their political economies: ‘the political economy of each country is different, and as such there is a need to go beyond glittering generalities, and deal with specific cases and conditions.’ ⁴ To be sure, specific cases and conditions can be dealt with in a variety of ways. This paper will argue that a full understanding of port privatisation and its implications can only be achieved by setting that process in the historical context of the economic, political and cultural systems of each country. Nowhere is this approach more relevant than in Asia.

In the 1950s Asian ports were suffering from wartime damage and were run-down and inefficient. In the 1970s containerisation forced major changes and by the 1990s the efficiency of Asian ports had increased enormously.⁵ Rapid economic development, together with changes in trade patterns and competition, has led to Asian ports dominating worldwide container trade. Despite the 1997 Asian economic crisis, which brought a major check to economic growth and port activity, Hong Kong and Singapore are currently the world’s busiest container ports. The aim of this paper is to undertake a case study of Port Klang, Malaysia’s leading port, and the world’s 14th busiest container port.⁶ The port was the first public enterprise to be privatised in Malaysia. Klang provides a valuable case study of privatisation in a sector of vital importance to many developing economies.

Prior to examining the case study, we briefly discuss the broad options for port privatisation that are identified in the existing literature. Some key features of the discourse of port privatisation are noted, principally its ahistorical universalism, culminating in the attempt by A.J. Baird to inject an element of contingency into the debate about the merits of this approach to port reform. We argue that a diachronic narrative approach to writing about port privatisation, with greater sensitivity to issues of path dependence and culture, is needed, rather than the snapshot synchronism that characterises much of the literature. Using such an approach, informed both by the disciplines of economic history and maritime history, we will locate the privatisation of Port Klang in the historical context of both attempts to foster economic growth and the culture and institutions of Malaysia. Malaysia’s Prime Minister, Dr Mahathir Bin Mohamad, is well known for his campaign for the preservation of ‘Asian values’ and they have permeated the relations between state and market in Malaysia. Thus this case study of privatisation also casts light on the path of economic change in a non-Western society. In order to place the contemporary port in context we briefly review the port’s history. We then consider the economic background to privatisation, discuss the privatisation process and assess the outcomes at Port Klang.

2. The discourse of port privatisation

Recent attempts to recognise the role of institutions in economic change and the importance of path dependence appear to have had little impact on the literature on port privatisation.⁷ Unlike maritime historians who have long implicitly and explicitly addressed such issues,⁸ economists continue to approach privatisation in a largely ahistorical manner, displaying little historical consciousness. This is problematical, because economic institutions are subject to reinvention and change through time, and privatisation is but one ‘moment’ in the history of ports. To be sure, the fact that international agencies such as the World Bank are actively promoting port privatisation and neo-liberal government reformers have been predisposed to this practice means that an increasingly global ‘convergence’ of port governance structures is a possibility. However, in the context of such pressures for port reform, a lack of historical consciousness leads to the risk of representing port privatisation as a ‘continual and ineluctable progression towards a single set of practices that in their self-perfection ... [will] ultimately pass into a sphere of transhistorical permanency.’ ⁹ In the course of arguing for a greater sense of history and context in the discourse of port privatisation, this section will review some of the complexities associated with privatisation as an approach – both practical and discursive – to port reform, prior to examining the impact of this trend on Port Klang.

Ports have a high degree of organisational complexity, with areas of port authority responsibility, direct government responsibility and private responsibility. In many countries, ports have tended to be publicly owned because they are natural monopolies and public ownership can, at least in theory, prevent the ports exploiting monopoly rents. Other motives behind public ownership include variously the difficulties of private interests undertaking costly investments of a long term nature, the desire to prevent or perhaps create preferential treatment between different port users (for example, cheaper charges for exports), and the desirability of coordinating the activities of a port with the needs of its hinterland. However, the powers and responsibilities of port authorities as public bodies vary widely, ranging between the extremes of ‘landlord’ and ‘comprehensive’.¹⁰ On the one hand, a landlord authority exercises overall control over the port and plans its development but allows private enterprise to undertake most activities within the port. On the other hand, a comprehensive authority may undertake all, or almost all, the activities within the port, including employing the workforce and carrying out the service of stevedoring (loading and unloading vessels). It is interesting that Hong Kong and Singapore, two of the world’s most efficient ports, fall respectively into the first and second categories. Most ports, of course, fall somewhere between these two extremes.

Large public enterprises such as ports have been a primary target of neo-liberal reforms. In the 1980s governments in many Western countries adopted three approaches towards reforming port authorities: commercialisation, corporatisation and privatisation. These approaches overlap, and in the case of privatisation in particular, there is a complex array of combinations and permutations, which this term encompasses. Thus it is important to clarify the meaning of the terms. Commercialisation typically involves clarifying the objectives of port authorities by requiring them to operate on a more commercial basis.¹¹ Commercialisation can range from reforms to improve efficiency and profitability to requiring ports to be ‘financially independent’ from the state, as in West Africa.¹² Corporatisation, on the other hand, involves the transformation of government enterprises into separate corporate entities with clear objectives, the establishment of a Board whose members are appointed on the basis of their expertise, and ‘managers who are given commercial objectives and the powers to raise funds on private capital markets’.¹³ The establishment of clear accountability arrangements is a key part of this process. An important requirement for corporatisation is the presence of competitive neutrality, that is, a situation where the public enterprise faces exactly the same market conditions as competing organisations in the private sector.

Privatisation, in its ‘purest’ form, involves the sale of state assets to the private sector. However, the term also encompasses increases in the level of private sector involvement in ports by means such as transferring control or management of a state-owned enterprise to the private sector (through leases, for example).¹⁴ Thus, in the case of ports, a range of means of achieving privatisation exists, from the leasing of container terminals to private operators, a practice that is common in Australia, to the establishment of joint ventures, through to innovative ‘public private partnerships’ as have recently developed in planning at the port of Rotterdam.¹⁵ Notwithstanding the different forms, the trend towards privatisation is attended by a burgeoning literature that extols the virtues of port privatisation. This literature ranges from academic analyses,¹⁶ to private consultancy reports,¹⁷ to documents from international agencies like the World Bank.¹⁸ Often this literature merely repeats the standard refrain of the general benefits of privatisation.

A common rationale for privatisation is the ‘widespread belief that the private sector is inherently more efficient than the public sector.’ ¹⁹ The purported advantages of private ownership stem from the discipline imposed by the need to generate profit, which means that a private firm ‘may have stronger incentives to be more cost conscious, efficient, and customer orientated than a public enterprise.’ ²⁰ Private sector investors and managers have greater financial incentives to act in a commercial manner than their public sector counterparts, and ‘inefficient private enterprises are automatically eliminated by market forces.’ ²¹ Also, privatisation is said to increase the efficiency with which resources are allocated, by eliminating the distortions associated with decision-making processes in the public sector.²² However, in the developing economies there may be an element of ‘coercive isomorphism’ in the spread of port privatisation,²³ as the World Bank and IMF make privatisation a precondition for funding.²⁴

To the extent that a considerable proportion of the discourse of port privatisation is characterised by a largely ahistorical and universalistic, ‘one size fits all’ approach,²⁵ a different approach is called for.²⁶ The universalism is problematical because studies of a number of countries (England, Australia, and West African states) show that ownership structures are not the most significant impediment to better port performance.²⁷ This demonstrates the problems of applying a generic model of privatisation to ports in different institutional contexts.

A.J. Baird has tried to inject an element of contingency into the debate over port privatisation, by constructing a Port Function Privatisation Matrix, which takes account of the organisationally complex nature of ports and displays the range of privatisation options available to port reformers.²⁸ This framework identifies three primary functional activities of ports, each of which may be privatised. First, there is the ‘landowner function’, which involves authorities having control of property rights extending into the water, planning port development, providing public goods such as navigational aids, breakwaters and dredged entrance channels, and providing and maintaining basic port infrastructure such as wharves and berths. Second, there is the ‘regulatory function’ of ports, which is usually vested in public port authorities, involves regulating externalities such as pollution and congestion and promoting the general efficiency of the port.²⁹ Third, there is the ‘port utility function’, which is primarily one of providing cargo-handling services. The different possible combinations of these activities are illustrated in Table1.

Table 1: Port Function Privatisation Matrix

	PORT FUNCTIONS
PORT MODELS	Regulator	Landowner	Utility
PUBLIC	Public	Public	Public
PUBLIC / Private	Public	Public	Private
PRIVATE / Public	Public	Private	Private
PRIVATE	Private	Private	Private
Source: A. Baird (2000) ‘Port Privatisation: Objectives, Process and Financing’, Ports and Harbors, March, p.15.

The most common approach in the world’s leading container ports is the PUBLIC/private model, wherein the private sector assumes responsibility for cargo handling.³⁰ However, this model masks the fact that, within the port utility function, the private sector may or may not be involved in investing in and providing port superstructure (container cranes, for example). To be sure, the PUBLIC/private model allows for private investment in port superstructure. Arguably, however, for the benefits of this model to be fully realised, at least those benefits that derive from the improved decision-making and risk assessment that is associated with the private sector, investment decisions must be under the control of the private operator.³¹

By outlining the panoply of approaches to privatisation, based on the different levels of involvement of the private sector in ports, Baird adopts a more ‘contingent’ approach to port privatisation, wherein ‘the decision regarding which model to adopt ultimately depends on the specific circumstances and priorities in each country.’ ³² While Baird has performed a useful task in constructing this matrix, his approach is also largely ahistorical and de-contextualised. He merely replaces one generic privatisation model with four generic models, selecting ports the world over to illustrate these different approaches. However, it is only in the context of a particular society and culture that that ‘circumstances and priorities’ regarding port privatisation emerge over time, and it is as important to analyse these as it is to identify the generic approaches to privatisation. Similarly, given the isomorphic (non-rational) dimensions, and ideological and political dimensions of privatisation, it is vitally important to understand ‘the place of any particular privatization in the privatizing country’s program.’ ³³ While it clarifies some of the complexities associated with port privatisation, Baird’s model thus provides only a starting point in analysing this phenomenon in particular countries, which must be supplemented by a more institutionally and culturally situated form of analysis.

A truly ‘contextualised’ analysis would,³⁴ for example, look at differences ‘in expectations regarding the functioning of ports’, whether as ‘an economic instrument to promote trade and attract transport flows’, or ‘as a socio-economic instrument for the region’ or the community.³⁵ These expectations form historically within the economic, political and cultural configurations of particular countries. In turn, these differing expectations mean that particular models of privatisation may have different meanings in different contexts – one model may be contested in some countries, whereas it is largely uncontroversial in others. Also it is important to recognise that the variety of actors that comprise port domains (including government reformers, firms, trade unions, and shippers) may respond differently to port privatisation, and influence and shape both the process and the outcomes of privatisation.³⁶ To the extent that port domains comprise multiple actors, as T. McDonald notes in another context, analytically ‘the goal...is a fully contextualized actor, understood as socially and culturally constructed, embedded in the matrix of local relations of power and conflict [amongst others] but also fully capable of action within that context.’ ³⁷ By the same token, port domains vary widely as ports evolve, so that attention must be given to the way in which ports differ within a particular country.

H. Stevens argues that the predominant economic literature on the ‘administrative structure of seaports’ focuses primarily ‘on the existing and desired division of ownership and scale’; while important, these ‘administrative criteria ... provide no insight into the contextual relationships within which port activities take place.’ ³⁸ For reasons both of national cultural diversity and local difference, and due to the fact that port domains (the ‘contextual relationships’ within which ports are embedded) develop over time, it is important to engage in an analysis of port privatisation that is culturally situated, locality-based, and grounded historically. The case study of Port Klang, to which we now turn, will be approached in this manner.

3. A Malaysian Case Study

In the quarter century following the adoption of the New Economic Policy (NEP) in 1971, Malaysia’s gross domestic product grew at an average of 7 per cent per annum, making it one of the fastest growing economies in Asia. Malaysia has become a successful global exporter of manufactured goods: they increased from 11 per cent of total exports in 1970 to 60 percent in 1990. The Malaysian middle class has grown both in size and affluence. Thus by the 1990s Malaysia was approaching the status of a newly industrialising economy.³⁹

Malaysia needs to minimize transport costs throughout the entire transport chain in order to remain internationally competitive. Ships carry about 90 per cent of Malaysia’s international trade and therefore its ports serve as vital points of exit and entry for exports and imports. These ports are spread along a long coastline of about 3,500 kilometers (including Sabah and Sarawak), which flanks the Melaka Straits/South China Sea, one of the world’s major sea routes. Prior to the Asian economic crisis in 1997 rapid economic growth saw Malaysian ports ‘close to bursting at the seams’.⁴⁰ Table 2, which provides a snapshot of infrastructure and trade at Malaysian ports in 1995, suggests that both Klang and Johor were operating at full capacity. The total tonnage of trade handled at Malaysian ports in 1995 was 152.3 million tonnes, comprised of 20 per cent general cargoes, 40 per cent liquid bulk cargoes, 15 per cent dry bulk cargoes and 25 per cent containerised cargoes. Port Klang, Malaysia’s leading port, and the first to be privatised, handled 26 per cent of total tonnage and 1.1 million TEUss or about 53 per cent of total container traffic.

Port Klang, formerly Port Swettenham, is located on the west coast of Malaysia, at the mouth of the Klang River, about 40 kilometres from Kuala Lumpur, the country’s capital. The port is located in a sheltered position to the east of the offshore islands of Pulau Kelan and Pulau Lumut. The port’s hinterland covers the industrial area of the Kelang Valley and the majority of the rest of Peninsular Malaysia, extending to South Perak in the north and Gemas in the south. The port is divided into two main areas about 4.8 kilometres apart: South Port the original port area; and North Port, which opened in 1964. A new port development on the island of Pulau Lumut, known as Westport, opened in 1994.

Table 2: Infrastructure and cargo handled at Malaysian ports, 1995

Port	No. of berths	No. of cranes 1	Capacity (million tonnes)	Throughput (million tonnes)
Port Klang	40	16	40.2	40.0
Pulau Pinang	16	9	23.2	16.7
Johor	14	6	15.6	16.5
Kuantan	11	2	8.7	4.2
Kemaman	4	3	7.9	2.6
Bintulu	7	-	31.9	18.6
Sabah 2	27	-	9.5	16.3
Sarawak 3	23	7	11.0	14.5
Others 4	31	8	26.1	22.9
Total	173	51	174.1	152.3
Notes: 1 Includes gantry and multipurpose cranes 2 Kota Kinabalu, Tawau, Lahad Datu and Sandkan 3 Kuching, Miri and Rajang 4 Inludes Teluk Ewa, Kuala Perlis, Kuala Kedah, Tanjung Bruas, Lumut, Port Dickson and Labuan.
Source: Seventh Malaysia Plan, 1996-2000, (Kuala Lumpur, 1996), p. 353.

Development of the Port of Klang

Until 1880, when it was replaced by Kuala Lumpur, Klang was the capital of the state of Selangor. Located 12 miles up the winding and muddy Klang River it was far from an ideal location for a port. Captain Brown of Penang described his experience with the port as follows:

In my time you rushed your ship up the stream on top of the flood tide, with parrots screaming among the rigging, and the crocodiles lying like a guard of honour on either shore. The river was too narrow for a ship to turn. The manoeuvre, if that is not too neat a word, necessary to bring the ship’s head round for the return journey, was to charge the mud bank, then, with the bow fixed, let the tide sweep the stern round, and back out. When the water was high the bow went far into the jungle amid the protesting monkeys and parrots, and the look-out men skipped and squealed as hornets’ nests, dislodged from the trees, fell on the deck.⁴¹

In the 1880s only ships drawing less than 13 feet of water could use Klang’s jetties.⁴² By the 1890s the increasing volume of trade was creating demands for the development of a port at a site on the coast. In 1895 Kuala Lumpur was made the capital of the Federated Malay States (FMS) and for political and economic reasons was reluctant to rely on Penang or Singapore and wanted its own port.⁴³

Work started on construction of a new port at the mouth of the Klang River in 1896. By 1900 one passenger jetty, three wharves and a railway connection to the capital were ready for use. The FMS Railways department was made responsible for port administration. The new port was officially opened on 15 September 1901 and named Port Swettenham, after Sir Frank Swettenham, the High commissioner for the Malay States.

During the first few months’ operations almost came to a complete standstill due to the outbreak of Malaria; vessels were diverted to Penang or Singapore. Draining the swamps eventually overcame this problem. After much reclamation work a town developed and by 1902 it was optimistically claimed that ‘the dismal swamps of past days has been transformed into one of the healthiest and busiest places within the confines of the State.’ ⁴⁴ But a lack of adequate charts of the approaches to the port prevented large vessels from using it and a lack of rolling stock to move cargo between the port and capital caused delays. By 1903 there were 10 tongkangs (sailing barges) to lighter cargo to and from ships and improved availability of rolling stock.

Lighters were widely used in Asian ports. Apart from loading and discharging ships at anchor avoiding congested berth capacity, they played a key role in the transhipment of cargo especially in entrepôts such as Singapore. Cargo for export, for example, was loaded into lighters from small coastal vessels for transit storage until brought alongside the overseas vessels. While this involved double handling of cargo, given low labour costs and the relative paucity of shore based facilities, it was an economic practice. The introduction of containerisation in the 1970s drastically reduced their usefulness in major ports. In 1983 the Singapore government, which was embarking on an environmental clean up, banned them from the Singapore River and by the mid 1990s less than 100 were still in use at the Port of Singapore.⁴⁵

In 1901 1611 steam vessels of 463,238 tons and 239 native craft of 5,781 tons used Port Swettenham. Most of the larger vessels were ships of the British India Steam Navigation Company, which averaged 3,300 tons. After 1907 ships called direct from Europe instead of via India, including P&O vessels. It was hoped that development of its own port and direct overseas services would enable the FMS to avoid ‘the charges of the middlemen in Singapore and Penang,’ but most cargoes continued to be transshipped via Penang and Singapore.⁴⁶

In 1898 the trade of Selangor, (which was then handled at Klang), was only about 60,000 tons but by 1910 Port Swettenham handled 131,285 tons. Prior to 1906 the main exports were tin, timber and copra and the main imports rice and opium. The export of rubber commenced in 1907 and it quickly became a major export. But this expansion caused congestion in the port. Work on new wharves started in 1912 and by outbreak of the First World War Port Swettenham was equipped with two berths for ocean steamers and three for coasters.

The port was not popular with the major shipping lines because it was still relatively shallow and tended to silt up. Also, the approaches were tricky for large vessels to navigate. An inquiry in 1931 recommended that future expansion should occur to the north to take advantage of the deeper waters of the North Klang Straits but the North Port facility did not open until 1964. To compensate for the limitations of the original site, the Eastern Shipping Conference imposed a surcharge of 12s 6d per ton on goods (other than rubber) above rates at Singapore and Penang. The surcharge remained in force until 1934. Its belated removal helped boost trade recovery from the 1930s depression. The port was severely damaged during the Second World War and all the lighter fleet was sunk. After the war the British began the task of repairing and refurbishing the port but progress was slow and the work was not completed until 1952.

The major ports of the region by this stage were Singapore, Penang, Port Dickson, Port Swettenham, Tumpat and Malacca. Excluding Singapore and the minor port of Tumpat, all of the ports are located on the west coast. An extensive network of coastal shipping carried cargoes to and from the smaller ports to the entrepôts of Singapore and Penang. Singapore, then as now, dwarfed all ports in the region.⁴⁷ Following the adoption of the steamship and the opening of the Suez Canal in 1869, and aided by its freeport status, it quickly became the trade and commercial centre of Southeast Asia and a major crossroads for international transport. Table 3 illustrates the dominant position of Singapore in 1950 both for modern vessels over 75 nrt and native vessels (the bulk of those under 75 grt).

Table 3: Coastal shipping between Malayan ports, 1950

Port	Vessel arrivals over 75 nrt	Vessel arrivals 75 nrt and under
Singapore With cargo In ballast	118,157 3,951	168,638 63,060
Penang With cargo In ballast	51,539 425	130,711 10,450
Malacca and Port Dickson With cargo In ballast	108,074 0	45,295 0
Port Swettenham With cargo In ballast	83,238 0	25,105 0
Tumpat With cargo In ballast	33,149 0	5,844
Source: N. Ginsberg and C. F. Roberts, Jr., Malaya (Seattle, 1958), pp.115-6

By 1980 the ports of Peninsular Malaysia handled 16.2 million tonnes of cargo, about double the volume handled in 1970. ⁴⁸ As Table 4 shows, cargo handled at the Port of Klang increased from 3.8 million tonnes to about 10 million tonnes over the same period, an increase of 163 per cent. According to the government, the capacity of the port increased from 4.4 million tonnes in 1970 to 8 million tonnes in 1980, implying that port capacity failed to keep pace with demand.⁴⁹ The explosive growth of port activity has continued: between 1980 and 1990 cargo handled increased by 121 per cent to 22.1 million tonnes; by 1995 cargo handled had reached a record 40 million tonnes.

Even with major expansion programmes the ports have struggled to cope with the increased traffic generated by Malaysia’s rapid economic growth. After the Second World War, Klang, in common with many other Asian ports, was suffering from run-down infrastructure, lack of handling equipment, congestion and low productivity.⁵⁰ In the 1950s deepwater facilities at Klang were limited and lighters still handled almost half of all cargo. The most spectacular post-war innovation for the handling of non-bulk cargo was containerisation, but its lumpy, capital-intensive nature made it a costly and risky investment for ports in developing countries.⁵¹ Malaysia was, however, able to obtain aid from the British and multilateral lending agencies to help finance port expansion.⁵² At Port Klang container facilities, roll-on roll-off facilities, dry bulk terminal and other infrastructure was built in the 1970s. The funds for the container terminal, which cost US$39.4 million, were obtained from West Germany, Japan and the UK (63 per cent) and the remainder (37 per cent) from government sources.⁵³ Klang first received containers in 1973. Container throughput increased from 41,900 TEUs in 1974 to 134,500 in 1980. By 1994 the port was handling 944,000 TEUs and the container facility was operating at 146 per cent of its design capacity.⁵⁴

The Asian financial crisis, which began in Thailand in mid-1997, interrupted Malaysia’s economic growth and impacted upon cargo volumes. But while conventional cargo and bulk cargoes were severely reduced, in 1997 container TEUss increased by about 20 per cent to 1,685,000. By 1999 Port Klang handled about 2.6 million TEUs and was the 14 th largest container port in the world.

The Asian crisis led to greater urgency to government attempts to reduce trade diversion to Singapore. In the 1960s Singapore handled 44 per cent of Malaysia’s ocean trade, Penang 38 per cent and Port Klang handled only 18 per cent.⁵⁵ After Singapore withdrew from the Malaysian Federation in 1965, the government encouraged the development of publicly owned and operated ports in order to reduce dependence on Singapore. But Klang and other regional ports such as Jakarta, struggled to ‘emancipate themselves from Singapore’s hegemony.’ ⁵⁶ An enduring problem is that the Malaysian government has no control over the networking arrangements of international shipping companies.⁵⁷ In 1973 the Port of Johor was opened at Pasir Gudang on the southern tip of the Peninsula, only about two steaming from Singapore, to provide an alternative port for southern Malaysia.⁵⁸ Most of the original exports were low value cargoes such as palm oil but the addition of container facilities in the late 1970s broadened the port’s appeal. By 1995 it was handling about 303,000 TEUs, still only a fraction of Singapore’s trade.

In 1993 the government introduced a load centering policy designed to increase the proportion of local cargo handled by national ports and a free trade zone was established at Port Klang to encourage its use as a transhipment centre for the Bay of Bengal region. But in 1998 more than one third of Malaysia’s external trade totaling M$400 billion was still handled by Singapore. The Government threatened to use the force of law to compel shippers to use Malaysian ports, especially Port Klang. One problem with this policy is that 80 percent of manufactured exports are from foreign owned companies, including Singaporean ones, which would not respond favourably to coercion. Ancillary services such as road haulage need to be improved if Klang is to capture market share and increase its status as a regional hub port. ⁵⁹

The development of the port was the outcome of a complex process in which many organisations and actors, both public and private, played a role. In line with usual practice in the British Empire,⁶⁰ autonomous statutory authorities were established to control the ports of Penang and Singapore, but Port Swettenham continued to be administered by the Railway authority. An advisory board was created in 1911 to give users a voice in the administration of the port but it was powerless. Users complained that the railway administration was not sympathetic to the needs of the port. In 1952 a Ports Division of the Railway administration was created under a Port Manager to give the port greater autonomy and the following year a Port Swettenham Board with wider user representation replaced the Advisory board.

Where a railway department later inherits a port there is a natural tendency to subordinate the needs of the port to those of the railway. In the case of the Port of Fremantle, for example, in the gold rushes of the 1890s, the Railway Department’s lack of understanding of the specialised needs of merchants and shippers contributed to a great ‘blockage’ at the port. The demands for a more unified system of port administration and control led in 1903 to the creation of the Fremantle Harbour Trust.⁶¹

In 1963 the government finally responded to the complaints of port users and created the Port Klang Authority (PKA) to administer the port. It was financially autonomous but under the control of the Ministry of Transport. The PKA was responsible for raising all funds for port development and consistently made profits. But by the 1980s PKA and the other Malaysian port authorities had become under close bureaucratic control and enjoyed little effective autonomy and managerial freedom. This contributed to low port efficiency and productivity. ⁶²

Table 4: The growth of trade at Port Klang, 1911 to 1995

	Tonnes
Year	Imports	Exports	Total
1911	207,894	37,570	245,464
1920	184,211	68,317	252,528
1930	372,413	139,091	511,504
1939	384,590	152,568	537,158
1950	423,188	305,199	720,387
1960	*	*	*
1970	1702463	2103154	3,805,617
1980	5851529	4103097	9,954,726
1990	*	*	22,100,000
1995	*	*	40,000,000
* Data unavailable for these years

Background to privatisation in Malaysia

When Britain granted Malaysia independence in 1957, ⁶³ plantation rubber agriculture and tin mining dominated the economy. In 1960 40 per cent of the GDP came from agriculture and less than 10 percent from manufacturing. The new government adopted a policy of promoting the growth of manufacturing industry. Industrialisation since the 1950s has occurred in four phases:⁶⁴

1. Import-substituting industrialisation (ISI) from the late 1950s to the 1960s
2. Export -orientated industrialisation (EOI) from the late 1960s
3. ISI, involving the growth of heavy industry, in the first half of the 1980s
4. EOI from the second half of the 1980s

The ISI policy was in vogue amongst development economists in the 1950s but by the mid 1960s the limitations of this approach had become apparent and the Malaysian government switched to EOI growth.⁶⁵ This policy switch coincided with the introduction of the New Economic Policy (NEP) in 1971. The NEP was introduced after serious race riots in May 1969 and was designed to improve inter-racial relations and national unity. A key objective of the NEP was to give Malays (Bumiputras) a greater share of the nation’s wealth. Public enterprises were used as a vehicle for restructuring ownership of assets in favour of Bumiputras and so this policy led to the rapid expansion of the public sector. Public sector outlays grew from 36 per cent of GDP in 1970 to 53 percent in 1982. ⁶⁶

In the early 1980s the Mahathir government reverted to ISI in an attempt to promote heavy industrialization. Under the Malaysia Incorporated Policy, which was developed as part of Mahathir’s ‘Look East’ Policy, government intervened extensively in the economy.⁶⁷ A number of government corporations undertook large investment projects in the automotive, petrochemical, steel and cement industries. But many of these performed poorly and the deficits of public enterprises contributed to a soaring public sector deficit. By 1987 the total accumulated losses of Malaysia’s 625 public enterprises came to M$2.3billion.⁶⁸

According to Gomez and Jomo, the poor performance of public enterprises was mainly due to poor management and a lack of financial discipline: the downside of rapid public sector expansion under the NEP was ‘a bloated bureaucracy, inferior services, economic inefficiency, high cost, low productivity and limited innovation’.⁶⁹ In addition, political power in Malaysia is concentrated in the hands of Prime Minister Mahathir’s United Malays National Organization (UMNO), which provides scope for rent seeking behavior. Malays could more readily obtain government contracts, business licenses, concessions and loans from government controlled financial institutions. The practice evolved whereby they linked up with Chinese entrepreneurs but once the government contracts were obtained left the Chinese to actually run the businesses.⁷⁰ Thus the Bumiputra policy created a Malay rentier class. Nevertheless, while the Bumiputra policy may have reduced economic efficiency it did not stop the economy from growing strongly.⁷¹

The pressure to reduce the public sector deficit increased in the mid 1980s due to falling export prices and worsening trading conditions. Furthermore, Malaysia was under increasing pressure from international agencies such as the World Bank, Asian Development Bank and International Monetary Fund, to increase private sector involvement in the economy. In 1983, doubtless influenced by the privatisation polices of Britain’s Margaret Thatcher, the government reversed course, rejected its past policy of promoting public enterprises and embraced privatisation.

The Malaysian government gave the following reasons for its privatisation programme: ⁷²

1. Relieve the financial and administrative burden of the government in undertaking and maintaining a vast and constantly expanding network of services and investment in infrastructure
2. Promote competition, improve efficiency and increase the productivity of services
3. Stimulate private entrepreneurship and investment to accelerate the rate of growth
4. Reduce the presence and size of the public sector, with its monopolistic tendencies and bureaucratic support, in the economy
5. Contribute towards meeting the objectives of the NEP, especially as Bumiputera entrepreneurship and presence have improved greatly since the early days of the NEP and they are therefore capable of taking up their share of privatised services.

A Privatisation Master Plan (PMP) introduced in 1991 elaborated further on the government’s objectives and identified a broad range of privatisation measures to be used including sale of assets, sale of equity, lease of assets, management buy-out, build-own-operate and build-operate- transfer.⁷³

Privatisation of Port Klang ⁷⁴

The port’s container terminal was chosen as the first candidate for privatisation for two main reasons. First, it was profitable and not in a politically sensitive area and so could serve to generate support for further privatisation. Second, the port was inefficient by world standards with continuous complaints about congestion, low productivity, and pilferage. The KPA complained that it was hamstrung from operating as an efficient commercial enterprise by bureaucratic controls and lacked real autonomy.

In 1983 Prime Minister Mahathir authorised the privatisation of the container terminal. A new company, Klang Container Terminal Sendirian Berhad (KCT) with capital of $500 million, wholly owned by KPA, was created and private companies were invited to bid for 51 per cent of the company. The winning bid came from a joint venture company Konas Terminal Kelang Sendirian Berhad (KTK) between Kontena Nasional Sendirian Berhad (KNSB) and P & O Australia Ltd to acquire 51 per cent of KCT’s shares. KNSB, a trucking company, owned 80 per cent of the shares and P&O Australia Ltd the other 20 per cent.

The purchase of its share in the Klang container terminal in 1986 was P&O Australia’s first venture into international port management. P&O claimed it identified many problems including management lacking clearly defined reporting lines, inadequate operating systems, low productivity, high equipment down-time, poorly trained staff, a lack of formal training and safety programmes, under-utilised yard capacity and slow clearance and collection of containers.⁷⁵ After seven years it sold its shares for a profit and the success of Klang helped to develop its reputation as a port manager. It now manages ports in 12 countries.⁷⁶

The government was concerned that employee support be obtained so as to prevent opposition to future privatisations. After protracted negotiations between the port authority, Civil Service Union and the management of the new company, the workers were offered the choice of redundancy, remaining employees of the KPA or resigning from the KPA and becoming employees of KTK ‘on overall terms and conditions no less favourable than those currently enjoyed.’ All workers were guaranteed employment for the first five years even though about 15 per cent of the workforce was surplus to requirements. 99 per cent of the workforce opted to join the new company enabling the port authority to shed about 800 workers. When the five-year no-lay-off agreement was close to ending port workers, concerned about security of employment, formed the Malaysian National Federation of Port Workers to improve their bargaining power. ⁷⁷

Another concern was to ensure that the privatisation agreement complied with the NEP. This was achieved by Permodalan Nasional Bhd (National Equity Corporation) a government trust agency established in 1974 to expand Bumiputra share ownership, becoming the major shareholder in the local partner of the joint venture, Kontena Nasional. KCT was listed on the Kuala Lumpur Stock Exchange (KLSE) in 1992.

The privatisation of the remainder of the port proved to be a drawn-out affair mainly due to the problem of finding a partner to join Kontena Nasional in forming a new company, Kelang Port Management (KPM). In the end Kontena Nasional abandoned its search for partner and in 1992 the remaining operational services, including pilotage, were sold to the wholly Kontena Nasional-owned KPM.⁷⁸ The new Westport facility being built by the KPA was privatised in September 1994 and is now owned by a variety of Malaysian interests including funds, government, and private companies.⁷⁹

The KPA itself was corporatised by the Port Authority (Privatisation) Act 1990. In common with corporatised ports the world over, it retained regulatory powers and responsibility for overall port planning and development. But unlike the majority of corporatised ports, it was granted extensive controls over the private sector operators. Private operators have to be licensed by the KPA and the Minister has the power to suspend or revoke the licenses of the operators. The KPA sets performance standards and has to approve tariff changes. The licensed operators must regularly supply the KPA with detailed statistical information on their operations. Private operators have freedom of management but it has to ‘be tempered by ... appreciation of the requirements of the Statutory Authority and the Government.’ ⁸⁰ One explanation for this approach is that it provides a potential framework for preventing the abuse of market power; however, it is more likely that the government wanted leverage to ensure that operators toed the line with government policy, especially with regard to the NEP.

Performance since privatisation

Assessing the gains from privatisation requires analysis of the impact on the economy at large as well as the port. There is no doubt that the whole privatisation programme generated considerable savings for the government. Between 1983-1995 proceeds from sale of equity and assets totalled M$21.5 billion, savings in capital expenditure M$72.8 billion and 96,756 employees were transferred to the private sector.⁸¹ But although privatisation led to a reduction in government involvement in the economy, if shares owned by the government’s trust agencies such as National Equity Corporation are included the reduction was less dramatic than implied by the above data. In the case of the Klang container terminal, except for the shares initially owned by P & O (Australia), all the agencies that owned KCT were government owned (Klang Port authority and Kontena Nasional). The latter is a wholly owned subsidiary of Perbadanan Nasional Bhd (Pernas), a company owned by the government.⁸² Between 1991 and 1995 24 privatised companies, including KCT, were listed on the KLSE and about 46 per cent of shares were allocated to approved Bumiputra investors and institutions, 11 per cent to the employees of privatised companies and 43 per cent to the Malaysian public. By 1995 the privatised companies accounted for 22.1 per cent of the total market capitalisation of the KLSE. ⁸³ Many shareholders took advantage of the opportunity to realise short-term capital gains and sold their shares. The sale of shares in KCT and other privatised companies has, however, led to a dilution of Bumiputra equity: between 1983 and 1990 it declined from 65 per cent to 38 per cent of total paid up capital on the KLSE.⁸⁴

It has been suggested that there has not always been full and balanced reporting on the success of privatisation. Consistent underpricing of shares and other practices have led to the accusation that ‘privatization is primarily a means for rent capture under Government auspices and patronage.’ ⁸⁵ Most of the enterprises selected for privatisation such as Port Klang, the airlines and the telecommunications company, enjoy an element of natural monopoly power. Policy failed to recognise that, as far as allocative efficiency is concerned, the degree of competition rather than ownership is the crucial issue.

Turning to the specific issue of Port Klang, it is well known that measuring and assessing port performance is a complex exercise and to be meaningful requires a suite of performance indicators.⁸⁶ Unfortunately, data limitations preclude such detailed analysis of Port of Klang in the 1980s. It is necessary to stress that the data in Table 5 refers only to the container terminal privatised in 1986 and not to the port as a whole. Table 5 indicates that privatisation has led to significant efficiency gains.⁸⁷ The improvement in the rate of crane handling from 19.4 containers per hour in 1985 to 27.3 containers per hour in 1987 brought Klang close to Singapore’s then performance of 28.0 containers per hour. Average turnround time fell by 16 per cent to 11.3 hours. KCT made a profit of M$ 0.7 million and M$ 2.1 million respectively in its first two years of operation. But due to the agreement saddling the private sector with the existing staff there was little scope for reducing staff numbers in the first five years. Most importantly, following privatisation the Port of Klang had three private container terminals, so competition for port business increased.

Table 5: Performance of the Klang Container Terminal

Indicator	Before privatisation 1985	After privatisation 1987	% Change
Average container throughput (TEUss)	244,120	275,700	+12.9
Crane handling rate per hour (TEUss)	19.40	27.3	+40.7
Turnround time (hours)	13.4	11.3	-15.7
Sources: Salleh, ‘Port Klang, Malaysia’, p. 379.

In July 2000 two of Port Klang’s container operators (KCT and KPM) merged to form Northport Corporation Berhad.⁸⁸ Table 6 shows the effect of the restructuring. It is of interest that Northport Corporation is still effectively under state control as the major shareholder is Permodalan Nasional Bhd, a government trust agency. While the Malaysia Incorporated Policy has taken a backseat to privatisation, it is clear that the state has not abandoned its interventionist stance.

Table 6: North Port Restructure 2000

The successful privatisation of Klang was followed by the corporatisation and privatisation of Johor (1993 and 1995 respectively); the corporatisation of Bintulu in 1993; and the corporatisation of Penang in 1994. Kuantan port was privatised in 1998 without going through the corporatisation stage. The government is currently considering listing the shares of Penang Port Sdn Bhd on the Stock Exchange instead of privatizing the port operating company, as was the case with other federal owned ports. This is one way of dealing with the numerous interests contending for the ownership of the port and will probably raise more revenue for the government.⁸⁹

One drawback with privatisation is that there now limited national coordination in port development. In order to maintain standards, protect the interests of consumers and improve coordination, the government proposed setting up separate administrative bodies to regulate ports, water, power, telecommunications, road and rail. But cautious of a burgeoning administrative structure, currently it appears to favour a single agency to oversea all privatized utilities.⁹⁰ Meanwhile the government relies on ad hoc intervention. In 1998, for example, the Transport Minister ‘advised’ the Ports of Kernaman and Kuantan to avoid duplication of functions and antagonistic competition.⁹¹

Conclusions

This paper has been based on the premise that much analysis of port privatisation has been universalistic in nature and neglected issues of path dependence and culture. While not denying the importance of global forces, it is suggested that national institutions and values have shaped the form and pattern of privatisation. In order to undertake a more contextualised assessment, we have undertaken a case study of port privatisation in Malaysia.

In the 19 th and 20 th centuries, public enterprises were established in Malaysia to control natural monopolies such as ports, in common with the practice elsewhere in the British Empire. Following independence in 1957, Malaysian ports struggled to cope with rapidly expanding trade, and did not have a good reputation for efficiency. Since the introduction of the NEP in 1971, ports and other public enterprises in Malaysia have also been entrusted with the task of redistributing the nation’s wealth in favour of the Bumiputras. But mounting losses and international pressure for reform led the government to reverse course in the 1980s and promote privatisation. The main argument for privatisation has been that public ownership has been a barrier to increasing efficiency in the port sector.

The case study of Port Klang, the first public utility to be privatised, suggests that privatisation has led to increased efficiency. The success of Port Klang has encouraged the government to privatise other ports. But although Malaysia now appears to fit Baird’s PUBLIC/private model, the state has not completely abandoned its ownership role. Privatisation policy has had to conform to the overriding requirements of NEP and the majority of shares in the ‘private’ companies are held by government agencies. Thus the main effect of privatisation has been to reform the operating environment so as to increase commercial flexibility and freedom.⁹² Privatisation Malaysian style not only illustrates the way in which culture and institutions shape policy but also confirms the view that it is sound management and a competitive environment rather than ownership that is the key to port efficiency.

The Asian economic crisis has highlighted a need for greater transparency in relations between the state and the private sector; it is apparent that while progress had been made Malaysia still has a way to go to satisfy the requirements of the IMF and other international agencies.⁹³ This paper, however, suggests a skeptical attitude towards direct attempts to transplant institutions – whether of privatisation or corporate governance – from one culture to another.

Map of Asia

Map of Port Klang

Footnotes

1. Fairplay, April 3, 1997, 21. For a discussion of the New Zealand approach to port reform see M. Tull and J. Reveley (2000) Microeconomic Reform and the Economic Performance of Ports: A Comparative Study of Australian and New Zealand Seaports. International Business Research Institute Working Paper No. 6, Faculty of Commerce, University of Wollongong.
2. Fairplay, April 13, 2000, 24.
3. For a general discussion of the influence of culture and institutions on economic growth see K. Yoshihara, Asia per capita. Why national incomes differ in East Asia, (Singapore, 2000).
4. Iheduru, O. C. (1993) Rethinking Maritime Privatization in Africa, Maritime Policy and Management, 20, 1, p. 32
5. K. Trace, ‘Asean ports since 1945’, in F. Broeze, (ed.), Gateways of Asia Gateways of Asia: port cities of Asia in the 13th-20th centuries, (New York, 1997), p.318.
6. 1999 data.
7. For a recent survey see W. Kasper and M. E. Streit, Institutional Economics. Social order and public policy, (Cheltenham, U.K., 1999).
8. See F. Broeze (ed.) Maritime History at the Crossroads: A Critical Review of Recent Historiography, (St. Johns (NF), 1995).
9. C. Sabel and J. Zeitlin, ‘Stories, Strategies, Structures: Rethinking Historical Alternatives to Mass Production’ in World of Possibilities: Flexibility and Mass Production in Western Industrialization, Camridge University Press, Cambridge, 1997, p.3.
10. Goss, R. O. (1990) Economic policies and seaports: 2. The diversity of port policies, Maritime Policy and Management, 17 (3), 221-234.
11. Steering committee on National Performance Monitoring of Government Trading enterprises (1998) Government trading enterprises performance indicators, Melbourne; 1998, p. 34.
12. Iheduru, Rethinking Maritime Privatization, p.36.
13. Ibid, p.45.
14. V. Errunza, S. Muzumdar and A. Sy, ‘Privatization Options’ in C. Cooper and C. Argyris, The Concise Blackwell Encyclopedia of Management, Blackwell Business, Oxford, 1998, p.515.
15. Van Ham, J. C. and Koppenjan, J. F. M. (2000) Public Private Partnership in Port Development: Assessing and Managing Risks, Paper Presented at the Fourth International Research Symposium on Public Management, Rotterdam, 10-11 April.
16. For example, see J. Eyre (1990) Maritime Privatization, Maritime Policy and Management, 17, 2, 113- 121; T. Heaver (1995) The Implications of Increased Competition Among Ports for Port Policy and Management, Maritime Policy and Management, 22, 2, 125-133.
17. New Zealand Business Roundtable and Federated Farmers of New Zealand Inc. (1989) Ports and Shipping Reform in New Zealand: Current Developments and Future Requirements.
18. J. Lethbridge and Z. Ra’anan (1991) ‘Port Administration: Private vs Public Sector’, Infrastructure Notes, Transport No.PS-5, The World Bank Group; J. Lethbridge (1990) ‘The Use of Outside Contractors for Port Maintenance’ Infrastructure Notes, Transport No. PS-2, The World Bank Group.
19. Gómez-Ibáńez, J. and Meyer, J. (1993) Going private: The international experience with transport privatization. Washington DC, The Brookings Institute, p. 3.
20. Ibid.
21. Stretton, H. and Orchard, L. (1994) Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government. The MacMillan Press Ltd, Houndmills, p. 80.
22. Iheduru, Rethinking Maritime Privatization, p.34.
23. The term ‘coercive isomorphism’ refers to ‘external pressure exerted on organizations to adopt structures, techniques, or behaviours similar to other organizations.’ R. Daft (1998) Organization Theory and Design, South Western, Cincinatti, p.542.
24. Iheduru, Rethinking Maritime Privatization, p.32.
25. Ibid., p. 47.
26. We note, parenthetically, that in countries which have adopted a full complement of neo-liberal policies, like New Zealand, port privatisation has been accompanied by the emergence of generic management career path. Managers of port companies in New Zealand often have no experience in the industry, which constrasts sharply with previous practice within the maritime sector. The assumption is that good managers will be good managers irrespective of industry, as the managerial techniques of outsourcing, downsizing and the like are applied to ports.
27. R. Saundry and P. Turnbull (1997) ‘Private Profit, Public Loss: The Financial and Economic Performance of U.K. Ports’, Maritime Policy and Management, 24, 4, 319-334; S. Everett and R. Robinson (1998) ‘Port Reform in Australia: Issues in the Ownership Debate’, Maritime Policy and Management, 25, 1, 41-62; Iheduru ‘Rethinking Maritime Privatization’.
28. Baird, A. J. (2000) Port Privatisation: Objectives, Process and Financing, Ports and Harbours, March, 14-19.
29. Goss, R. O. (1990) Economic policies and seaports: 4. Strategies for port authorities, Maritime Policy and Management, 17 (4), 273-287.
30. A. J. Baird (2000) ‘Privatisation Defined; Is it the Universal Panacea?’ http://www.worldbank.org/html/fpd/transport/ports/con_priv.htm accessed 4 June 2000.
31. This point is drawn from a seminar, ‘Choosing Roles for Privatisation: The Case of Urban Public Transport’, delivered by Dr Gordon Mills at the University of Wollongong, 25 May 2000.
32. Baird, Privatisation Defined.
33. S. Avgeropoulos, ‘Privatization’, in C. Cooper and C. Argyris, The Concise Blackwell Encyclopedia of Management, Blackwell Business, Oxford, 1998, p.515.
34. See R. Locke and K. Thelen (1995) ‘Apples and Oranges Revisited: Contextualized Comparisons and the Study of Comparative Labour Politics’, Politics and Society, 25, 3, 337-367.
35. H. Stevens (1999) The Institutional Position of Seaports: An International Comparison, Kluwer Academic Publishers, Dordrecht, p. 302, 303.
36. Selsky and Memon define a port domain ‘as a complex system encompassed by the presence of port facilities and surrounding communities, plus the interactions among organisations, interests, communities and individuals concerned with the operation, management or governance of a port.’ J. Selsky and P. Memon (1999) Institutional Arrangements and Emergent Domains: Comparative Dynamics in Urban Port Domains, Paper Presented at a Workshop on Interorganizational Collaboration at University of Melbourne, 15-16 December, p.3.
37. T. McDonald, Introduction, p. 10.
38. Stevens , The Institutional Position of Seaports, p.4.
39. R. Trood and D. McNamara, (eds.), The Asia-Australia survey 1995-96, Melbourne, 1995, p.302.
40. Fairplay, 17/10/91, p. 24.
41. W. Blain, Home is the sailor: the sea life of William Brown, Master Mariner and Penang Pilot, (London, 1940), p.126. Cited by K. G. Tregonning, Home Port Singapore. A history of Straits Steamship company Limited 1890-1965, (Singapore, 1967), p.31.
42. This account of the early years draws on M. B. Jamaluddin, A history of Port Swettenham, Singapore Studies on Borneo and Malaya, No. 3(Singapore, 1963).
43. K. G. Tregonning, Home Port Singapore. A history of Straits Steamship company Limited 1890-1965, (Singapore, 1967), p.32.
44. Jamaluddin, A history, p. 7.
45. See S. Dobbs, ‘An ecological history of the Singapore River: with particular reference to the lighterage industry’, unpublished PhD thesis, (Murdoch University, 1999), pp. 41-2.
46. L. K. Wong, ‘Singapore: its growth as an entrepot port, 1819-1941’, Journal of Southeast Asian Studies, vol IX, No.1 1978, p. 71.
47. For a valuable study of Asian ports and port cities see F. Broeze, (ed.), Brides of the Sea. Port cities of Asia from the 16 th -20 th centuries, (Kensington, NSW, 1989).
48. Fourth Malaysia Plan 1981-1985, (Kuala Lumpur, 1981), p. 319.
49. Fourth Malaysia Plan 1981-1985, p.320.
50. R. Robinson, ‘Regional ports: development and change since the 1970s’, in T. R. Leinbach and Chia Lin Sien, South-East Asian transport. Issues in development, (Singapore, 1989), pp. 136-8.
51. For a general discussion of the impact of containerisation see ‘Containerisation of shipping services in the developing ESCAP region: progress, problems and issues,’ Economic Bulletin for Asia and the Pacific, vol., XXXIII, No.1 (June 1982), pp. 83-91.
52. K. Trace, ‘Asean ports since 1945’, p. 325.
53. Robinson, ‘Regional ports’, p.151.
54. Economist Intelligence Unit, Country Profile, Malaysia and Brunei, 1995-96 (London, 1995), p. 28.
55. S. Everett and R. Robinson, ‘Port privatisation in Malaysia: lessons to be learned?’ in APEC congestion points study, 2 vols, vol 2 (Singapore, 1997), p.150.
56. F. Broeze, ‘The ports and port system of the Asian seas: an overview with historical perspective from c.1750’, Great Circle, 18, No. 2.(1996), p. 88.
57. Robinson, ‘Regional ports’, pp. 162-3.
58. Fairplay, 17/10/91, pp.24-6.
59. Lloyd’s List International, 31/7/98, p.5.
60. See F. Broeze, P. Reeves and K. McPherson, ‘Imperial ports and the modern world economy: the case of the Indian Ocean,’ The Journal of Transport History, VII(1986), pp. 1-20.
61. M. Tull, A community enterprise: the history of the Port of Fremantle, 1897 to 1997, (St. John’s, Newfoundland, 1997), pp23-4.
62. Everett and Robinson, ‘Port privatisation in Malaysia’, p. 151.
63. The complex administrative arrangements for British rule in the Malay states are summarized below. The British acquired the island of Penang in 1786, the island of Singapore in 1819, Malacca in 1824, and the three became known as the Straits Settlements. Following the Treaty of Pangkor in 1874, the British began extending their influence over the mainland states. In 1896 Perak, Negri Sembilan, Selangor and Pahang became the Federated Malay States (FMS) with the federal capital located at Kuala Lumpur. In 1909 the northern states of Kedah, Perlis, Kelantan and Trengganu came under British control and in 1914 Johore, the last independent Malay state, was also brought into the fold of the British Empire. These latter five states became known as the Unfederated Malay States (UMS). In 1948 the Straits Settlements, FMS and UMS were joined into the Federation of Malaya. The British granted Malaya independence in 1957. In 1963 Singapore, which the British had separated from mainland Malaya after the war, together with Sarawak and Sabah (British controlled territories in northern Borneo) joined the Federation. After some political difficulties, Singapore left the federation in 1965 to develop as an independent state.
64. K. S. Jomo and C. Edwards, ‘Malaysian industrialisation in historical perspective’, in K. S. Jomo (ed.), Industrialising Malaysia. policy, performance, prospects, (London, 1993), p.18.
65. For a general discussion of ISI and EOI see, for example, A. Chowdhury and I. Islam, The newly industrialising economies of East Asia, (London, 1993), ch.5.
66. I. Md. Salleh, The privatisation of public enterprises: A case study of Malaysia’, in G. Gouri, (ed.), Privatisation and public enterprise. The Asia-Pacific Experience, (New Delhi, 1991), p. 598.
67. For a discussion of the ‘Look East’ policy and Malaysia Incorporated see Jomo, U-Turn, ch.6.
68. Woon T. K., ‘Privatisation in Malaysia. Restructuring or efficiency? Asean Economic Bulletin, vol 5, No. 3(March 1989), p. 245.
69. E. T. Gomez and K. S. Jomo, Malaysia’s political economy. Politics, patronage and profits, (Cambridge, 1997), p.75-6.
70. For a controversial analysis of Malay/Chinese relations see Mahathir bin Mohamad, The Malay dilemma, (Singapore, 1970).
71. Yoshihara, Asia per capita, pp.90-3.
72. K. S. Jomo, U-Turn? Malaysian economic development policies after 1990, (Townsville, 1994), p.71. See also I. Md. Salleh, ‘The privatisation of public enterprises: a case study of Malaysia’, in G. Gouri, (ed,), Privatisation and public enterprise. The Asia-Pacific Experience (New Delhi, 1991), pp. 595-633.
73. Ibid., p.72.
74. This section draws on I. Md. Salleh, Port Klang, Malaysia: a privatisation case study’, in G. Gouri, (ed,), Privatisation and public enterprise. The Asia-Pacific Experience (New Delhi, 1991), and Everett and Robinson, ‘Port privatisation in Malaysia’.
75. S. Cass, Port privatisation. Process, players and progress, Cargo Systems Ltd., (London. 1996), p.140.
76. Business Review Weekly 14/7/97, p.84.
77. Fairplay, 9/7/98, p. 12.
78. Fairplay, 13/5/93, p. 34.
79. Fairplay, 17/9/98, p. 45.
80. M. Rajasingam, ‘Privatisation-changing the organisational culture’, paper presented at 1 st Asian Port Management Conference, ‘Privatisation, new technology and beyond’, Kuala Lumpur 18-19 September 1991. Cited by Everett and Robinson, ‘Port privatisation’, p.153.
81. Seventh Malaysia Plan, 1996-2000, p. 206.
82. Woon T. K., ‘Privatisation in Malaysia. Restructuring or efficiency? Asean Economic Bulletin, vol 5, No. 3(March 1989), p.245.
83. Seventh Malaysia Plan, 1996-2000, p. 212.
84. Ibid., p. 210.
85. Jomo, U-Turn? p.77. See also Gomez and Jomo, Malaysia’s political economy, pp 91-8.
86. See M. Tull, ‘The Fremantle port Authority: a case study in microeconomic reform’, Economic Papers, vol 16No. 4, 1997, pp.41-4.
87. Data in the Seventh Malaysia Plan, 1996-2000, (Kuala Lumpur, 1996), p. 208 gives more spectacular increases but the time periods are not specified.
88. The Star, 1/5/00, p.32.
89. The New Straits Times, 6/3/2000, p. 27.
90. Lloyds List, 20/12/99.
91. The New Straits Times, 15/8/98, p. 12.
92. Cass, Port privatisation, p.100.
93. There is a huge literature on the Asian crisis. See, for example, R. McLeod and R. Garnaut, (eds.), East Asia in Crisis. From being a miracle to needing one? London, 1998) and K. S. Jomo, (ed.), Tigers in trouble. Financial governance, liberalisation and crises in East Asia, (London, 1998).