PRIVATISATION IN SINGAPORE : PROCESS, PACE AND IMPLICATIONS

Abstract

Privatisation has become a worldwide trend since the early eighties. In both communist and non-communist countries, developed and under-developed countries, privatisation is being practiced to some extent. So, is privatisation in Singapore part of the global trend? The aim of this paper is to discuss the nature and meaning of privatisation in Singapore, the pace of privatisation and the implications of privatisation on the various sectors of the economy.

Privatisation is a term which can be defined in a number of different ways. Chapter I discusses the different meanings of privatisation, the major forms of privatisation and the common reasons for privatisation in other countries.

Chapter II examines the nature and meaning of privatisation in Singapore. Public enterprises in Singapore are generally well run and efficient. The overall budget balance for the government sector has been in surplus from 1968 to 1986. In 1987, due to a "one-off" debt service payment, it was estimated that government would have a budget deficit of $3,206 million. However, we need to take this figure with a pinch of salt because government so far has always overestimated its budget deficit and hence the actual case is always a budget surplus. In other words, privatisation in Singapore is neither revenue oriented nor is it to bail out ailing enterprises. What then are the reasons for privatisation Singapore? Why is it that the government needs to privatise its SOEs? Chapter II will provide the reader with an answer. In the same chapter, the characteristics or the unique features of privatisation are dealt with.

Chapter III focuses on the progress of privatisation to date. The characteristics of GLCs that were being privatised are examined. Besides privatisation of ownership, there are other forms of privatisation like privatisation of production, privatisation of financing and liberalisation. To what extent are they bring practised in Singapore? What is the pace of privatisation? And what is the effectiveness and successfulness of privatisation in Singapore? Chapter III seeks to examine the above questions.

In Chapter IV, we examine the implications of privatisation on the economy. More specifically, the financial implications, the implications on local entrepreneurship and the implication on the role of the government. The final chapter summarises the main theme of; this exercise and discusses the future prospects of privatisation in Singapore. It is hoped that through this exercise, a better insight into the nature of privatisation in Singapore can be gained.