This article first appeared in The Edge Financial Daily on October 10, 2018

KUALA LUMPUR: The Pakatan Harapan administration believes in the notion that “the business of the government is not to be in business”, said Finance Minister Lim Guan Eng.

He said the country will see programmes “designed in part to unleash the private sector’s full potential”. “The previous administration talked about a private sector-led economy. But the new administration will walk the talk,” he added.

The government, he said, wants to “kill two birds with one stone” by developing a robust private sector and “reducing the crowding-out effect caused by government investments”.

“There have been numerous complaints ... that our capital market is too illiquid, controlled effectively by several government-linked investment companies,” he said.

“Let me repeat what I said — we heard you. We will reduce the government’s direct participation in the equity ownership of companies, so the private sector can take the lead.

“We will also be able to gradually realise the value of government-owned assets and use these proceeds to pare down our debt obligations,” he added.

Guan Eng’s statement is in line with Prime Minister Tun Dr Mahathir Mohamad’s view of wanting entities such as Khazanah Nasional Bhd to pare down their stakes in companies to encourage higher private participation in businesses — in this case, in the form of equity participation.

Guan Eng also highlighted that the government is working out the future mechanism for infrastructure projects. He touted a “true public-private partnership (PPP)” model that will, among others, enforce the public auction of government land to reflect a more accurate value, and open tenders to avoid price mark-ups.

“The new PPP model can be applied to all PPP projects still awaiting approval, as well as new projects in future. There will be no cancellation of PPP projects ... they will be continued, but under a different format and mechanism,” he said.