02 September 2011

Should State Government involve in Business?

In Malaysia, we can see a lot of businesses being conducted by state government. Should there be a limit to the extent that state government should involved in? Yes, we know that the state also need money to run their administrations daily operations expenses. But, would it be wise to collect revenue generated by businesses in the state, instead of relying of its own businesses?


Well, doing businesses by state government itself can generate more revenue. This is the case only if the businesses were run successfully and making profits. Otherwise, the businesses' losses were barred by rakyat themselves.

Why we only highlight State Government?

Simply because most of the state government is making losses. In fact, only one state is making profit and still it is highly indebted. By going back to history, we know how that state wrest control of one reputable fast-food chain business, which became its cash-cow now. Then, the money from this cash-cow is spinning around within the group. Is this what we called successful?

Recently, another state government intend to open cafes, convenient shops, and even hardware. There's nothing wrong with that as long as the following criteria was fulfilled:
  1. The right person was being installed into the business
  2. Good governance was being conducted regularly and strictly
  3. Not in conflict with the current and future business owners within the same industry

All Malaysians know that, when businesses were blended with politics, anything can happen (the ugly way). Corruptions, frauds, bureaucracy, is all we already learn from the past. In business, it's very hard to sleep with competitors. To eliminate competition, can I limit the issuance of permit for certain businesses? Can I withdrew the licenses given? Can I stop renewing the licenses when due? Ordinary folks like us cannot, but state government can.

Bush visiting a hardware shops

Fair and Open market is all we want. For me, all the three criteria mentioned above are difficult to abide. If failed, votes will swing the other side. State government should facilitate, understand, and help rakyat to set up their businesses. If all businesses were conducted by governments, we are moving backward to be a communist country.

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