Privatization without liberalization: Pos Malaysia

In 1992, the Government of Malaysia divested the provision of postal services to a state-owned corporation, Pos Malaysia. Subsequently, in 2001, this was privatized through sale to Phileo Allied, a financial services group, for RM 800 million (Malaysian ringgits).

Although postal services were privatized, the market was not liberalized. Pos Malaysia retained an exclusive license until the year 2035 for delivery of letters weighing less than two kilograms. DHL, Federal Express, and other courier services can compete only for the delivery of heavier items.

Within ten years of corporatization, Pos Malaysia doubled its revenue and profit. It expanded into various new businesses including e-commerce and fulfillment of personal computer sales. Senior General Manager in the Mail Services Division Alawdin remarked, “Contrary to fears that privatization would lead to a reduction of workers,…Pos Malaysia has increased its workforce as it has expanded. It eomploys 14,000 now, compared with 12,000 in 1996.”

Source: S.M. Haja Alawdin bin S.M. Sulaiman, 4th UNI-Apro Postal and Allied Services Sector Committee Meeting, Kuala Lumpur, Malaysia, June 6, 2002 (www.uniapro.org/app026.htm).