Nationalisation or privatisation: Policy and prospects for public transport in Southeast Asia

Michael W. Roschlau


Numerous investigations of urban transit in Southeast Asia have revealed that the industry is owned and operated by private enterprise, makes few demands on public resources, and provides a very high standard of service. Given the apparent adequacy of existing public transit, this paper examines the reasons for a continued interest in government regulation, state ownership, and foreign involvement at a time when a contrasting set of policies—advocating privatisation and self-reliance—are being promoted in other sectors of Southeast Asian economies. Government intervention is frequently justified on the basis of alleviating traffic congestion, improving productivity and service, reducing air pollution, more comprehensive planning, and economies of scale. In practice, however, few of these objectives have been achieved without substantial costs in terms of direct state subsidies or large-scale foreign borrowing. Therefore, there must be other considerations underlying contemporary policies. Research reported in this paper has found these to be concerned with government aspirations to gain political status by building prestigious projects and monuments, elimination of ‘traditional’ forms of public transport in favour of a more ‘Western’ image; a political desire to exert stronger control over the industry; and foreign pressure to export sophisticated products and services. Whereas the effects of such policies do not appear to be in the interest of the population as a whole, since they contribute to unemployment, to higher public transit fares and taxes, to increased economic instability and to reduced mobility, they do remain the realities underlying policy and prospects for public transport in Southeast Asia.