Infrastructure Development in Malaysia

At independence Malaysia inherited a reasonably well-developed set of infrastructure facilities. The Government built on the initial stock of infrastructure and all categories of infrastructure have since expanded manifold and facilities have also been modernised. By and large the Malaysian Government has succeeded in meeting the growing demand for infrastructure. The Government has also made considerable progress in making infrastructure available in the less developed parts of the country. The development of infrastructure has required very large investments. The infrastructure sector has received the largest share of public sector development expenditure in every one of the Malaysia Plans. However from the early 1990s because of resource constraints faced by the public sector, among other reasons, the Government has encouraged and facilitated private sector participation in infrastructure development. In the more recent period the private sector has been investing more in infrastructure than the public sector. Inspite of the success achieved in the development of infrastructure there are many areas where policy formulation and implementation can be improved. The formulation of medium-term plans for all segments of the infrastructure sector is one area where the Government needs to act. Such plans will help avoid ad hoc project selection. There should also be a clearer specification of the areas for private sector participation in infrastructure development and all privatisation exercises should be through an open tender bidding process. Also more rigorous project evaluation is necessary to avoid 205 costly project failures. Other areas for improvement include better monitoring of performance of service providers. A new policy also needs to be formulated to promote public transport in urban areas. Finally, the development of infrastructure in the less developed parts of the country should be accorded higher priority.