Privatizing the welfarist state: health care reforms in Malaysia

In Malaysia, the shifting balance between market and state has many nuances. Never a significant welfare state in the usual mold, the Malaysian state nonetheless has been a dominant social and economic presence dictated by its affirmative action-type policies, which eventually metamorphosed into state-led indigenous capitalism. Privatisation is also intimately linked with emergence of an indigenous bourgeoisie with favored access to the vast accumulation of state assets and prerogatives. Internationally, it is conditioned by the fluid relationships of converging alliances and contested compromise with international capital, including transnational health services industries. As part of its vision of a maturing, diversified economy, the Malaysian government is fostering a private-sector advanced health care industry to cater to local demand and also aimed at regional and international patrons. The assumption is that, as disposable incomes increase, a market for such services is emerging and citizens can increasingly shoulder their own health care costs. The government would remain the provider for the indigent. But the key assumption remains: the growth trajectory will see the emergence of markets for an increasingly affluent middle class. Importantly, the health care and social services market would be dramatically expanded as the downsizing of public-sector health care proceeds amid a general retreat of government from its provider and financing roles.