State Owned Enterprises in Southeast Asia

Abstract

State owned enterprises (SOEs) are a pervasive form of firms across most economies in Southeast Asia. Their historical origin, development, and performance are diverse but reflects political and economic development in each country. Conforming with predictions from economic literature, SOEs in Southeast Asia are largely inefficient. Given the political economy behind their existence, reforms and privatization have proceeded slowly. The pervasiveness of SOEs in turn accounts for the low productivity of the aggregate economy, not only because they are inefficient, but also because they crowd out resources that would be available to more efficient private firms. That being said, Southeast Asia is also home to a notable exception: Singapore, a market-oriented economy dominated by highly efficient and profitable state owned enterprises.

Keywords: State Owned Enterprise, Privatization, Southeast Asia

JEL Classification: L32, L33, O53, P3