The purpose of this critical evaluation is to highlight the main issues regarding the efficiency and equity of the proposal for the privatization of the higher education system in Malaysia. The issues will be criticized and some words of caution regarding the possible predicted outcome will be discussed. The government's main objective in privatizing higher education institutions, in the form of corporations, is to reduce the financial burden of providing education. It is due to take place in Malaysia by next year (1996). However, the underlying objectives are not that clear. The original concern came from the current problem of brain drain among academics. Pressures to provide higher salaries at the competitive rate compatible with the private sector, made the government accept an alternative to the current public sector system of higher education. The idea of an independent education institution that can generate its own revenue funds and pay its own staff became the major incentive for future privatization. However, in the midst of all this enthusiasm, not enough emphasis was given to the impact that privatization might have on the higher education system under market forces. This evaluation is mainly concerned with the possible outcome, especially on the efficiency and equity grounds, that should be expected if privatization is to take place, and this will be discussed at length
