Abstract
Rolling Back the State: Comparing the Experience of Gas Market Liberalization in Northeast and Southeast Asia
Jeanne Choi, School of Advanced International Studies, Johns Hopkins UniversityThis paper examines recent developments in the liberalization process in two of the largest mature LNG markets in Northeast Asia (Japan and South Korea) and two emerging markets in Southeast Asia (Malaysia and Thailand). The study concludes that liberalization was more successful in Japan because the state intervened less directly and empowered the private sector to take on certain functions related to energy security, including national procurement of LNG. The public sector played a larger role in the other three case studies. In South Korea, the process of liberalization was impeded by multiple obstacles that prevented successful implementation due to the competing incentives of vested interest groups, including the labor union of the state-owned national gas company. While Malaysia and Thailand are still in the infancy of market reform, the challenge of dismantling monopolies dominated by state-owned companies may similarly stall the liberalization process. Lessons from the experiences of Japan and South Korea that can be applied to emerging markets in Southeast Asia include, among others, the importance of gradual reform and deliberate timing for the introduction of electricity and gas market reforms.
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