Managing State-Federal Relations: Growing Pressure on the Madani Administration

This was published as a Trends 2024/25 under the ISEAS-Yusof Ishak Institute, accessible here.

EXECUTIVE SUMMARY

  • Since the Sheraton Move in 2020 which led to the fall of the Malaysian government, many state governments in the federation have held their elections separately from the central government. This has resulted in a dynamic political situation in which coalitions have been formed in different ways at different times in different states.
  • At present, there are seven states ruled by the Pakatan Harapan–Barisan Nasional (PHBN) grand coalition, while four states are under the Perikatan Nasional (PN) coalition.
  • States have increasingly demanded greater political and policy autonomy over the last few years, particularly in the area of fiscal revenue-sharing between the federal and state governments.
  • Progress has been most forthcoming for issues related to the East Malaysian states of Sabah and Sarawak, and the federal government’s newly set-up Malaysia Agreement 1963 Implementation Action Council has been meeting regularly.
  • Contentious state-federal issues remain for states apart from Sabah and Sarawak, to which the federal government has not seriously responded. Limited space exists for formal state-federal negotiations that can result in firm decisions.
  • Sabah will be holding its state election in 2025, followed by Sarawak and Malacca in 2026. Pressure will continue to build up as these timelines draw near, and the federal government will need to identify better federal-state negotiation platforms than are currently available.
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SG4 Group: PAS Bid to Consolidate Bargaining Power?

This was first published on Fulcrum here, on 2 October 2024.

A new move by four PAS-controlled states to form a joint company is brilliant if seen from the lens of political consolidation.

Four Malaysian states – Kedah, Kelantan, Perlis and Terengganu — have formed a joint company to pool their resources and share wealth. Whether the new company would be viable in attracting investments to the four states controlled by Parti Islam SeMalaysia (PAS) remains to be seen. But if the development is about the consolidation of political power, it is a timely and wise one.

In early September, it was reported that the four state governments ruled by the federal opposition coalition Perikatan Nasional (PN) have banded together to set up a company called SG4 Group Sdn Bhd. The objective of this company is to pool the four relatively rural states’ resources in order to share wealth equitably, with each state holding 25 per cent stake in the company.

According to the company’s adviser, former Prime Minister Dr Mahathir Mohamed, while Terengganu, Kelantan and Kedah contain rare earth elements (REE), Perlis has dolomite, which is used in processing rare earth elements (REEs). Terengganu and Kelantan also possess valuable oil and gas resources, while Kedah and Perlis have agricultural land. Hence the five key clusters the group will focus on are infrastructure and logistics; trade, investment and industry; agriculture and food security; education and human capital; and new sources of revenue. Each state will appoint an executive council (exco) member to lead each cluster.

The idea of clustering states together is not new. When Pakatan Harapan (then Rakyat) governed the states of Penang, Perak and Selangor following the 12th General Election of 2008, there were attempts at common policy platforms. However, the most that was achieved in that first Pakatan term was hosting Chief Minister summits, bringing together the three (and then later only two, when Perak switched hands to Barisan Nasional) states alongside their aides and civil servants to discuss administrative matters such as water and land policy.

This latest innovation, based on the idea of pooling resources and sharing wealth, is therefore the first of its kind. State governments, constrained by an overly centralised federal structure, in which states have relatively few responsibilities and receive minimal revenues, have continually expanded initiatives to take control of their assets through state economic development corporations or state-level government-linked companies, including the successful examples of Johor Corporation and Selangor’s Menteri Besar (Chief Minister) Incorporated. While setting up a multi-state company is unusual, whether it will achieve its chief purpose of attracting investment remains to be seen.

The launch of SG4 raises several questions. First, although these four states are PN-administered, the reality is that the majority of seats in each of the four states is controlled by Parti Islam SeMalaysia (PAS); is this therefore a PAS or PN-led entity? At the press conference of the event announcing SG4’s formation, Dr Mahathir was flanked by the four states’ Chief Ministers, all of whom hail from PAS. The message this sends is that this is essentially a PAS initiative – and a demonstration of PAS’ strength and prominence within the coalition relative to its partner Parti Pribumi Bersatu Malaysia (Bersatu).

If this is the case, PAS is taking the lead and showcasing what it has to offer as a major, national-level political party. Indeed, PAS has experienced the taste of helming the federal government, as recently as up to two years ago under the Muhyiddin Yassin and Ismail Sabri BN-PN administrations. In a recent interview, Terengganu Chief Minister Dr Ahmad Samsuri Mokhtar confirmed this, saying that the objective of SG4 was less about chasing profits, and more about “consolidation of bargain(ing) power”. The two smallest and most rural states, Perlis and Kedah, would especially stand to gain from this arrangement.

To truly make an attractive case for SG4, it will have to co-operate with federal agencies such as the Malaysian Investment Development Authority (MIDA), since the latter is responsible for providing tax incentives and grants to companies.

Dr Samsuri also said that in the two to three years before the next election, the four states would prove their potential. The party has the long game in mind. Likewise, when the Pakatan coalition was in power at the subnational level of Selangor and Penang from 2008 to 2018, it, too, assumed an aggressive position of wanting to prove itself as an alternative ruling coalition, by governing well at the state level first.  

Second, what kind of economic development model would the SG4 arrangement showcase? Being an Islamic party, PAS would likely intend to demonstrate a particular type of economic development, differentiating itself sufficiently from the developmentalist model of pre-2018 BN. During BN’s more than 50 years in power, it adopted an approach that combined development with some form of welfare provision, although arguably not systematically administered. After espousing the “Islamic State” model for decades, PAS has since 2008 moved on to the “welfare state” philosophy. On this note, it is significant that a new think tank was recently launched in Putrajaya, the location of which sends a strong signal. With a mission to “unravel the complexities of contemporary challenges” and “offer a fresh narrative rooted in Islamic wisdom”, The Future Research is rumoured to be the brainchild of Dr Ahmad Samsuri, who also officiated its launch on 5 August this year.

While this is certainly an opportunity for the federal opposition to fluff its feathers, the question remains as to the feasibility of such a scheme. First, trade and investment fall under the jurisdiction of the federal government. To truly make an attractive case for SG4, it will have to co-operate with federal agencies such as the Malaysian Investment Development Authority (MIDA), since the latter is responsible for providing tax incentives and grants to companies. Second, talent as a crucial resource would still be lacking within these states, whose graduates would likely have migrated to urban centres in the Klang Valley, although this trend could be reversed were there incentives to stay. Third, the verdict is still out on whether investors would be interested in what the states have to offer, even with collective pooling of resources. Familiarity with the business environment and its stakeholders will be crucial for the state leadership.

However, if the group’s raison d’etre is more about a consolidation of power than it is about profit-making, then this is a brilliant move, especially as PAS intends to capture Pahang in the next election. It allows the states to negotiate with the federal government on a collective front, especially with regards to ongoing disputes such as on oil royalty and rights over the territorial sea of Malaysia. Except for issues pertaining to Sabah and Sarawak, there is no permanent platform at which state-federal conflict can be resolved.

And until the federal government takes this seriously enough to organise meaningful centres of dialogue, states will increasingly demand more, challenge the status quo and continue to bargain with the country’s political centre. Whether or not this has a political cost ultimately depends on how the Madani administration decides to respond. The SG4 Group formation and its future developments are a crucial milestone in the country’s continued journey towards a more balanced federalist model.

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Dr Tricia Yeoh is a Visiting Fellow at the ISEAS – Yusof Ishak Institute and Associate Professor of Practice at the University of Nottingham Malaysia’s School of Politics and International Relations.

Posted in Economics, Federalism, Public Administration, Religion | Leave a comment

Run For Their Money: Unequal Constituency Development Funds in Malaysia

This was first published in Fulcrum here, on 2 September 2024.

Malaysia should consider a Constituency Development Act which would lay out the roles and responsibilities for disbursing constituency development funds to MPs.

In July, Malaysian opposition Member of Parliament (MP) Syed Saddiq of the Malaysian United Democratic Alliance hit the headlines for reportedly running 200km from Muar to Parliament to protest the lack of constituency development funding (CDFs) received. Six opposition MPs from the Parti Pribumi Bersatu Malaysia (Bersatu) had made the strategic decision of signalling support for Anwar in exchange for constituency allocations. They were sacked from their party, and despite the Anti-Hopping Law, which involved amendments to the Federal Constitution, the six will remain in their seats with no by-election called.

The practice of offering CDFs only to government-aligned MPs, while denying them to opposition MPs, has existed since the Barisan Nasional (BN) era prior to 2018. This practice was slightly changed when Pakatan Harapan (PH) took over in 2018. PH, which had taken the reins of power from BN, pledged to provide government MPs RM500,000 annually and a concession of RM100,000 to opposition MPs (much smaller, but still something). PH MPs had actually received RM1 million annually in 2018, which increased to RM3.5 million in 2019, and which was maintained for 2020.

Under the Perikatan Nasional (PN)-BN government between 2020 and 2021, opposition MPs reported receiving no CDFs. It was only under Ismail Sabri’s government, when an MOU was signed in September 2021, that equal CDFs for all signing parties were guaranteed, including for some opposition parties, which received RM600,000 for 2021 and RM1.5 million in 2022.

Today, government MPs receive RM4.1 million annually, which includes an additional RM2 million allocated this year for Projek Mesra Rakyat (people-centred projects) (the numbers were provided in an interview with an officer of a Member of Parliament). Prime Minister Anwar Ibrahim has stated clearly that opposition MPs will have to negotiate and “discuss their allocations”.

CDFs, which are a historical fund administered by the Prime Minister’s Department, have been central for MPs to carry out their constituency work, especially in rural areas. Some MPs argue that this practice is burdensome, as they have to deal with constituent expectations daily, especially opposition MPs who have to finance these demands without government support. But in reality, politicians also benefit from being the sole provider of such funds.

Ideally, constituents in need should seek help directly from the Welfare Department, but bureaucratic delays mean they often prefer to turn to MPs, especially in less urban areas, where literacy remains a problem. MPs therefore benefit from an inefficient system by being society’s brokers — after all, they have the connections and position to do so. And they are more likely to perpetuate a system that ultimately benefits them electorally, since voters remember their good deeds when they are in power.

Stability is not just about maintaining power between elections but also about ensuring predictable, clear and accountable financial measures within the political party system.

The CDF system is likely to persist, although a position paper by think tank IDEAS and NGO BERSIH argues that one way out of this is to remove CDFs altogether, channelling the funds directly through local councils. This may not be politically palatable at the moment, since politicians would prefer to be recognised for their role in brokering CDFs and channelling aid; in addition, for this to work well, local government elections must be reinstated.

If politicians continue to depend on CDFs for constituency service, then the government of the day must acknowledge that the political instability over the last few years signals that no party is guaranteed power forever. Punishing constituents for electing opposition MPs may backfire, since any political party runs the risk of being in opposition after GE16.

Deputy Prime Minister Fadillah Yusof announced that the Unity Government’s Leadership Council agreed to channel allocations to the opposition via an MOU, but no concrete results have emerged. Under the Ismail Sabri administration, a similar MOU was signed that guaranteed equal allocations amongst signing members.

CDFs-by-MOU are highly unproductive and worse, temporary. There is no guarantee that these CDFs will stay in perpetuity. This is why instituting such reforms over the long term is crucial, and this should be done in the form of legislation. Having a Constituency Development Act at the federal level and a similar state-level enactment is ideal as it makes clear the terms and responsibilities of all parties, and rightfully relocates its role away from under the Prime Minister’s Department.

The formula for calculating CDFs should also be made transparent, where the same terms and conditions of CDFs should be equitably distributed to all MPs regardless of political affiliation. On this note, it is worthwhile mentioning that the practice of equal CDFs actually began at the state level in Perak and then Kelantan, albeit without an accompanying law. States can and should pave the way forward for the same to apply at the federal level.

There is a human tendency to lash back after politicians emerge to become the victors, and as such deny funds to opponents in the same way they themselves were denied financially. In reality, this is not strategic, since PH-BN also occupies the positions of opposition in several states like Kelantan, Kedah, Perlis and Sabah. Surely if at the federal level they provided CDFs equitably to all, their state assemblymen would also benefit from receiving the same at the state level.

The monetisation of politics in Malaysia is not new. Hence, new proposals like including public funding (which is practised in more than 100 countries worldwide) into a Political Financing Act, where the government allocates funds to parties based on the percentage of seats in Parliament, would introduce stability into the political party system. Public funding differs from CDFs; where CDFs are transferred to individual politicians, public funding would channel funds to parties, which would help with basic operating costs such as covering overheads. This, alongside equitable CDFs, would reduce the likelihood of corruption by providing basic operational funds to parties and politicians.

Anwar Ibrahim said that political stability is what draws investors to Malaysia. Stability is not just about maintaining power between elections but also about ensuring predictable, clear and accountable financial measures within the political party system. If political stability is what his administration is after, equitable CDFs and public funding of parties are crucial steps towards achieving this.

2024/266

Dr Tricia Yeoh is a Visiting Fellow at the ISEAS – Yusof Ishak Institute and Associate Professor of Practice at the University of Nottingham Malaysia’s School of Politics and International Relations.

Posted in General Politics, Public Administration, Transparency and Good Governance | Leave a comment

Malaysia needs ASEAN to navigate a pathway between ‘the West’ and ‘the rest’

This piece was first published on the East Asia Forum site on 18 August 2024 here. Its editorial, titled “Malaysia mustn’t waste its moment of regional leadership”, also refers to the piece here.

As ASEAN chair in 2025, Malaysia has a critical opportunity for leadership at time when geopolitics threaten regional stability and prosperity. Deploying ASEAN centrality to restore the region’s influence and secure the momentum of its development is its primary task. But there are questions about the country’s strategic priorities as Prime Minister Anwar Ibrahim’s diplomacy has seemed to tilt towards China and, more recently, Russia.

The risk is that Malaysian leadership is being derailed by a ‘the West’ against ‘the rest’ narrative when regional geopolitics is in reality a story of complex and competing dangers and opportunities on all sides through which ASEAN has to navigate its own pathway.

During Chinese Premier Li Qiang’s visit to Malaysia in June 2024, commemorating the 50th anniversary of China–Malaysia diplomatic ties, Malaysia reiterated its support for China’s Belt and Road Initiative (BRI). A joint press statement also welcomed Beijing’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Malaysia reaffirmed its ‘firm commitment’ to the ‘One China Policy’ and opposition to Taiwanese independence.

In July, Anwar announced that Malaysia had formally applied to join the intergovernmental organisation, the BRICS, of which Russia currently is president — a nine-country bloc including China and India representative of ‘the rest’. He is also planning a visit to Vladivostok to meet Russian President Vladimir Putin to discuss economic cooperation.

On Chinese media outlet Guancha he said that Malaysia ‘can no longer accept the scenario where the West wants to control the discourse because the fact is they are not colonial powers anymore and independent countries should be free to express themselves.’

Anwar’s perceived tilt towards China reflects widespread domestic sentiment, which he is never shy about expressing.

July survey conducted by the Pew Research Center found that 64 per cent of Malaysians held a favourable opinion of China, while 57 per cent viewed Russia favourably, up 10 percentage points from 2022. Sixty one per cent even expressed confidence in Russian President Vladimir Putin’s foreign policy.

The Israel–Hamas war has also deepened Malaysian resentment of US foreign policy. Anwar has taken strong positions against Israel on the international stage including by maintaining ties with Hamas. If ‘all politics is local’, then Anwar is likely responding to the increasing political competition from his coalition government’s rival, the National Alliance, comprised of two conservative Malay-Muslim parties.

Some of Anwar’s statements appear as grandstanding rhetoric. Malaysia continues to foster deep economic ties with other major powers including the United States, the European Union and Japan — its third-, fourth- and fifth-largest trading partners in 2023. US investment into Malaysia reached US$13.2 billion in 2022, up 4.6 per cent from 2021. The United States and Malaysia also enjoy a strong defence partnership.

Malaysia participates in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF), the CPTPP whose commission is currently chaired by Canada, and crucial semiconductor supply chains linked with the West and Taiwan. As a small and historically open trading nation, Malaysia favours economic ties with all major powers.

Malaysia’s ‘grand strategy’ thus appears quite opaque. An articulation of strategic priorities may be urgent but still absent. It is important to be clearer about the region’s role in the current geopolitical environment.

While both security and drivers of growth like foreign investment are important, Malaysia needs to renew its commitment to the global rules and uphold principles of free and fair trade based on regional institutional governance — key to ensuring the domestic economy remains robust and resilient.

Malaysia could, for example, demonstrate such commitments by signing up to the Multi-Party Appeal Arbitration Arrangement (MPIA) — a framework allowing members to resolve World Trade Organization (WTO) disputes since the WTO’s Appellate Body ceased functioning because of a US veto on the appointment of Appellate judges — and encourage others in ASEAN to do the same. Ensuring the Digital Economic Framework Agreement (DEFA) is signed and implemented ahead of 2025 is also a priority.

Malaysia can also work to translate its commitments under the CPTPP and the Regional Comprehensive Economic Partnership (RCEP) into meaningful national and regional benefits.

Malaysia should lead efforts to manage disputes in the South China Sea, especially given the increasing division between the Philippines, Vietnam and Malaysia. As the architect of Myanmar’s entry into ASEAN, Malaysia must also do more to engage that state. Countries like Malaysia can share important lessons from its own experience of federalism and decentralisation as Myanmar explores new models of governance.

As domestic discussions about carbon pricing ramp up, Malaysia is well-positioned to lead on regional climate change policies and initiate dialogue on a regional carbon credit trading scheme. It can also lead on the business and human rights agenda, building on its work in developing a national action plan based on the United Nations Guiding Principles on Business and Human Rights in a space where only Thailand in Southeast Asia has so far had some success.

The question is whether Malaysia’s leadership can engage a more constructive approach on strengthening ASEAN, eschewing a diplomacy that appears hooked on merely belittling the West.

The region has potential as an attractive geopolitical and economic partner that other blocs cannot ignore. As the host of the first-ever East Asia Summit in 2005, Malaysia has a unique legacy and new responsibility to reinvigorate the East Asian arrangements as a platform for mitigating security risks while promoting a rules-based order.

While grappling with local sentiment is a political necessity, it’s time for Malaysia to strike a better balance between international partners and their competing economic and security interests. Grasping ASEAN’s collective strengths and demonstrating them through a concrete policy agenda offers Malaysia the chance of regional leadership when it is most sorely needed.

Tricia Yeoh is CEO of the Institute for Democracy and Economic Affairs (IDEAS), Malaysia, Visiting Senior Fellow at ISEAS-Yusof Ishak Institute and Campus Visitor at The Australian National University.https://doi.org/10.59425/eabc.1724018400

Posted in Economics, General Politics, International Relations, Outside Malaysia | Leave a comment

Malaysia’s States: Open for Business, Yet Not Always Transparent

This op-ed was first published on Fulcrum, a platform under ISEAS-Yusof Ishak Institute on 12 August 2024 here. This was written as part of my 6-month fellowship with ISEAS-Yusof Ishak Institute.

Malaysia is enjoying strong inflows of foreign direct investment. To up its game, it needs to channel such flows to less-developed states.

Prime Minister Anwar Ibrahim announced recently that Malaysia had attracted potential foreign direct investments (FDI) of RM76.1 billion (US$17.2 billion) as of March 2024. The first-quarter performance follows investments of RM329.46 billion in 2023. However, FDI remains concentrated in more industrialised states such as Penang and Selangor. For lesser-developed states to benefit from FDI flows, they would need to up their game in terms of transparency and oversight.

Recent investment pledges include Intel’s RM30 billionTexas Instruments’ RM14.6 billionMicrosoft’s RM10.5 billion and Google’s RM9.4 billion in manufacturing and digitalisation activities. While these investments are positive, they mostly benefit highly developed and industrialised states such as Selangor, Kuala Lumpur, and Penang. The 2023 statistics showed Penang leading in total capital investment, followed by Kuala Lumpur and Selangor. These states benefit from valuable resources such as land, talent and infrastructure. Kuala Lumpur and Selangor are centrally located, with major airports, ports, and higher education levels.

There are, however, pressing problems. At the Selangor ASEAN Business Conference 2024, state chiefs of Selangor and Penang expressed serious concerns over the lack of industrial land. Penang has limited industrial land, and 31 per cent of Selangor is reserved as permanent forest. To increase FDI further, Malaysia faces a two-pronged problem: the problem of land saturation in highly developed states, and the need for lesser-developed states to attract foreign investors.

How can lesser-developed states do so when there is significant variation between states in economic competitiveness? Not all states have advantages like geography (Selangor, Kuala Lumpur, Johor), natural resources (rare earths in Perak and Pahang, oil and gas in Kelantan, Terengganu, Sabah and Sarawak) and high levels of industrialisation (Penang, Selangor and Kuala Lumpur). Only a handful of states such as Selangor and Johor have well-performing State Economic Development Corporations (SEDCs), which own large plots of land and industrial parks. Further, past practices on water services have an impact on the price users pay in each state.

For states that have less competitive advantages yet are competing to attract investment, even marginal value-add may make a big difference. For instance, very few state governments transparently publish their full state budgets  and changing this could be a low-hanging fruit. While most state government budgets are small relative to the federal budget, this could be a step for states to demonstrate seriousness in good governance as a principle and practice.

In a recent Malaysia Open Budget Index (MyOBI) 2024 report published by the Institute for Democracy and Economic Affairs (IDEAS), it was found that Terengganu and Selangor tied for the top position in providing “substantial disclosure” in their budget transparency. Alongside Negeri Sembilan and Perak, they provided a detailed breakdown of their respective expenditure and revenue in 2022. Only Terengganu publishes its enacted budget, which is passed by its legislative assembly and used the following fiscal year. These states are administered by different coalitions and parties; Terengganu is led by the Islamic Party Parti Islam SeMalaysia, Selangor and Negeri Sembilan are administered by Pakatan Harapan (PH), whereas Perak is under a PH-Barisan Nasional coalition.

Ultimately, what investors appreciate is policy predictability, which is what a more transparent working environment can provide.

Malacca, Johor, Sarawak, Sabah and Penang provided only “minimal disclosure” (Penang and Malacca provided only their budget speeches to the public) of their budgets. In the lowest category, Perlis, Kelantan, Kedah and Pahang were deemed to have provided insufficient disclosure of budget documents. Kedah and Kelantan did not release any form of budget documents to the public.

Apart from budget transparency, IDEAS also studied “oversight”, which tracks the role of the state legislative assemblies in their oversight of budgetary processes. In this aspect, Selangor, Terengganu and Sabah scored the highest. There was timeliness in the tabling and passing of state budgets and in the laying out of audit reports to legislative assemblies, respectively. States that provide state assembly official records (Hansards) and information on Public Account Committees (PACs) are regarded as performing well; at this, only Selangor provides both. Selangor has the highest number of days in which state representatives deliberate the budget, followed by Sarawak and Johor.

Budget transparency may not be significant for states already attracting investment. After all, Penang does not perform very well in the MyOBI index and yet outperformed all other states in investment figures in 2023. But good governance could make a difference for states neighbouring the Klang Valley and Penang. For instance, Negeri Sembilan and Kedah could benefit from spillover proximity effects. While resources like land and infrastructure are still fundamental factors of production, states can signal to investors that they are serious about good governance.

But do investors really look for good governance practices to inform their financial decisions? In a 2015 study, greater fiscal transparency was found to lead to better debt management and improved public financial management. Macroeconomic stability also led to lower investment risk and higher credit ratings. At the state level, an analysis of 10 pilot studies showed that subnational fiscal transparency exposes holes in subnational public financial management and tracks financial flows from the source to points of programme delivery. Transparency assessments help to control subnational borrowing as they measure the ability of subnational governments to pay back what they borrow. This allows for comparisons between states, which in turn encourages inter-state competition.

As more state governments raise their own funding  such as Sarawak Energy’s issuance of a RM3.5 billion sukuk (bond) — it is in states’ interests to improve their subnational transparency rating. Since investors scrutinise states’ allocation of resources, these subnational entities should consider improving their governance scores. If states like Penang and Johor want a greater share of revenues generated within their borders, they should demonstrate responsible stewardship of resources they already control. States also oversee local governments, which are important providers of services for firms.

Malaysia is currently benefitting from global interest in the semiconductor industry; as a result, states are now competing for investments. Ultimately, what investors appreciate is policy predictability, which is what a more transparent working environment can provide. Apart from fiscal transparency, states can also incorporate sustainability and business and human rights (BHR) practices into existing economic development policies and plans. This would send a signal that states are open for business, and are willing to adopt globally accepted practices to do so.

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Outgoing IDEAS CEO Dr Tricia Yeoh Joins University of Nottingham Malaysia

This press statement was released by the University of Nottingham Malaysia on 13 August 2024, here.

Semenyih, 13 August 2024 – The University of Nottingham Malaysia (UNM) is delighted to announce the appointment of Dr Tricia Yeoh as Associate Professor of Practice at the School of Politics and International Relations, effective 1 October 2024. 

Dr Tricia Yeoh is a renowned policy analyst and researcher, known for her contributions to promoting democracy, economic liberalisation and inclusion, and governance in Malaysia. With a background in public policy and close to two decades of experience in the field, Dr Yeoh has significantly influenced national policy and governance discussions through her leadership at the Institute for Democracy and Economic Affairs (IDEAS). 

Associate Professor of Practice, Dr Tricia Yeoh shared, “I am truly excited about joining the University of Nottingham Malaysia’s School of Politics and International Relations, especially since this is where I conducted my doctoral studies. This opportunity to return is incredibly meaningful, allowing me to give back to the institution that shaped my academic journey.   

With over 20 years of experience working across government, think tanks and the private sectors, Dr Yeoh brings a unique perspective on public policy, politics and international relations. She is eager to share this knowledge and expertise with the next generation of students.  

“As Associate Professor of Practice, I aim to bridge the gap between theory and practice, infusing my teaching and research with examples from my professional experiences. I believe this approach will enrich academic discourse and prepare students to navigate the complex landscape of public policy and politics. I am dedicated to contributing meaningfully to the University, fostering a dynamic and engaging learning environment, and supporting the growth and development of our students. By bringing my experience to this esteemed institution, I hope to inspire and equip our students with the skills and knowledge they need to excel in their future careers,” Dr Yeoh added

Dr Benjamin Barton, Associate Professor and Head of School of Politics and International Relations at UNM shared, “The University of Nottingham Malaysia and the School of Politics and International Relations are thrilled to welcome back Dr Tricia Yeoh, this time in her capacity as a fully-fledged faculty member. Dr Yeoh’s significant experience in policy research and advocacy, network building, fundraising, as well as people and project management within fields such as domestic politics, political systems, civil society, human rights, political economy, development, sustainability, and gender studies aligns perfectly with the School and University’s strategic goals.” 

“Dr Yeoh will also be the first Director for External Engagement (DEE) for the School of Politics and International Relations with her primary responsibility being to establish and manage the School’s External Advisory Board as well as connecting the incredible work we do at the Faculty to help address Malaysia’s most pressing social, political and environment challenges. Dr Yeoh is ideally suited for this role. She is highly respected for her years of service at IDEAS and possesses a broad range of talents”, Dr Barton added.  

In addition to her policy and advocacy work, Dr Yeoh has pursued academic research on Federalism, aligning with UNM’s School of Politics and International Relations research strategy. The University is excited to support Dr Yeoh in becoming a world-recognised expert in this area, confident that students will benefit tremendously from her experience and insights, built on her impressive track record as a PhD holder, part-time lecturer, guest lecturer, public speaker, and consultant. 

Dr Tricia Yeoh holds a PhD in Political Science from the School of Politics and International Relations at the University of Nottingham Malaysia and is currently Visiting Senior Fellow at the ISEAS-Yusof Ishak Institute at the National University of Singapore (NUS). She is qualified in Econometrics and Marketing from Monash University (BBusComm) and holds a MSc. in Research Methods in Psychology from the University of Warwick. She is editor of the books “The Spirit of Merdeka”, “The Road to Reform: Pakatan Rakyat in Selangor” and author of “States of Reform: Governing Selangor and Penang”.  

Dr Yeoh was awarded the Meritorious Service Medal, conferred by His Royal Highness Sultan of Selangor (Pingat Jasa Kebaktian, PJK) in 2011. She has been awarded the 2017 Distinguished Alumni Award for Monash University Malaysia, the Postgraduate Award Prize 2020/21 from the University of Nottingham Malaysia, the Malaysian Australian Alumni Council’s Female Alumnus of the Year 2022 and the 25th Anniversary Alumni Award for Monash University Malaysia. Her documentary, “The Rights of the Dead” won the Justin Louis Award at the FreedomFilmFest 2012 and was screened at the Al-Jazeera International Film Festival in 2013. She speaks and writes regularly on national public policy issues, having been featured in The Economist, and on CNN, Al-Jazeera, Bloomberg, CNBC, amongst other platforms. 

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IDEAS Announces CEO Transition: Farewell and Welcome

This press statement was released by IDEAS on 12 August 2024 here.

Kuala Lumpur, 12 August 2024: The Institute for Democracy and Economic Affairs (IDEAS) announces that Dr Tricia Yeoh will be stepping down from her role as CEO at the end of September 2024. She has served IDEAS as Chief Operating Officer, Fellow and then finally CEO, over the last 11 years, and will be transitioning to a new role in academia after her tenure at IDEAS.

Under her leadership, IDEAS significantly expanded its influence and public policy impact by fostering strong relationships with numerous networks and partners, working in the areas of democracy and governance, public finance, economics and business, and social policy. A notable achievement was the establishment of the All-Party Parliamentary Group on Political Financing that IDEAS is Secretariat of, which advocates for essential political financing reforms, and that drafted Malaysia’s first ever version of a Political Financing Bill. Under her watch, IDEAS has achieved remarkable financial sustainability, marking the best performance in its history.

Reflecting on her journey with IDEAS, Dr Tricia said, “The 11 years that I spent in IDEAS have been the most rewarding of my professional life. IDEAS has had a tremendous impact on my career in public policy and political studies. IDEAS has been an amazing platform that provided me an opportunity to expand my knowledge and experience in the fields of public policy research and advocacy, management and team-building. I am also thankful to IDEAS for having sponsored my doctoral studies. For all this, I will always be grateful.”

“IDEAS continues to be the best organisation in Malaysia for anyone who is interested in pursuing independent public policy research and making a difference. The organisation has undergone tremendous change and transformation from its earliest days, all for the better and in keeping with the context of each phase. I believe that leadership change is good for organisational renewal. I extend my heartfelt thanks to the Board, our funders, and partners who have made my time as CEO at IDEAS over the last four years the outstanding experience it has been. I would like to personally thank my team members who have worked alongside me so tirelessly – I could not have achieved such success at IDEAS if not for them. It has truly been an honour for me to lead this incredible team,” added Dr Tricia.

The Board of Directors is pleased to announce that beginning 16 September, Aira Azhari, current Senior Manager of Advocacy and Events will be succeeding Tricia as the Acting CEO of IDEAS. Aira has been with IDEAS for almost nine years, starting as a Research Executive in 2016 after finishing her Master of Laws from the London School of Economics and Political Science. Aira has contributed immensely to IDEAS’ growth over the years, particularly in her work championing institutional reforms, and more recently, leading and transforming IDEAS’ advocacy and events team, boosting IDEAS’ profile and credibility with important stakeholders. Aira has also been a frequent and trusted analyst of politics and current affairs, having represented IDEAS in both local and international media. 

Aira shared her enthusiasm about the new role, stating, “It is an incredible honour and privilege to be entrusted with leading an organisation as important as IDEAS. The crucial role IDEAS plays in building a Malaysia that upholds liberty and justice for all is a responsibility I take very seriously, and I look forward to working with my excellent colleagues in advancing public policy discourse in this country. I am also grateful to the Board for their trust and support throughout this transition process and beyond. To Tricia, I am thankful for the exemplary leadership she has shown us all, and I wish her all the very best in her future journey.”

YAM Tunku Zain Al-‘Abidin ibni Tuanku Muhriz, Founding President of IDEAS and Chairman of the Board, commented, “The Board thanks Tricia for her exceptional leadership and dedication which has propelled IDEAS forward in numerous ways.  I have enjoyed working with her over the past decade and I know she will excel in her next role.  We are excited to welcome Aira, who we believe will build upon Tricia’s legacy and lead IDEAS to new heights.”

IDEAS remains steadfast in its commitment to improving public policy and building a better Malaysia for all. We thank Dr Tricia Yeoh for her outstanding contributions and wish her success in her future academic endeavours.

Posted in Civil Society, Liberalism, Transparency and Good Governance | Leave a comment

The Business of Governing Penang: Workarounds as Remedy?

This is a journal article co-authored by Xinying Chan, Meredith Weiss and myself, published in the Journal of Current Southeast Asian Studies. It can be accessed here.

Citation: Chan, X. Y., Weiss, M. L., & Yeoh, T. (2024). The Business of Governing Penang: Workarounds as Remedy? Journal of Current Southeast Asian Affairs, 43(2), 331-354. https://doi.org/10.1177/18681034241262041

Abstract

The state of Penang, including city councils for island Pulau Pinang (with urban-core George Town) and mainland Seberang Perai, has negotiated at least a degree of political marginalisation since independence. Ruled previously by a secondary partner in the ruling Barisan Nasional (National Front), and since 2008, by the Democratic Action Party and its coalition partners, the economically powerful state has negotiated constrained autonomy and resources. While to some extent, these governing challenges are common to all states in Malaysia’s highly centralised federation, in other ways, they reflect Penang’s specific political position. Penang’s leadership has sought in particular ways to circumvent inertia or divided loyalties among bureaucrats from the federal, rather than a state-level, civil service. Central to that solution has been reliance on an array of state government-linked corporations, facilitating administration, but at possible cost to clear accountability, transparency, and promised empowerment of civil society.

Posted in Academia, Federalism, General Politics, Public Administration | Leave a comment

Why are Asian thinktankers pessimistic about the future?

This op-ed was first published on the On Think Tanks website here, on 17 October 2023.

In the Think tank state of the sector report 2023, Asian thinktankers were pessimistic about the future. Political challenges appeared to be driving this pessimism, with reports that they are experiencing worsening conditions in their countries.

They expressed their growing concern about rising authoritarianism – with governments suppressing civil society and the media – and about the lack of cooperation between think tanks and governments.

Asian thinktankers also cited attempts to curtail opposition and critical voices, and the challenges arising from governments’ use of policy to restrict civil society and think tanks. Some examples given included threats and attacks against their work: fact-checking activities, attempts to discourage engagement and labelling them as spies.

The presence of such a hostile political climate is leading to challenges in engagement, collaboration and advocacy.

These are worrying trends for think tanks, donors and supporters of freedom.

In this article, I dive deeper into why Asian thinktankers might be so pessimistic, and how we might respond as a sector to these challenges.

Geopolitical context

Thinktankers in this region reported that the political environment in most of their countries is marked by increased polarisation and political instability, the latter of which has been contributed to, in part, by the Russian invasion of Ukraine.

While for many Asian countries the Russia–Ukraine war may be geographically distant, the economic impacts are evident: food prices in most countries in this region have increased since the start of the war, with governments implementing protectionist approaches to protect their food security as a result.

In South-East Asia, China’s presence contributes to geopolitical uncertainty, especially following its recently released “standard map”, which claims a significant area of the disputed South China Sea. These developments may have contributed to the general sentiment around the region’s perceived instability, which has indirectly impacted think tanks within their respective countries.

Authoritarianism across Asia

We’re currently seeing growing authoritarianism across the region.

Malaysia has undergone a recent rise in conservative politics, with parties using the rhetoric of race and religion to attract Malay-Muslim majority voters, putting pressure on the government.

In Indonesia, the state is exercising greater control over the internet, where private operators need to register with the government in order to operate, and the president is accused of abuses of power as he claims to spy on political parties.

In India, the rule of law is under question as due court process is not adhered to in one state’s crackdown on crime. And in Sri Lanka, even amidst their worst economic crisis, several bills are being floated that may threaten human rights including an anti-terrorism bill that has provisions to stop civil society activities.

Funding and government control

Given this heightened political environment, thinktankers, especially those within South-East Asia, reported pessimism about their funding context, with only 11% predicting an improvement – a significant change from last year, when only 18% expected a worsening.

The key factor driving this negative assessment is increased government control and political factors, political instability, government pressure on (or rejections of) donors, distrust of civil society organisations and economic issues that negatively affect funding.

An example of this government control can be seen in India, where think tanks and other non-profit organisations are required to be registered under the Foreign Contribution (Regulation) Act (FCRA) in order to receive foreign funds, the licenses for which can be cancelled by the government.

In many Asian countries, receiving foreign funds is perceived as being influenced by a foreign – often Western – agenda; therefore, governments have often threatened to regulate this tightly.

Also, there are laws in many Asian countries – including NepalPakistanBangladeshVietnam and China – that require non-profit organisations to register themselves under highly bureaucratic processes. Such scrutiny, of course, restricts think tanks’ ability to be independent in their research and advocacy work.

Staff retention

At the global level, the report indicated that human resources was a key competency for think tanks. This was mostly driven by Asian thinktankers, who mentioned that investing in recruitment, the capacity building of their staff and staff retention was critical.

In a region where talent is highly mobile, it is indeed challenging to retain staff as they often depart for better opportunities in other sectors or even other countries.

To a lesser degree, respondents also cited adaptation to evolving contexts, regulatory challenges, fostering strategic collaborations and strengthening research programmes as important for think tanks.

As multiple countries in Asia face national elections in 2024, think tanks must come together to strategise

Despite the multiple challenges, thinktankers in Asia mostly reported that there has been no change in the difficulties of running a think tank. This finding might be counter-intuitive to the political context being faced within each country.

One possible explanation is that the political environments in Asian countries have always been tough to operate in; in many cases, perhaps this was the reason why the think tanks were set up in the first place.

Nonetheless, if governments are more likely to suppress think tanks than they are to receive their recommendations, how can our public policy research really have meaningful impact?

Given that thinktankers are expecting even more authoritarian trends from the governments across Asia, it’s now even more important for think tanks to engage in learning conversations with each other.

Bringing think tanks together would provide solidarity, achieve greater understanding of the region’s context and, most importantly, strategise towards solutions for how to operate more effectively.

The worrying fact that thinktankers in Asia are increasingly pessimistic is also an opportunity to promote collaboration and engagement among us.

Existing think tank and civil society networks in Asia should connect more frequently with each other, such as the Asia Democracy Network and Southeast Asia Think Tank Network. This would enable networking platforms for think tank leaders to actively engage with each other in the near future, which would be helpful in a restricted-funding environment.

As several Asian countries face national elections in 2024, including Bangladesh, India, Indonesia, Pakistan and Taiwan, political conditions there are bound to intensify. Hopefully, think tanks in these countries and in the Asian region, more broadly, will be able to face the challenges of the future through much-needed strategic planning and partner engagements.

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Will Anwar’s political dilemma in Malaysia stall reforms?

This article first appeared on the East Asia Forum website here, on 20 September 2023.

The conclusion of six state elections held in August 2023 provided a much-needed pause in Malaysian politics. Held nine months after the 15th general election (GE15) in November 2022, these elections were a mid-term gauge of the popularity of Prime Minister Anwar Ibrahim’s coalition government, which is comprised of former rivals Pakatan Harapan (PH) and Barisan Nasional (BN).

Protesters holding Malaysia flags and placards attending the ‘Save Malaysia’ rally in Kuala Lumpur, Malaysia, 16 September 2023 (Photo: Reuters/EyePress Newswire/FL Wong).

The PH coalition maintained its hold on three states — Selangor, Penang and Negeri Sembilan. The national opposition, Perikatan Nasional (PN) and its component Malaysian Islamic Party (PAS) achieved supermajorities in its three states — Kedah, Kelantan and Terengganu.

While retaining control of its states gave Anwar a political reprieve, PN made significant inroads into all three west coast states. The coalition was denied a two-thirds majority in Selangor, where PN increased its number of seats from one to 22. Similar seat increases took place in Penang and Negeri Sembilan. The PH coalition also managed to retain two seats in the recent Johor by-elections.

While PAS’ strongholds remain the predominantly Malay states in the north and east coast of Peninsular Malaysia, support for PN grew even in semi-urban parts of Selangor, located around the periphery of Klang Valley’s urbanised centre.

Several reasons account for this ‘green wave’, including the rise of Malay nationalism, which PN leaders leaned into during both the GE15 and recent state elections. But the decline of the United Malays National Organisation, the lynchpin of BN, was plagued by fragmentation and corruption allegations, which may have also played a role in PN’s success.

With an ethnically and religiously majoritarian opposition gaining Malay support, the PH coalition has chosen a more conservative route to shore up Malay support. In the lead-up to the state elections, the federal government ordered a ban on Swatch LGBT pride-branded watches and cancelled a music festival after a band’s lead singer gave a pro-LGBT speech and kissed his male guitarist on stage.

The federal government has also increased the budget and roles of JAKIM, the federal agency that oversees Islamic affairs. Anwar’s government is also moving to restrict the use of the word ‘Allah’ by non-Muslims in Peninsular Malaysia, and aims to table controversial legislative amendments to elevate the role of Islamic Syariah law in the criminal justice system.

Anwar’s moves to strengthen his position among the Muslim majority sets up a potentially a slippery slope towards PN continuing to set the political agenda and tone, which PH–BN is then forced to respond to.

A more significant threat to the reform agenda might emerge if, to placate and win over Malay support, the government delays much-needed economic and institutional reforms. While the government has approved the long-awaited Freedom of Information Act and Government Procurement Act, concrete steps must be taken to see them enacted in Parliament to avoid potential resistance.

The mid-term review of the 12th Malaysia Plan proposes introducing targeted subsidies for electricity, diesel, petrol and social assistance. Fiscal consolidation is urgent given the country’s fiscal squeeze and high public spending in recent years. If it can see this through, this would be a major success, since subsidy rationalisation might impair Anwar’s popularity amongst low-income households struggling to cope with increased costs of living. .

Implementing the Government Procurement Act is crucial for enhancing transparency and competitiveness in public procurement. But the timeline and drafts of the law have not yet been viewed by external stakeholders and it might be seen as an affront to existing procurement practices, which have been a source of race-based patronage in the past.

It is unclear if Anwar’s government will have the confidence to reform the large swathe of government-linked companies (GLCs) in Malaysia. Many of these were set up to empower the Bumiputera (Malay and other indigenous) communities but have become victims of patronage. GLCs that are uncompetitive and underperforming pose a financial strain on the public sector.

A comprehensive financial and performance review of all GLCs, especially those that are not publicly listed and hence not strictly scrutinised by regulators such as Bursa Malaysia and the Securities Commission, is necessary to determine which ones should continue to exist. The culture of political appointments to the boards of GLCs, which Anwar’s administration has continued, will need to end.

The government has launched ambitious economic plans, including the Madani economy framework, National Energy Transition Roadmap, New Industrial Master Plan and the mid-term review of the 12th Malaysia Plan. Political reform will also be needed to minimise corruption.

To see these strategies through, structural reform efforts are necessary. But if these reforms are seen as eating into the economic share of Malays, Anwar’s administration will face resistance. The better approach would be to demonstrate that these reforms will expand economic opportunities for all and provide a time-bound financial cushion to those hardest hit. The upcoming 2024 Budget Speech, where some of the government’s economic agenda will be announced, is an opportune time to do so.

PH’s reform position is becoming difficult to maintain, particularly after appointing UMNO’s scandal-ridden President Zahid Hamidi as Deputy Prime Minister. The recent action by the public prosecutor to discharge him from all corruption charges is surprising. In Malaysia, the Offices of the Public Prosecutor and Attorney General are held by the same person. If the government does not heed the decades-long call from civil society to separate the two offices to avoid political interference in legal matters, PH will struggle to reclaim its moral high ground. The Minister of Law and Institutional Reform has recently announced plans in this regard, but it needs to be expedited even more urgently given the circumstances.

In playing to the gallery, the current government risks portraying itself as lacking the impetus to reform, which could narrow Anwar’s options. Malaysia must reignite its reform agenda quickly, while communicating the economic benefits to the Malays. But this will prove challenging, especially with an increasingly strong opposition that has used racially divisive language to elevate Malay insecurity.

Dr Tricia Yeoh is CEO of the Institute for Democracy and Economic Affairs (IDEAS), Malaysia, and Campus Visitor at the Australian National University.

Posted in Corruption, Elections, Ethno-Religious Politics, General Politics, Public Administration, Transparency and Good Governance | Leave a comment