In the fight against COVID-19, what can states do?

Posted on July 20, 2021 by Tricia

This article first appeared on Malaysiakini here, on 14 July 2021.

As the country continues to battle Covid-19, several states have attempted to take matters into their own hands. For example, as of July 13, the Sabah and Sarawak state governments allowed dine-in at eateries, despite not being allowed to do so under the federal government’s National Recovery Plan (NRP).

Both states have moved from Phase 1 to Phase 2 of the NRP, whereas the NRP only permits dine-ins for states in Phase 3.

Separately, some have called on local governments in Selangor to use their powers to take stricter measures against factories. The Local Government Act 1976 gives power to local governments to issue operating licences to factories.

So local councils – which receive instructions from the state government – could withdraw licences for factories to operate, superseding the letters that some factories received from the Ministry of International Trade and Industry (Miti) allowing them to continue operating under the enhanced movement control order (MCO).

These incidents call into question the overlapping and conflicting powers of the federal and state governments in Malaysia, which have arisen multiple times since the start of the MCO issuances in March 2020.

Can the states contest nationally-set rules with regard to the MCOs and on what grounds can they do so? What can federal and state governments do better – separately and together – in addressing the public health and economic crises we currently face?

How can cooperative federalism, where both federal and state governments work together flexibly to achieve common goals, be put into action?

Contestation and conflict between federal, state and local governments

First, all MCOs in the country are currently issued under federal law, specifically under the Prevention and Control of Infectious Diseases Act 1988 (PCIDA).

Because a corresponding order defines the “infected area” to include all states and the three federal territories of Malaysia, one legal interpretation is therefore that all states must comply with the MCOs as gazetted by the Attorney-General’s Chambers.

Further, Article 81 of the Federal Constitution requires that states must “comply with federal law to not prejudice or impede the executive authority of the federal government”.

However, an alternative view (that I previously wrote about here) is that the Federal Constitution places public health, sanitation and prevention of infectious diseases within the Concurrent List in the Ninth Schedule, which means that both federal and state governments must jointly decide on these matters.

And since all laws need to adhere to the supremacy of the Constitution, even the PCIDA and all regulations related to it should have had joint state approval. That the states were not meaningfully consulted on the regulation of these MCOs (whether full MCO, enhanced MCO, recovery MCO or otherwise) could be a matter for future debate.

Secondly, what has been obscured by the thicket of government jargon is that the NRP is not grounded upon any law or federal Act. It is just a plan – for now.

Because of this – and precisely because federal and state governments constitutionally have joint jurisdiction over public health, sanitation and prevention of infectious diseases, there is a strong argument to be made that state governments can interpret the finer details of what is entailed within the NRP, either jointly with or separately from the federal government.

Sabah’s Deputy Chief Minister Jeffrey Kitingan has also urged for Sabah to enact state legislation over public health, to avoid confusion over the matter.

Third, it is certainly important to consider the role played by local governments. The Local Government Act 1976 grants local governments a wide array of powers, including the ability to preserve public health and prevent the outbreak and spread of diseases, to regulate and enforce quarantine and the disinfection of persons and of places and things.

Equally relevant is their authority to regulate business operating hours and to set conditions for issuing licences and permits.

While it is true that state governments can direct local councils to withdraw or suspend operating licences from factories as urged by some, this however may not be an ideal move as withdrawals are of a permanent nature and may cause unnecessary bureaucratic hurdles in re-issuing them again.

This would also send a negative signal to investors already jittery about the worsening business conditions in the country, given the prolonged political instability.

Strengthening shared rule and self-rule

What, then, can state and local governments do in the fight against Covid-19? In considering available options, one must consider how to strike that often delicate balance between shared rule and self-rule, where shared rule refers to how subnational units like states can participate in decisions that concern the entire nation, and self-rule refers to the extent to which states can decide, finance and implement their own policies.

First, the federal government must incorporate state governments meaningfully into the decision-making process. What Finance Minister Tengku Zafrul Abdul Aziz as the Coordinating Minister for the NRP must now do – if not already being done – is to consult directly with all heads of state governments, regardless of their political affiliation, on a daily or weekly basis.

However, some questions remain. Will this replicate or replace the role currently played by the National Security Council? Will NRP updates be provided publicly and transparently? Instead of duplicate federal bodies that make top-down decisions, a Federal-State Pandemic Council should be set up immediately that makes states equal partners with the federal government.

Regardless of institutional set-ups, a free flow of data must be exchanged regularly between federal and state governments with regard to:

  • Sources of infection (raw data, as well as analysed data on clusters, positivity rates and more)
  • Testing (location, number and types of tests being carried out)
  • Vaccination (location, number and types of vaccinations being given)

This includes a regular exchange of data from respective state government mobile applications, such as Selangor’s SELangkah.

Second, as called upon by many, the federal government must decentralise the vaccination process more widely. Again, it is a good thing that states like Selangor have begun trying to procure their own vaccines independent of the federal government’s National Covid-19 Immunisation Programme.

States can independently procure vaccines if they have the resources to do so. State governments (and through private initiatives like Pikas) should also be allowed to embark on massive vaccination education programmes, including public relations campaigns to discourage vaccine hesitancy, which is still a problem, especially in the more rural constituencies.

Third, the federal government should consider devolving some of the decision-making over lockdowns and loosening up of lockdowns to state governments. State and local governments are in closer proximity to the affected areas and are thus in better positions to make informed decisions over potential highly infectious areas.

This is premised on subsidiarity, which is the principle that a central authority should have a subsidiary function and perform only those tasks that cannot be performed at a more local level. Successful pandemic management in some states may further incentivise other states to mimic best practices.

Conversely, state and local governments should also be empowered to decide over loosening strict lockdowns, especially in green zones where small businesses should be allowed to operate.

Small traders and micro, small and medium enterprises (MSMEs) in low-risk districts should not have their livelihoods adversely affected if it is safe for them to operate.

Instead of painting the entire state as high-risk, more detailed and systematic analysis over which districts or regions within states are safe should be conducted.

Strict compliance of SOPs (for instance, not crossing between districts) can be monitored, but within those green bubbles – and the geographic lines can be jointly determined between local and state governments – activities should be allowed to operate.

Schools within these green bubbles should therefore also be allowed to reopen. On this note, all teachers and educators should be given priority in the national vaccination programme.

Emergency as a wild card – and long-term planning

On a final note, there may be questions arising as to the impact of the emergency on state rights. No regulation or plan was actually implemented by the federal government with regard to combatting Covid-19 itself.

But because the current emergency extends throughout the country, the federal government could therefore dictate state government behaviour and step into state public policy matters, which includes how state governments manage the NRP.

Hence, if the federal government wants to, it could legally step in to take action against the Sabah and Sarawak state governments under the guise of the emergency.

However, this will be greatly unpopular, especially since the emergency is slated to end in less than a month from now, on Aug 1.There is a possibility that the present federal government will request for the emergency to be extended, but this would be a foolish move by all measures.

Finally, over the longer term, there should be a consideration over moving Medicine and Health from the Federal List in the Constitution to the Concurrent List.

As of July 2021, public hospitals in the Klang Valley are critically short of medical equipment (which private initiatives such as this have resorted to raising funds for).

A state like Selangor which has adequate financial resources to support such distressed hospitals would be able to contribute funds, which it currently is not permitted to.

Malaysia needs to prepare for future pandemics or medical emergencies. Emerging from Covid-19, the public healthcare system will require innovative and sustainable financing.

The Covid-19 pandemic continues to pose important questions as to the dynamics of the relationship between the federal and state governments in Malaysia. Developments over the last one and a half years reveal that it is time for a thorough review to be done over the Ninth Schedule.

In our highly administratively centralised government, steps can be taken in the immediate future to consider how some – not all – public policy or health policy areas can be decentralised to state and local governments for increased efficiency, effectiveness, responsiveness and equity.

While national standards and norms can be set by the centre, state and local governments should be empowered with the capacity, skills and knowledge to implement these regulations. A national crisis is a good time to begin the decentralisation planning process.

TRICIA YEOH is the CEO of the Institute for Democracy and Economic Affairs (Ideas). She is also a PhD candidate at the University of Nottingham Malaysia.

Posted in Federalism, Health, Public Administration | Leave a comment

Will Pakatan Harapan’s Hold on Selangor Continue?

Posted on January 22, 2021 by Tricia

This was published as a Trends by the ISEAS-Yusof Ishak Institute in January 2021, and the full publication can be accessed here.

Executive Summary

• When the Pakatan Harapan (PH) federal government fell in
February 2020, PH also lost control over the states of Johor,
Malacca, Perak and Kedah. In Sabah, PH-aligned Warisan was
replaced by the PN-aligned United Alliance of Sabah.


• PH maintained its hold on three states—Selangor, Penang and
Negeri Sembilan. Selangor’s position is of unique interest, given the
largest share of PH assemblypersons comprising members from the
People’s Justice Party (Parti Keadilan Rakyat, or PKR), the party
which has faced significant elite splits in 2020.


• The present stability of PH’s survival in Selangor can be accounted
for by the sheer majority it possesses within the legislative
assembly, comprising forty-one out of fifty-six state seats. Unless a
significant share of assemblypersons were to defect, the change in
state government would be highly unlikely.


• PH built a strong base in Selangor during its time in power over
more than a decade, securing performative legitimacy and rooting
itself strongly within the community.


• PH has benefited from the highly urbanized and educated
demographic profile of Selangor. However, the economic fallout
from the COVID-19 pandemic has likely changed the landscape,
which may in turn affect how constituents will now respond to
goodies offered by the federal government.


• Although PH in Selangor has survived the national storm, its future
performance remains uncertain. This year’s political realignment,
public opinion towards PN and the 2018 redelineation exercise
where the number of Malay-majority seats has grown may hamper
PH’s ability to maintain its strong margin.

Posted in Federalism, General Politics, Selangor | Leave a comment

State Governments and the 2021 Emergency: Unfettered Powers at the Centre

Posted on January 22, 2021 by Tricia

This commentary was first published on Fulcrum, ISEAS-Yusof Ishak Institute’s commentary website, here on 22 January 2021.

On 12 January, the Agong and the Prime Minister separately announced that the former had approved an Emergency Declaration for Malaysia that took effect as of 11 January. The justification for this decision was the seriousness of the Covid-19 situation, which in fact was already being dealt with by the Movement Control Order 2.0 to begin on 13 January. The Emergency has been considered by several analysts as unnecessary given the existing MCO.

That said, what are the implications of the Emergency on the 13 state governments throughout the country? What has been rigorously discussed is that Parliament is suspended and no general election will take place. On that note, state legislatures are also suspended and no state election will be allowed throughout this period. The most immediate implication of this is that the Sarawak state election that is due to be held by 17 August this year may have to be postponed – if the Emergency is prolonged beyond the scheduled end date of 1 August.

According to Emergency Ordinance 2021, the state governments and their executive councils or cabinets are still in power. Their legislative assemblypersons (Ahli Dewan Undangan Negeri, or ADUNs) are also supposed to continue carrying out their duties. On the surface of things, it would seem that the status quo remains since all state governments will carry on as per usual, exercising both their executive and legislative functions.  

In reality, there are many questions that arise.

First, without the legislators actually being permitted to conduct legislative assembly sittings, it will be impossible for ADUNs – as their federal counterparts in Parliament – to perform their “legislative functions” like scrutinise budgetary expenditure, amend or legislate new laws, or provide oversight over any executive decisions being made. Motions of confidence – or no confidence – will also not be voted upon during this period.

While it may be feasible for select committees to meet online, there has not been any precedent of the entire legislative assembly sitting taking place online. And even if permitted, not all legislative assemblies especially in the more rural parts of Malaysia may have the necessary internet connections and bandwidth to do so. So how will state assemblypersons actually exercise their legislative functions?

Second, can the federal government intervene into state affairs? The Federal Constitution says it can. Article 150(4) gives the federal government overwhelming powers to intervene into state matters during an Emergency. Despite the legitimacy of state governments, the federal government can legally step in to direct state governments to act in ways they dictate. The only exception to this would be for matters under Islamic laws, Malay customs, native laws or customs in Sabah and Sarawak, religion, citizenship or language. This is in line with Article 150(6A).

The federal government could very well step into state public policy matters, instructing state governments to transfer state land to the federal government, take over control of local councils, replace local councillors with their own appointees, and more. The Ninth Schedule of the Federal Constitution spells out what state governments control, the list of which includes land, local government, and agriculture and forestry. Regardless of whether this will actually happen, the fact is the federal government can legitimately step in to take control, and that’s alarming.

Finally, the Emergency also paves the way for political intervention of the centre in the case of inter-party or intra-coalition leadership disputes. In the past, the federal government did in fact declare states of emergency in several states when there were political disputes, and these resulted in changes in state governments: in Sarawak in 1966, and in Kelantan in 1977. The question is whether the current federal government would make use of the present Emergency to do the same within states if there were uncertainties surrounding the confidence of a certain leader’s majority, and hence command of the assembly.

While there are serious consequences of the Emergency at the national level, the effects at the state level are equally as chilling if followed through. In short, the Emergency has provided the Executive arm of the federal government unfettered powers, giving it far-reaching abilities to intervene into the very intricate functioning of all 13 state governments throughout the country if it so wished. Some have expressed frustration at having included Sarawak into the national emergency too; Sarawak had only recorded less than 2,000 cases when the emergency was announced. Indeed, these sentiments are fair.

It remains to be seen when the Emergency will be called off, and it would be wise at that point in time to examine what – if any – consequences would have been on the state governments then. Would state legislators really be permitted to perform their legislative functions as set out by the Emergency Ordinance? Would the federal government have intervened in any public policy matter under the states’ constitutional control? Would they have interfered politically in any state-level leadership disputes that arose? The next few months will provide a hard look into how the federal government might use its Emergency powers to intervene in state governments’ functions.

Posted in Federalism, General Politics | Leave a comment

Don’t derail EU-Malaysia trade relations because of palm oil biofuel

Posted on December 30, 2020 by Tricia

This article was first published in The Edge Malaysia here on 22 December 2020.

Malaysia recently agreed to join and ratify the Regional Comprehensive Economic Partnership (RCEP), which was welcomed and celebrated after many years of long negotiations.

However, one other trade deal has faced significant challenges, that of the Malaysia-EU Free Trade Agreement (MEUFTA). Negotiations began in 2010 but stalled in 2012. In 2016-17, a “stocktaking exercise” took place to assess if negotiations could resume, but since the 14th general election in 2018, there has been no action on the renegotiations.

One of the main stumbling blocks preventing the resumption of MEUFTA negotiations is the EU’s contention over Indonesia and Malaysia’s palm oil biofuel. In March 2019, the EU adopted the Delegated Regulation for its second Renewable Energy Directive (RED II), which has upped the tension over the EU’s concerns regarding biofuels.

In short, the EU aims to completely phase out the use of palm oil biofuel by 2030, on the grounds that oil palm plantations contribute to a larger carbon footprint than the forests they replace and hence are a threat to climate change. Following the decision, Indonesia filed a lawsuit against the EU last December, and since then Malaysia is reportedly planning to file a legal action with the World Trade Organization (WTO), claiming that the EU’s policy is “discriminatory” and “unreasonable”.

The political tension over the issue is set to continue. Malaysia has always been firm on its stand. Under the Pakatan Harapan (PH) government, the then Primary Industries Minister Teresa Kok termed the EU policy “the politics of protectionism”, which the present Perikatan Nasional (PN) administration’s Plantation Industries and Commodities Minister Dr Mohd Khairuddin Aman Razali has taken further in instituting legal action against the EU. In fact, he asserts that this discrimination by the EU brings adversity to “more than three million Malaysians involved in the palm oil industry, as well as over half a million oil palm smallholders”.

So, what is the EU actually doing? It is now saying that palm oil biofuel does not count towards renewables targets. This does not mean it is banned but that it would not qualify to obtain the subsidies and reliefs which other renewables benefit from.

What is the justification for this? The EU’s position is that, first, oil palm plantations are a deforestation threat, resulting in a number of problems. Many plantation owners choose to clear their land for the following year’s cultivation through burning, which contributes to carbon emissions and has led to the region’s perennial air pollution of haze.

Second, the EU believes that biodiversity is reduced as the rainforest ecosystem, the habitat of wildlife, is destroyed owing to deforestation for oil palm plantations. According to the International Union for Conservation of Nature (IUCN), oil palm estate expansion is a threat to 54% of the world’s threatened mammals and 64% of the world’s threatened birds. With the implementation of RED II, the EU hopes to preserve wildlife such as orangutans, gibbons and tigers.

Third, the EU recognises that the global population is estimated to grow to 9.7 billion by 2050 and expects that food demand will rise by more than 50%. Thus, it is essential to make more efficient use of agricultural land. Forest management has become crucial for the purpose of food security in the future. The EU therefore wants to avoid any policies which promote the use of land to produce biofuels over food.

It is important to recognise that the action by the EU is not a “ban” per se, and also is motivated by important sustainability concerns which Malaysia needs to take heed of. However, there are also a number of problems with the approach taken by the EU. First, the EU is taking this action unilaterally. Without the collaboration of other major palm oil importers such as India and China, the demand for palm oil is expected to shift to other markets rather than reduce. Consequently, palm oil producers may need to lower their price to clear the surplus in other markets which ultimately promotes demand for palm oil, leading to a net increase in unsustainable production and deforestation.

Second, the policy is applied as a blanket policy to all palm oil — punishing sustainable and unsustainable producers alike.

Third, imposing universal sustainability certification standards may amount to a disproportionate cost burden inflicted on producers and smallholder farmers. A recently released report by the European Parliamentary Research Service has in fact concluded that smallholder farmers in Malaysia could be forced to deal with an average of 8% loss in net income per hectare.

As the cost is borne by producers and passed to EU consumers through higher prices, this may prevent smallholder producers from being certified. In fact, this certification is only required of “foreign” producers, suggesting that the move “could be considered by the WTO as arbitrary or hidden protectionism”.

Finally, the methodology for disqualifying palm oil, but not other products such as soya and rapeseed, has been criticised as being arbitrary. This exacerbates the perception that the move is protectionist as it favours biofuels produced in Europe and North America.

Aside from these issues, perhaps the biggest gripe Malaysia has with the EU action is the role it plays in the broader narrative that palm oil is unsustainable. Following an effective consumer-driven movement, palm oil has been associated with deforestation and the destruction of natural habitats. And it is this negative perception — which affects all palm oil products, not just biofuel — which is what worries Malaysia the most.

So, how should we move forward? First, we need to recognise the validity of the arguments on both sides. Yes, the EU’s policy may be flawed. But it is also being misrepresented as a ban and reflects important sustainability concerns that Malaysia needs to take seriously. We also need to put the issue in its proper perspective: Dr Ruslan Abdullah, director of science and environment at the Malaysian Palm Oil Council, stated at an IDEAS forum in 2019 that about 800,000 out of 19.5 million tonnes of palm oil were exported by Malaysia to Europe for use in biofuels, which indicates that EU’s phasing out only affects 4% of Malaysia’s annual palm oil.

Second, we need to address the bigger issue of the negative perception of the palm oil industry. Instead of crying that it is not being fair, Malaysia must make concrete improvements. The country has been making progress towards sustainability: as at Dec 1, 2020, 88.1% of Malaysia’s oil palm plantations had Malaysian Sustainable Palm Oil (MSPO) certification. However, the MSPO is not regarded as being as strict as the international Roundtable for Sustainable Palm Oil (RSPO) standards, and a number of recent cases highlight ongoing concerns in connection with Malaysia’s palm oil industry.

Finally, we need to ensure that we manage this issue without compromising Malaysia’s broader relationship with the EU. Yes, palm oil is important — but palm oil products other than biofuel would benefit from liberalised trading terms, which an FTA could deliver. Not to mention the rest of Malaysia’s economy, which could benefit from increased trade and investment from one of the world’s largest trading blocs.

So, let us move forward constructively through dialogue in the best interests of palm oil and Malaysia as a whole.

Posted in Economics | Leave a comment

Federal-State Relations under the Pakatan Harapan Government

Posted on November 6, 2020 by Tricia

This was published as a “Trends” by the ISEAS-Yusof Ishak Institute Singapore, at which I am a Visiting Research Fellow (July to December 2020) in October 2020.

The full publication can be accessed here.

Executive Summary

• On 9 May 2018, Malaysia’s Barisan Nasional (BN) government lost
the country’s 14th general election (GE14). Replacing it was the
Pakatan Harapan (PH) coalition, made up of four parties, three of
which had had experience cooperating with each other for a decade,
namely Parti Keadilan Rakyat (PKR), the Democratic Action Party
(DAP) and Parti Amanah Negara (Amanah). The fourth was the
new Parti Pribumi Bersatu Malaysia (PPBM) led by Dr Mahathir
Mohamad.


• The election also saw equally significant changes at the state
government level. PH now controlled seven states in total, up from
two, while BN went from controlling ten states to retaining but two.
PAS regained Terengganu and with its control over Kelantan now
held the two East Coast states. The Sabah state government, held by
Parti Warisan Sabah (Warisan) aligned itself with PH, while the
Sarawak state government chose to stick with BN.


• As many as ten of the sixty promises listed in the PH 2018 election
manifesto related to federalism and Sabah and Sarawak, an
indication of the growing importance of these two states (and of
state issues more generally).


• The PH administration’s two significant set-ups were the Special
Select Committee on States and Federal Relations and the
Special Cabinet Committee on the Malaysia Agreement 1963
(MA63). Serious attempts were made to address concerns by
both committees, with achievements being more visible in the
Special Cabinet Committee on MA63, possibly due to the greater
attention given on Sabah and Sarawak. Issues brought up within
the Parliamentary Special Select Committee were not substantively
addressed.


• PH’s time in power saw how states aligned to it maintained a
smooth working relationship with the federal government. What was
more interesting to note was that even non-PH aligned states such as
Kelantan, Terengganu and Perlis also received favourable attention
from the federal government.


• Federal-state relations were much more aggressively tackled under
the PH government than under any other preceding administration.

Posted in Uncategorized | Leave a comment

The Rise and Fall of State Governments in Malaysia: Institutions, Constitutions and Political Alignment

Posted on October 6, 2020 by Tricia

This piece was published as a “Perspectives” by ISEAS-Yusof Ishak Institute Singapore, at which I am currently a Visiting Research Fellow (July to December 2020), on 11 September 2020.

The full publication can be accessed here.

EXECUTIVE SUMMARY


• The Pakatan Harapan-aligned Sabah state government held by Parti Warisan Sabah (Warisan) fell in late July 2020 when 13 state assemblypersons defected to align with former Sabah Chief Minister and Sabah Barisan Nasional chairman Musa Aman.


• The Sabah state election will be held on 26 September 2020, ahead of a general election which is widely expected to be called before the end of the year. The outcome of the Sabah state election will therefore carry important lessons for all political parties at the national level in crafting their political strategies.


• Historically, political alignment with the federal government seemed to be the most decisive factor in shaping the outcome of state government formation. Nonetheless, the Rulers or governors of respective states have played a crucial role on various occasions, by exercising their discretion on whether it was appropriate to appoint a new Chief Minister or allow the dissolution of a state legislature to hold new elections. The Rulers in turn have to operate within the framework of the state constitutions.


• The electoral strategies at state level have become extremely complicated, given the existence of multiple parties, the fluidity of their collective and individual members’ political loyalties, and the ongoing negotiations over leadership and prime ministerial candidacies.

Posted in Uncategorized | Leave a comment

Federal-state friction amid Malaysia’s dual political and pandemic plight

Posted on August 15, 2020 by Tricia

This was first published on New Mandala on 12 August 2020 here. This is a short version that summarises the key thrusts of the larger report that can be found here. This article (and the corresponding report) is part of a New Mandala series related to the Supporting the Rules-Based Order in Southeast Asia (SEARBO) project. This project is run by the Department of Political and Social Change at the Australian National University and funded by the Australian Department of Foreign Affairs and Trade.

Malaysia’s Pakatan Harapan (PH) government fell after a prolonged leadership tussle in February 2020, and the new Perikatan Nasional (PN) government was installed on 1 March. Amid the political uncertainties came the COVID-19 crisis. How have the twin shocks of political crisis and the pandemic affected federal-state relations? How have federal-state relations in turn impacted government responses to the pandemic and national political dynamics?

Malaysia was established as a constitutional federation in which the individuality of its 13 states was to be clearly maintained. Over the years however, state powers have gradually eroded. Local council elections were abolished in 1965. The Senate, meant to be the ‘house of the states,’ now skews to the centre with more federally-appointed than state-appointed members. The Federal Constitution 1957 itself contains several articles that allow for a strong central government, for instance providing that federal law prevails over state law in the event of inconsistency. Other institutional and legal changes have further weakened state autonomy.

Given these constraints, political shifts at the national level invariably affect outcomes within states in a number of ways, not least the distribution of institutional and fiscal resources. The COVID-19 crisis crucially tested the boundaries of federal-state relations when decisions from the centre were not always received well by state governments. States also took the initiative to manage public health in unconventional ways. A longstanding dispute over autonomy in the East Malaysian states of Sabah and Sarawak has also created opportunities for new political alignments, as well as reignited the debate over oil rights. The author’s research unpacks these federal-state tensions and explores their implications and ramifications in further detail in the downloadable report below.

National-level politics impacts downwards resource allocation  

Malaysia is politically centralised, with both administrative and fiscal decision-making gravitating towards the centre. Any political change at the federal government level invariably impacts upon downward resource distribution. The political crisis in 2020 did precisely that: machinations at the national level directly precipitated changes in several state governments.

PN gained the lion’s share of states with 8 in total: Kelantan and Terengganu (the 2 East Coast states led by PAS), Perlis and Pahang (already UMNO states), and the 4 wins of Johor, Malacca, Perak and Kedah. This left PH with only 3 states, down from 7: Selangor, Penang and Negeri Sembilan. Within the newly-acquired PN states, individuals affiliated with PN immediately replaced PH nominees within the boards of government-linked companies (GLCs), and for local councilor and village committee appointments.

Given the highly centralised nature of resource distribution in Malaysia, states affiliated with the federal government invariably stand to gain by being granted access to greatly demanded resources. Members of parliament newly in opposition have had their constituency development funds (CDFs) effectively cut off, affecting their ability to provide aid for their constituents amid the pandemic. At the height of the COVID-19 crisis, there were reports of unequal access to food basket aid at both the national and state level. Punishing the opposition in discriminatory resource allocation seems to have been a tactic employed by both sides of the political divide. In Selangor, a PH-controlled state, PN-aligned state assemblypersons were also denied special COVID-19 funding allocations.

Opposition-led states will also invariably face difficulties in funding projects. For instance, Penang’s Transport Master Plan may no longer receive federal guarantees for the bonds needed to fund the large infrastructure project. Given highly-charged corruption investigations against former Chief Minister Lim Guan Eng and his recent arrest, the entire project’s viability may be under question.

The pandemic’s effects on federal-state relations

The COVID-19 crisis has offered an important study of the legality and constitutionality of Malaysia’s three-tiered system of government. When the federal government made plans to open up the economy under a relaxed version of the country’s movement control order, it did so in a way that did not meaningfully include the states. 9 out of 13 states chose to defy the order, including 3 that were aligned with the PN government (Pahang, Kelantan and Sarawak). There are two opposing legal views: one considers that going against federal law was extra-constitutional, while the other considers that states were within their full legal rights.

Based on the first legal perspective, states would be considered in contravention of federal law because the decision to open up the economy was carried out under the Prevention and Control of Infectious Disease Act 1988 (Act 342)—a federal law. A related federal order defines an “infected area” to include all states and federal territories in Malaysia. The constitution does require that states comply with federal law, stating that they should not “impede or prejudice” the federal government’s exercise of power.

The other perspective emphasises that the Federal Constitution defines “public health, sanitation and prevention of infectious diseases” within the Concurrent List, where authority is shared between the federal and state governments. Further, the Local Government Act 1976 gives local governments (which come under state purview) the authority to preserve public health and prevent the outbreak and spread of diseases.

Whatever the legal constraints, many state governments went ahead to take COVID-19 management into their own hands. Sarawak, Sabah, Penang and Selangor stand out, but many others also disbursed their own aid packages, developed their own contact tracing applications, created state-level COVID-19 crisis teams and co-operated well with federal health agencies.

States are playing a crucial and underreported role in managing the twin public health and economic crises—so much so that their experiences put to question whether the constitutional boundaries continue to be relevant. States, despite not having full legal control over public health and the economy, are able to meaningfully contribute to these areas anyway.

Oil politics amid political contestations

Longstanding federal-state tensions over oil rights have also arisen over the past months, affecting both the national political uncertainty and the response to the pandemic. The Eastern oil-producing states of Sabah and Sarawak, along with Kelantan and Terengganu on the eastern coast of Peninsular Malaysia, have in recent years escalated their demands over rights to oil and gas resources.

Given that the current PN government is operating on a razor-thin majority (PN’s recent appointment of the speaker in parliament received a majority vote of just one), both sides of the political divide are continuously wooing MPs from Sabah and Sarawak. Negotiations over hotly contested issues such as oil have invariably turned political.

Both Sabah and Sarawak have previously demanded increases in oil royalties, and it has been reported that current Prime Minister Muhyiddin is willing to make these concessions. National oil-producing company Petronas played a crucial role in easing federal-state tensions by paying a highly-disputed sales tax to Sarawak, which was reportedly linked to the premature departure of its CEO. Petronas, through revenues raised from oil and gas resources, contributes 19 percent of national revenues annually. Fiscal pressure will likely increase in the near future as the economy struggles to pick up amid a global recession on the back of COVID-19 and the US-China trade war.

Further evidence of East Malaysia’s prominence amid national political contestations came with former premier Mahathir Mohamad’s sudden announcement that he would support Sabah Chief Minister Shafie Apdal as a prime ministerial candidate, in a bid that would seemingly recognise the role and contribution of East Malaysia at the national level. National-level politics directly led to the dissolution of the Sabah state government at the end of July when 13 state assemblypersons defected to join a PN-aligned political leader. The nation will soon see the first full state-wide election since the change in government this year.

What are the long-term prospects for federal-state relations? The pandemic has shown federal and state governments can work in harmony, and that states can emerge with innovative solutions to public policy problems. These recent experiences may even provide state governments with the impetus to explore how they can deepen their autonomy in domains outside of public health.

Ultimately though, political alignment with the federal government determines outcomes at the subnational level. One PN minister has already encouraged Sabah voters to support the state coalition which shares the aspirations of the federal government in the upcoming state election. Meanwhile, Mahathir Mohamad’s announcement in early August of plans to establish a new political party, with early signs that several state leaders will defect from Bersatu, may further affect the stability of state governments. Malaysia’s dual political and pandemic plight has shed light on federal-state relations, but has not yet substantively altered its arrangements.

Posted in Federalism, General Politics | Leave a comment

Federalism and the COVID-19 Crisis: State-Federal Tensions Arise in Malaysia

Posted on May 26, 2020 by Tricia

I have been using the Forum of Federations website quite a bit in my research, so very pleased to have written this piece for their “Federalism and the COVID-19 Crisis” series for Malaysia.

This was first published on the Forum of Federation website on 26 May 2020, and is available here.

Federalism and the COVID-19 Crisis: State-Federal Tensions Arise in Malaysia

Tricia Yeoh

Already a highly centralised federal system, the COVID-19 pandemic led Malaysia’s federal government to adopt even more top-down approaches in managing the public health crisis. Led by a new political coalition barely two weeks old when the crisis emerged, the federal government – through its National Security Council (NSC) chaired by the Prime Minister – would be the primary decision-making platform in responding to the crisis. The measures issued by NSC included for a strict movement control order (MCO) that would last six and a half weeks between 18 March and 3 May in which, with the exception of essential goods and services, all industries were mandated to close. The NSC would also later make the decision to open up the economy under a conditional MCO (CMCO), in which most industries were allowed to resume operations beginning from 4 May.

In its very first meeting to discuss COVID-19 mitigation plans, the government excluded the heads of state governments controlled by the opposition coalition, although later it reversed this decision and invited the subnational leaders to subsequent meetings. This sparked initial tensions between the federal and state governments, which would later flare up again when states were not meaningfully consulted.

The law used to enforce the MCO and the CMCO is the Prevention and Control of Infectious Disease Act 1988, which sets out which authorities are permitted to act and under what circumstances during an outbreak. The Prevention and Control of Infectious Diseases (Declaration of Infected Local Areas) Order 2020 defined the “infected area” to include all states and three federal territories in Malaysia.

Unlike some countries that announced that their versions of a lockdown would last for a month or more, to be potentially extended once or twice before easing, the authorities in Malaysia only declared the MCO extensions every two weeks. As such, up to the end of the strict MCO, there were four different phases, each of which had regulatory variations that often caused negative unintended consequences. For instance, initially people required police permission for people to travel between states. But the requirement was dropped when thousands of Malaysians crowded police stations before the deadline, causing even more public contact en masse. Interstate travel was later restricted only to industries with official authorization, but many companies could not obtain approval quickly enough within the respective phase of the MCO, before different rules were introduced in the following phase. Having slightly amended rules for different phases caused some confusion amongst the public, requiring them to check the new regulatory requirements every two weeks.

State governments also issued their own regulations for business operating hours of shops, eateries, petrol stations, and markets. They are empowered to do so because local governments have the authority to regulate operating hours, and to set conditions for the issuing of licenses and permits (which they issue). Crucially, local governments fall under state jurisdiction as provided for under the Federal Constitution’s Ninth Schedule. The Local Government Act 1976 is a robust piece of legislation that grants local governments, amongst other powers, the ability to preserve public health and prevent the outbreak and spread of diseases, and to regulate and enforce quarantine, the disinfection of persons, and the disinfection of places and things. Of course, if any of these measures had been in direct contravention of the federal government’s legal requirements under the MCO, the federal law would prevail. Article 81 of the Federal Constitution says that state government authority must be exercised so as not to impede or prejudice the exercise of the federal government’s executive authority.

The legal interpretation of this principle became much more pertinent when the federal government abruptly announced that the MCO would ease, giving only three days’ notice. Nine state governments in total reacted immediately by saying they were either not following (Kedah, Sabah, Pahang, Penang, Kelantan and Sarawak) or not fully complying (Selangor, Perak and Negeri Sembilan) with the easing of the virus control measures concerning economic activity, otherwise known as the CMCO. They believed that the reopening of all sectors and industries was too abrupt, arguing that buffer time was needed to allow state governments and companies to adopt new standard operating procedures (SOPs) to ensure hygiene and public health.

Some experts cited Article 81 (above) in arguing that states must adhere to the federal law of the Prevention and Control of Infectious Diseases Act 1988, because all states had in 1989 agreed to promulgate a uniform law to prevent and control infectious diseases in Malaysia, enforceable throughout the country. There is, however, an alternative, and equally compelling, view advanced by other experts. This is that states have the right to defy the federal government’s law is based on the fact that the Federal Constitution places public health, sanitation, and prevention of infectious diseases within the Concurrent List in the Ninth Schedule. It is also bolstered by the provisions of the Local Government Act as described above. Since all laws must adhere to the supremacy of the Federal Constitution, this means that both federal and state governments are to jointly decide on issues pertaining to these areas with equal weight.

Because the Constitution is vague on how “joint decisions” are to be made, it has never been clear whether state legislative assemblies need to vote on a particular matter of concurrent interest – and further, pass state-level legislation to that end – or whether mere ‘consultation’ is all that is required. At a meeting held on 28 April between the federal and state governments, the gradual reopening of the economy was apparently raised by the Prime Minister. However, one state government chief executive (the Chief Minister of opposition-led Penang) claims that the following approach was agreed at the meeting: first, the “District Risk Reduction Programme” proposal by the federal Ministry of Health was for only “green zones” to be reopened; second, the official SOPs were to have been shared with all states in advance of any reopening; and third, the states were to have been given time to strategise. However, the federal government proceeded on 1 May to announce that all zones – green, orange, red – would simultaneously reopen on 4 May, without informing the states or sending them the SOPs.

The federal government responded harshly with a statement saying that companies may possibly sue state governments if they refused to reopen. This was rebutted by the Penang state government, which stated that it was prepared to face legal challenges from industry players “if that is the repercussion for protecting its people” from the pandemic. While there may be different interpretations as to the legality of states’ non-compliance, it is evident that in order for any solution to the COVID-19 crisis and its accompanying economic fallout to work, it must win the support of everyone in the country, across all states and sectors.

The experience of tackling the COVID-19 crisis has highlighted yet again the tensions between federal and state governments in Malaysia. The new reality is that state governments, regardless of political affiliation (five out of the nine non-complying states were in the same political coalition as the ruling government), will begin to seek to exercise their legitimate constitutional rights more actively. Although Malaysia has been accustomed to a strong, highly fiscally and administratively centralised federal government since its independence in 1957, this is now very likely to gradually change. Federalism formed the very foundations of the nation, and states and local governments are well-placed to determine their own risk levels. They are better suited to comprehend the unique needs of their respective states’ geographic and demographic circumstances. In fact, alongside the federal government’s fiscal stimulus package of approximately RM30 billion, many states complemented this by implementing their own aid packages to small businesses, frontline health workers, and low-income households.

The COVID-19 crisis is unlikely to end anytime soon, with some experts predicting it will take as long as 18 months before a vaccination is publicly available. In order to obtain the buy-in of all segments of society within all states required to deal effectively with the impact of the virus, the federal government’s decision-making processes will have to adapt to be more meaningfully inclusive and consultative. There is also growing concern that by choosing not to table the economic stimulus package in Parliament for debate and approval, this exacerbates the federal government’s executive dominance with no room for scrutiny from amongst parliamentarians, the latter of whom would represent states across the country. Finally, the federal government is also faced with greater pressures on its public purse, as oil prices have plummeted – approximately 20 percent of Malaysia’s national revenues are derived from oil – and its fiscal deficit is growing as a result. Decentralising the country’s fiscal management will permit states to take some responsibility for the nation’s post-crisis economic recovery. In the long run, whether or not the federal government recognises it, the COVID-19 crisis has decentralised governance in ways that will change public administration in Malaysia for good.

Posted in Federalism, Healthcare, Public Administration, Transparency and Good Governance | Leave a comment

The Political Economy of Federal-State Relations: How the centre influences resource distribution to the periphery

Posted on May 14, 2020 by Tricia

IDEAS has just released my policy paper, which can be downloaded here.

The media statement released together with the paper is pasted below.

IDEAS: The federal government must distribute resources fairly, regardless of political affiliation

KUALA LUMPUR, 14 MAY 2020: IDEAS has published Policy IDEAS No. 63, “The Political Economy of Federal-State Relations: How the centre influences resource distribution to the periphery”, authored by IDEAS Fellow, Tricia Yeoh. The paper is the second in a series of policy papers on federalism in Malaysia.

Despite Malaysia being set up as a federation, it is highly centralised fiscally, where states and local governments do not have much fiscal-raising powers. The paper shows how the federal government’s control of how financial resources are distributed downwards (to states, local governments and communities) began in a highly politicised environment during the Tun Abdul Razak years. These patterns of political determination continue today, done through highly unequal Constituency Development Funds (CDF) and other “politico-bureaucratic” set-ups.

The author opines that the current system is not sustainable, as it causes politicians to seek alternative sources of political funding if they cannot access it from the federal government in an impartial and unbiased way. This is to be expected as one of the core duties of politicians is to serve their constituents. The CDF model should also be reconfigured to reduce financial dependence on politicians, especially in urban areas. Development funds can instead be disbursed through existing institutions like local governments and land district councils.

The paper recommends four steps to encourage more systematic and rules-based resource distribution from the top down, namely:

1. Provide greater fund-raising flexibility for state and local governments

2. CDF allocations to be given regardless of party affiliation

3. Table a CDF Bill in Parliament

4. Abolish the duplicate Federal Kampung Community Management Councils (MPKKPs) across all states

The first paper in this series, “Reviving the Spirit of Federalism: Decentralisation Policy Options for a New Malaysia” can be downloaded here.

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

Reporting on the Reporters (in August Man Magazine)

Posted on May 14, 2020 by Tricia

Thank you August Man Magazine for including me in its feature in conjunction with World Press Freedom Day on 3 May. The full piece can be found on its website here. They also kindly sent me a PDF version of the piece here.

Media Watch: Reporting on the Reporters (Part One)

Celeste Goh

With May 3 being World Press Freedom Day – a day proclaimed by the United Nations General Assembly in 1993, following the commemoration of the Windhoek Declaration two years prior (a statement of free press principles put together by the newspaper journalists in Africa during a UNESCO seminar in Namibia) it is a day for media professionals around the world to reflect on the issues of press freedom and ethics, with this year focusing on “Journalism without Fear or Favour.” While the annual conference in The Hague, Netherlands may have been deferred to October due to the ongoing pandemic, nevertheless, we celebrate the industry in our country that has been doing its journalistic job without fear or favour – going as far as compromising personal safety to deliver the latest and truest news to the general public.

Tricia Yeoh

Awaiting Justice Still 

The body of formal political aide Teoh Beng Hock was found in the premise of Plaza Masalam in Shah Alam on July 16, 2009, having fallen from a window of the Malaysian Anti-Corruption Commission (MACC) office on the 14th floor. This was following the custody he was brought into for questioning by the MACC the day prior, which allegedly lasted about nine hours, well into the wee hours of the morning. Caught in the middle of this hubbub was Tricia Yeoh, who was then a research officer at the Chief Minister’s office for the Selangor State Government. Merely six months into her job then, Yeoh was in charge of managing Teoh’s case on behalf of the state government, and coordinating with Teoh’s family, lawyers and the forensic pathologist team during the inquest. When she left her position at the Chief Minister’s office in 2011, the case of Teoh’s mysterious death remained unresolved. According to Yeoh, it plagued her mind: “The case made an impact on me, because I was a personal aide to one of the state government leaders, [the then Selangor Chief Minister Tan Sri Khalid Ibrahim], just like him. The thought on many minds at the time was that ‘it could have been me.’ The fact that he was a young man full of hope, wanting to help a new state government that had just come into power in Selangor, was all the more tragic.” That very thought itself pushed Yeoh to apply for a grant from the Freedom Film Festival (FFF), a 2003-established platform for filmmakers and activists to showcase and advocate their thought-provoking films to the Malaysian public. The Rights of the Dead premiered at the festival in 2012, a documentary directed by Yeoh herself, and produced by Pusat Komas. “I felt that it was important to document the details of the case, so that it would continue to live on in the public’s mind, especially for such a significant case that involved someone’s death,” Yeoh explains. “It was also important to me to highlight the way that federal government institutions at the time were used to advance certain political objectives, given that the Selangor government was controlled by a political coalition that was opposing the federal government.” July last year was Teoh’s 10-year death anniversary, and very much to the public’s bafflement, the case remains open – even till this day. Five years after the 2014 Court of Appeal, which came to the verdict that “a person or persons were responsible for the cause of the incident, including MACC officers besides the detention,” Selangor Police Chief Datuk Noor Azam Jamaludin has in November 2019 made a statement that Teoh’s case will be reopened for further investigation; this time, with a special task force that involves the Criminal Investigation Department of Selangor, and the Bukit Aman Contingent offices. Several public witnesses have been called to make their statements, including Yeoh, following her published column in the News Straits Times on the day of Teoh’s death anniversary. Yeoh’s career path may have led her to become the Chief Operating Officer of the Institute for Democracy and Economic Affairs (IDEAS), and presently, to pursue a PhD in politics at the University of Nottingham Malaysia. She still keeps a vigilant eye on the case that was thrusted upon her more than 10 years ago – despite being a mere side researcher, rather than a full-fledged investigative journalist.

Were There Any Obstacles During Your Pursuit Of The Case?
When I worked for the state government, the obstacles were aplenty. Once, when I brought Thai forensic pathologist Dr Porntip Rojanasunan to Malaysia to assist on the case, I knew there were cars following us around. On the night after Teoh’s body was exhumed for a second post-mortem, and after having dropped Dr Porntip back to her hotel, a car continued to tail me. I was not able to return home for a long time, fearing that they would know where I lived. Till this day, I am not sure who had hired them to follow me. When I was doing research for the documentary in 2012, it was quite an emotional process, poring over the photos and case notes from three years earlier again. I remembered afresh the trauma of having worked in that same environment that eventually led Teoh to his demise. I even had several dreams about him, his family and the case during that time. Otherwise, I have always been very careful in my work, making sure that whatever I say is accurate, and does not deviate from what the official reports have already stated. I’d ensure that proper procedures are followed: when I interviewed MACC, I’d obtain the right letters, clearances and so on, making sure nobody is quoted out of context. These are the strict measures that someone operating in Malaysia must adhere to, especially in our highly politicised environment.

With It Being More Than 10 Years Since His Death, How Does That Make Someone Who Has Spent So Much Time Seeking Posthumous Justice Feel?
I must say that I am just a side researcher, and the family takes the hardest hit of all. That being said, I do feel very tired and frustrated. So many simple things could have easily been done, based on the good research of others like the Malaysian Bar. In a way, the 2014 Court of Appeal’s judgments have vindicated much of the work on the case. However, the case has not been “solved” as such, because no individual has yet been charged for any crime. I am not sure how things will unfold from here on, except to call on the current government to ensure that the investigations reopened by the police in 2019 are done thoroughly to completion, and that they should reveal their next steps to the public. If the Court of Appeal ruled that “a person or persons” were responsible for Teoh’s death, the perpetrators need to be identified, and dealt with in accordance with the law.


What Are Some Of The Hard-hitting Life Lessons You Have Taken Away From Working On This Case?
That essentially, we shouldn’t expect life – and the various elements and forces that determine life’s outcomes for us – to be fair. There are many things at work that determine a positive or negative outcome in life. Teoh’s case just puts a strong emphasis on this, where the various government and political forces came together in a very tragic and unfortunate way. At the same time, I also learned how to be savvy enough to deal with and manage very tense, sometimes opposing and multi-layered relationships with government bodies, which are not the easiest to understand. How to navigate, analyse, think about and manage relationships with complex bureaucratic institutions and political players – these have been important lessons for me, which have been very useful, not only for my work at IDEAS, but public policy research and advocacy in general.

Posted in Civil Society, Corruption, General Politics, Human Rights, Media, Transparency and Good Governance | Leave a comment