A wider asset declaration scheme

Posted on November 27, 2017 by Tricia

First appeared in theSun here, on 23 November 2017.

IT is encouraging that 30 opposition parliamentarians recently agreed to declare their assets under a programme initiated by PKR body Invoke, many declarations of which can already be downloaded by the public on their website. However, the scheme could benefit from adopting international standards for it to be considered of good value.

Asset declaration is one way voters can keep their elected officials accountable. Carried out regularly to track any major changes in assets held by high-level public figures, it prevents conflict of interest, reduces the misappropriation of funds, allows auditors to detect any form of illicit enrichment and most importantly, promotes transparency and accountability.

A World Bank survey in 2012 showed that out of 176 countries, 137 (78%) of them have financial disclosure systems, most of which make it compulsory for asset disclosure for cabinet members, MPs and high-ranking prosecutors.

Some countries in the region do practise forms of asset declaration, in the case of the Philippines it is backed by the constitution and embedded in primary law, while in Indonesia it is an executive decree.

In Malaysia, ministers and top government officials declare their assets confidentially to the prime minister annually, which are accessible to the chief commissioner of the Malaysian Anti-Corruption Commission (MACC) only. Civil servants and family members are required to declare their assets, but only to their heads of departments.

Although a ‘Code of Ethics’, approved by the Cabinet, requires MPs to declare their assets every two years, this is not a legal requirement. It is unclear to whom these MPs are required to declare their assets to, and whether it is even being practised.

Both the opposition-led Selangor and Penang state governments have made it a requirement for their Executive Council (Exco) members to declare their assets, but again this is not legally binding. All declarations have been therefore made on a voluntary basis only.

Invoke’s drive to get parliamentarians to declare their assets is a good start to encourage other elected officials to adopt principles of good governance in their political leadership. It certainly puts pressure on other opposition parliamentarians, as well as the Barisan Nasional leaders to follow suit.

Nevertheless, in order for this process to be properly followed through and be implemented well, it is important to establish certain rules and principles. It is unclear based on the current Invoke pledge to declare assets what are the detailed policy changes they would adopt. Some recommendations are as follows.

First, the requirement should be for ministers and MPs including senators to declare their assets by law. This can be done by enacting a new legislation in Parliament where they should make the declaration to a parliamentary committee that is independent from the executive.

Second, instead of having civil servants’ asset declarations verified internally by department heads, the MACC should take over the role.

Third, it is important for there to be a verification and monitoring system. The MACC can be this independent body that oversees, verifies and monitors the process. It needs to also be authorised to work with government bodies like the Inland Revenue Board and Financial Intelligence Unit of Bank Negara, in order to verify if the declarations made are accurate. Of course, this also requires that the MACC itself is completely independent of the executive.

Fourth, information on declared assets needs to be made publicly available. There is oftentimes an argument made for privacy, where exceptions can be made in certain circumstances. Assets of MPs, ministers and high-ranking civil servants ought to be made public, but information can be made available by request only for lower-level civil servants. This also requires a Freedom of Information Act in place.

Finally, the same amount of scrutiny should be imposed on state-level officials. Enactments should be in place in all states that makes asset declaration compulsory for state Exco members, state assemblymen and state civil servants annually.

However, one of the challenges would be verification and monitoring, since states would not have access to individuals’ financial information. This is why simultaneous reforms need to take place at the federal level first, in order for them to be meaningful.

Given the low levels of public trust in political leadership today, it is more imperative than ever that asset declaration is made a legal requirement at federal and state levels. Providing information to the public is the most effective form of check and balance against abuse of power for private gain. This is a good start and it is hoped that other political leaders from both sides of the divide would also independently commit to declaring their assets should they become MPs or ministers.

Posted in Civil Society, Corruption, Public Administration, Transparency and Good Governance | Leave a comment

Reducing illicit trade

Posted on November 13, 2017 by Tricia

First appeared in theSun here, on 9 November 2017.

WHILE it is positive that Malaysia is projected to be the world’s 24th most powerful economy in the world by 2050, as Prime Minister Datuk Seri Najib Abdul Razak announced two months ago, attention must also be turned to what could likely derail these efforts altogether: The grossly understudied illicit trade in the country.

The cost of illicit trade to the Malaysian economy generally is difficult to measure. But the Organisation for Economic Co-operation and Development has estimated the cost to be around US$250 billion, while the International Anti-Counterfeiting Coalition estimates the figure to be US$600 billion per annum, as of 2015. Illicit trade seems to be growing in scope and magnitude due to freer movement of goods and internet usage.

A separate study also estimated that Penang lost approximately RM16 million in uncollected taxes due to illegal economic activities in the state in a single year, based on confiscated products including cigarettes, food and beverages, motor vehicles and electrical machinery. The fact that these trading activities are taking place under the radar means that authorities are unable to capture the economic value – namely, taxes – that otherwise would contribute to the overall gross domestic product and economic growth.

It also adversely affects the film and entertainment industries. A local filmmaker once reportedly lost a projected revenue of up to RM15 million as a result of pirate DVDs, sold before the movie was even released. A separate study has shown that an increase of 15% in takings for the local box office is possible if piracy was completely stamped out.

Another significant impact of illicit trade is that it contributes to the loss of jobs in the formal sector. As it thrives, the means and networks that facilitate the movement of these goods and services tend to also build close relationships with organised crime syndicates.

A recent policy paper by IDEAS has shed new light on several sectors in Malaysia whose industries are increasingly affected by the rise of illicit trade, including music, cigarettes, alcohol, branded products as well as medicines. One of the most startling statistics is that contraband cigarettes account for 57.1% of cigarettes consumed in 2016.

Although efforts have been taken to clamp down on illegal traders, primarily by the Royal Malaysian Customs, more important questions must be asked about the overarching regulatory framework that governs the economy. Have regulations improved or reduced the efficacy of reducing illicit trade in the country?

To answer that, one must examine the factors that led to the flourishing of illicit trade. First, a critical factor, is how rigorous enforcement is by the relevant authorities. Lack of transparency and border corruption are among the most important influences of poor enforcement. It is here that Malaysia could do with improvement; the lack of transparency and efficient enforcement has earned us the fourth biggest online piracy hub in the world.

Second, cumbersome business regulations also lead to worsening illicit trade. The Global Enabling Trade Report 2014 by the World Economic Forum listed tariffs, burdensome import procedures, domestic technical requirements and standards, as well as corruption at the border, as the most problematic factors for Malaysia.

Although tariffs are a form of raising revenue for the government’s own expenditure, there must be wise policy decision-making in deciding rates. The rapid increase in illicit cigarette consumption directly corresponded to the excise increase on cigarettes, especially between 2014 and 2016. The government must be able to balance its own policy targets with other negative consequences, in this case where both black-market traders and consumers are incentivised to turn to cheaper contraband products.

The paper lists down several recommendations that could be adopted by the government in its fight against illicit trade. Although we are ranked 6th in the Illicit Trade Environment Index 2016 among countries engaged in preventing illicit trade, which means we are tackling the situation already, much more should be done.

First, the government’s taxation policies could be reviewed. Second, examining with the aim of reducing price gaps between legitimate and illicit products can be done, but the trick would be to do this in a market-driven way.

Other measures include increasing enforcement activities, using technology to authenticate products to prevent counterfeit goods and finally, and perhaps most importantly, improving the relationship between the government – whether the relevant ministries or the Customs Department – the private sector and independent professional organisations.

Having meaningful consultations through formal or informal committees is an ideal way to ensure that data is being transparently and regularly communicated to each party, in joint and collaborative efforts in combating illicit trade.

Tackling it is an equally crucial part of growing the Malaysian economy, which policy-makers ought to pay careful attention to.

Posted in Economics, Transparency and Good Governance | Leave a comment

Why the budget speech is not enough

Posted on October 27, 2017 by Tricia

First published in theSun on 26 October 2017 here.

THE prime minister presents the budget each year in Parliament with great fanfare. Although the speech – and its accompanying budget documents – does lay out a roadmap of what the country’s financial plans are for the following year, the information provided therein is simply insufficient for researchers and citizens to have a complete and accurate picture of the state of the nation’s economy.

There are several reasons why this annual presentation provides only half the story.

First, the budget tabled in October of every year is usually not the only amount of funds the government injects into the economy for the following year. The practice in Malaysia has been to table a supplementary budget of a substantial figure, bringing up the total expenditure of any given year to a greater amount.

For instance, while the originally tabled 2016 budget was RM267.2 billion, there was a supplementary budget passed in March 2017 to seek an additional allocation of RM3.08 billion for 2016. The bulk of this was for “contribution to statutory funds”, of RM2.25 billion. This tendency to overspend beyond what is originally allocated is unhealthy and reflects badly on a government that lacks the fiscal discipline to keep to its original budget.

Second, the annual budget does not shed comprehensive light on the actual amount of debt that is borne by the federal government. The government does publish some of its contingent liabilities, such as federal government-guaranteed debt for government-owned or government-linked companies like Khazanah Nasional and Prasarana Malaysia, and depositors guarantees like the Employees Provident Fund and Lembaga Tabung Haji in its Financial Statement prepared by the Accountant General’s Department. Debt guaranteed by the federal government has grown from RM69.2 billion in 2008 to RM178.06 billion in 2016 – that is a growth of 157%. The largest contributor of these is the National Higher Education Fund Corp (PTPTN).

However, this published data of government guaranteed debt is not part of the budget documents. Neither does the budget include other obligations the federal government would have, including having to step in and bail out debt holders when a privatised entity they hold debt in goes belly up. There are also off-budget agencies that are owned by government ministries whose finances are not captured in the budget. In short, one needs to look beyond the budget itself.

Additionally, implicit liabilities, which are essentially the spending promises made by the federal government that would form obligations for future expenditures, also go unreported in the budget (they are usually not included in usual debt statistics in other countries as well). For example, in the case of 1MDB, apart from explicit guarantees from bonds and loans, some of which may be captured in official documents, there were also implicit guarantees that needed to be accounted for to understand the financial implications it would have on our national coffers which are not published.

Taken together, these other contingent liabilities that are not reported in the budget – both explicit and implicit – ought to be better clarified. Although debt repayment would eventually go back to Malaysian taxpayers since most of these debt liabilities are owed to domestic and not international institutions, it is still challenging to determine a more accurate assessment of Malaysia’s financial position without a disaggregated and detailed breakdown of all debt, which the budget should rightfully contain.

A third and final reason why the budget presentation in Parliament is an insufficient source of information is simply that the prime minister’s speech has been found to contain commitments that are not followed through with in the actual financial documents themselves.

Last year, several Members of Parliament pointed out the inconsistencies between his 2017 speech and what the expenditure document contained; for example, the Serdang MP wrote that “new programmes” in the speech were actually already in existence, while the Bukit Mertajam MP found that mammogram screenings and HPV vaccinations were not budgeted for although they were within the speech text.

No doubt there will be lots of enthusiasm for goodies and tax breaks for what after all is the final budget before the upcoming general election. But if past budgets are anything to go by, it may not be an accurate reflection of the reality. Be ready to scrutinise the document line by line and expect yawning gaps in relevant information that belie the glowing promises.

Posted in Economics, Transparency and Good Governance | Leave a comment

Malaysia’s general elections, an uphill battle for the opposition

Posted on October 24, 2017 by Tricia

Commentary: Malaysia’s general elections, an uphill battle for

the opposition

(First published on Channel NewsAsia, 22 October 2017, here).

Najib Razak has yet to call the elections. Tricia Yeoh explores the challenges and likely strategies the ruling Barisan Nasional party and the opposition coalition will take.

KUALA LUMPUR: Malaysia’s general election will have to be held by August 2018 at the very latest, but can be called for any time before that.

For months now, pundits were positive the election would be set for September 2017, but now it looks like the next window of opportunity available to Prime Minister Najib Razak is between March and April 2018, after Chinese New Year in February and before fasting for Ramadhan begins in May.

If, however, he chooses to forgo this option, the next opportunity would be between the end of July and August, which would cut things a little too close for him. If any incident were to occur then that would jeopardise his reputation, he would not have the flexibility of postponing it yet again.

Recall, for instance, that there is an ongoing criminal investigation into money laundering allegations related to 1MDB being carried out by the Department of Justice in the US, apart from other similar 1MBD money laundering probes in Switzerland and Singapore.

Regardless, delaying the polls for now seems like an astute strategy as it buys Najib the time to ensure any projects and goodies being allocated from the upcoming budget trickle down to the expectant beneficiaries ranging from contracting companies to low-income communities that receive cash handouts each year.

The budget announcement slated for the end of this month is expected to be a generous pre-election budget, as has been the case previously, before the ruling government goes to the polls.

These final months are also crucial for Najib as he seeks to unite various factions in UMNO, including and especially the powerful division chiefs across the country.

POSITIVE PROSPECTS FOR NAJIB

Prospects for Najib seem positive despite his woes over 1MDB, since the issue is fast fading from Malaysians’ minds. The complexities of the 1MDB scandal are not as easily relatable compared to the everyday concerns of Malaysians, save for perhaps a select group within the urban, cosmopolitan class.

The vast majority of Malaysian voters are preoccupied with more immediate concerns like job security, home ownership, and the rising costs of living.

Although urban voters are likely to lean towards the opposition, this may not be enough to overthrow the incumbents.

In 2013, there was a groundswell of support for the opposition, resulting in the opposition winning the popular vote.

In 2018, the wave of support will not be as strong as the last two election cycles given the break-up of the original coalition, the loss of a unifying figure leading the coalition, and the public’s general disenfranchisement with politics.

Urban seats will still be important in the upcoming election, where the ruling government finds little loyalty from urban professionals. More importantly, fence-sitters may sway the election results.

However, there may be a small percentage of disaffected voters who will choose to spoil their vote or not come out at all given their dissatisfaction with the opposition’s handling of Parti Islam Se-Malaysia (PAS), its internal fighting, and willingness to cooperate with former Prime Minister Dr Mahathir Mohamed.

Some consider this last move to be an unethical compromise on the opposition’s part given how critical they had been of Mahathir’s policies when he led the country.

But the real battleground lies in rural, Malay-Muslim Malaysia.

RURAL MALAY-MUSLIM MALAYSIA THE REAL BATTLEGROUND

This may also be why the tenor of political and policy issues has become predominantly religious of late.

Over the last few months, controversies have arisen over books that supposedly take a liberal approach to Islam, beer festivals, and the detention of a popular Turkish intellectual, Mustafa Akyol, who was allegedly speaking on the commonalities between Islam and Christianity without the permission of local authorities.

More of such controversies are bound to arise given that ethno-religious politics form the frontiers of socio-political contestation in Malaysia. We can expect political parties on both sides to capitalise on racially and religiously charged incidents going forward – because to win the hearts and minds of a majority Malay-Muslim Malaysia, one must prove to best represent their interests.

Newcomers Parti Bersatu, which has now teamed up with the opposition coalition, is led by Dr Mahathir and his son Mukhriz Mahathir, alongside disgruntled former Deputy Prime Minister Muhyiddin Yasin.

The party is aiming precisely at the rural states of Johor, Kedah, Perlis and Perak. These states form the Malay-Muslim heartland and if, as the Democratic Action Party (DAP) has asserted, there is indeed a Malay tsunami this time round with a vote swing of at least 10 per cent, this may be the clincher required for the opposition to take power at the national level.

PAS THE SPOILER PARTY

Having left the opposition coalition, PAS now plays the spoiler party and is well-aware of its ability to be kingmaker. At the same time, Najib will continually attempt to entice the Islamic party PAS to remain on his side in the name of Malay-Muslim unity.

In February this year, Najib sent a food flotilla off to Myanmar in a public display of aid to the Rohingya refugees. Present at the flag-off were PAS’s deputy president and secretary-general.

PAS contesting as a third party in a first-past-the-post electoral system is far more likely to weaken the opposition coalition than UMNO in key marginal seats.

In exchange, UMNO may agree to support PAS’s Bill to amend the Syariah Courts (Criminal Jurisdiction) Act, which would enhance syariah court punishments in line with hudud laws. Put on hold temporarily, this was the first time that an opposition Member or Parliament’s Private Member’s Bill was tabled in Parliament.

PAS as a third force directly threatens the People’s Justice Party’s (PKR) performance in many Malay-majority marginal seats.

The DAP on the other hand would not be as greatly affected as its seats are mainly Chinese-majority.

This combination unfortunately plays to UMNO’s narrative of the opposition being DAP-dominated.

However, given how racially tinged Malaysian politics has become, it is hard to imagine the Chinese-dominant DAP taking a leadership position at the national level. In 2008, despite the DAP winning the largest number of state seats in Perak, the position of Chief Minister was eventually given to PAS.

In short, given that this election will be essentially centred on economic and Malay-Muslim issues, both of which UMNO has cleverly shaped to its advantage over recent years, it is unlikely that the opposition coalition will be on the winning end. The opposition won the popular vote in 2013, and still could not form the government.

An additional factor would be the degree to which opposition parties are able to make inroads into Sabah and Sarawak, traditionally known as the UMNO “vote bank”, but which have recently voiced their dissatisfaction over what they perceive to be a lack of autonomy and socio-economic rights.

Former UMNO vice-president Shafie Apdal is leading a new opposition party in Sabah, but his efforts have been thus far waylaid by a string of arrests by the party’s top leaders by the Malaysian Anti-Corruption Commission (MACC).

UMNO has continually made full use of its infrastructure and resources, government institutions, political patronage and ethnic-religious politics to ensure its survival.

This time will be no different, and it is the opposition’s uphill battle to fight.

Tricia Yeoh is chief operating officer of the Institute for Democracy and Economic Affairs.

Posted in Elections, Ethno-Religious Politics, General Politics | Leave a comment

Catalonia’s lessons on federalism

Posted on October 12, 2017 by Tricia

(First published in theSun on 11 October 2017, here).

ON Oct 1, the Spanish region of Catalonia – in which its capital Barcelona is located – held its second independence referendum in three years. The Catalan government announced that the official results showed the referendum passed overwhelmingly. But all of this took place amid heavy action by the Spanish police who attempted to seize ballot boxes and disperse voters, resulting in hundreds getting injured; the police were enforcing a court ban on the vote.

The Spanish government has good reason to fear Catalan independence. The region makes up 16% of the country’s population, and more importantly, contributes some 20% to the Spanish national economy. In 2014, Catalonia paid about US$11.8 billion more to Spain’s tax authorities than they got back, although it is difficult to calculate returns that are received in the form of health and education services.
Spain’s government has reacted quickly by adopting a new law to facilitate the relocation of companies outside Catalonia. Should there be a unilateral declaration of independence, which the Catalan government refuses to back down on, this will surely implicate Spain’s business and overall economic environment.

This is not the first time the world has seen regions threatening to secede from its parent nation. In 2014, Scotland held a similar independence referendum, in which the “no” vote eventually won, but 44.7% voted in favour of leaving the United Kingdom. Closer to home, Indonesia, Thailand and the Philippines have all experienced threats of secession based on perceived marginalisation of ethnic minorities.

In Malaysia, no states have gone so far as to agitate for any sort of referendum, but in recent years there have been calls for secession in states like Sabah and Sarawak. A similar comparison of the economic contributions Catalonia makes to Spain would be Selangor’s contributions to Malaysia – an estimated 20% of the country’s GDP is said to be contributed by Selangor, the most industrialised state in Malaysia. This is made more interesting by the fact it is being run by a political coalition that is in opposition at the federal level.

Although Spain is not technically a federation, it certainly operates very much like one, in which self-government is granted to its autonomous states. And the principle behind any federation – or decentralised government – is that unity and regional diversity can be accommodated by distributing power among central and regional governments in a manner constitutionally safeguarding the existence and authority of each.

Regions and states are bound to possess unique characteristics that are different from their counterparts, whether this is along ethnic, linguistic, religious or simply, territorial lines. The very purpose of having a federation would be to recognise these differences, and accommodate for these by allowing some degree of autonomy and self-rule.

After all, if one adheres to the idea of subsidiarity – that states and local governments are best placed to respond to issues of local concern, being closest to the problem at hand – then federal intervention is only necessary for extra-territorial issues like defence and foreign affairs. Taking Malaysia as an example, local leaders in Sarawak would be better placed to advise on the education needs of its village children compared to the federal leaders in Putrajaya, although the latter may have good intentions.

However, in granting greater autonomy to regions or states, the federal government would quite naturally feel the pinch of sacrificing some degree of control. Some even argue that centralising control is more efficient for policymaking and management of the economy. In fact, this is exactly what Britain intended when it first established the Federated Malay States, which resulted in Selangor being deprived of much of its previous independence and initiative in public affairs. State autonomy is also the main reason the Unfederated Malay States initially refused to join the federation.

But to allay these fears, it is worth noting that one of the preconditions of successful decentralisation is a high degree of central state capacity, which means the federal government need not fear that its powers are removed altogether. Coordination between different layers of government is important, so here the federal government would play an important regulatory role to ensure good governance in the decentralisation process: is there transparency, accountability and adequate representation at each level?

However, herein lies the dilemma. If autonomy has been granted, yet the state continues to demand for more, what then? One argument is that if autonomy has already been granted, the federal government cannot then proceed to suppress local autonomy in order to avoid the break-up of a state – then there would be no point in federating in the first place. On the other hand, if the autonomous states were being treated well, why would they push for independence? In the case of Spain, Catalonia was historically an independent region with its own language, laws and customs. The economic crisis exacerbated matters, leading to wealthy Catalonia seen as propping up the poorer regions.

This is why there needs to be a balance struck between the amount of autonomy given to regions or states, and their representation at the national level. While the former would satisfy the element of self-rule, the latter fulfils that of shared rule, in which the region in question would be more than adequately represented in national decision-making matters. On this note, Malaysia’s states are represented by both parliamentarians in the Dewan Rakyat and senators in the Dewan Negara. However, over the years the proportion of state-appointed representatives to centre-appointed senators has drastically reduced from 28:22 to 26:32. A robust Senate would mean states’ interests are protected whenever new legislation is debated; otherwise, they might feel a bad deal was being made centrally without concern for their regions’ interests.

These are fascinating events, which we in Malaysia – and certainly, Southeast Asia – must learn from. There is no one formula by which a federation successfully contains its multiethnic or territorial differences, since each has its own unique history, cultural values and laws. Nevertheless, it is worth investigating the circumstances under which decentralisation succeeds or fails. Federalism can coexist with and promote democracy, but only when the states in question believe that they have been fairly and adequately treated by the nation they consider themselves a part of.

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

The Malaysian Idea

Posted on September 17, 2017 by Tricia

(First published in theSun on 14 September 2017, here).

WHEN we come together to celebrate Malaysia Day on Sept 16 each year, what is it that we really celebrate?

Are we celebrating a united nation that has brought all races, regions and religions together to live in apparent harmony? Or are we celebrating the political ingenuity of the then Malayan leaders who successfully executed the idea of what essentially was greater Malaya?

Throughout our relatively short history, there has always existed the tension between administrative control from the central government and the autonomy exercised by individual states.

In fact, up to the 1940s, there was no strong nationalist sentiment towards Malaya, and Malays thought of themselves as belonging to their own states like Selangor, Pahang, Kelantan, and so on, rather than to Malaya.

It was therefore no surprise when the Kelantan state government opposed the formation of Malaysia in 1963; they even filed a case against the Government of the Federation of Malaya and Prime Minister Tunku Abdul Rahman to call for the Malaysia Act to be declared as null and void, or, alternatively that it was not binding on Kelantan. However, they lost the case as the court ruled that Parliament acted within its constitutional power.

Sabah and Sarawak were even more cautious in their agreement to form Malaysia.

The Cobbold Commission of Inquiry was set up to determine whether the people of North Borneo (Sabah today) and Sarawak supported the proposal to create the Federation of Malaysia, where only one-third of the population was reported to be strongly in favour of Malaysia.

The remaining two-thirds were either concerned with safeguards and conditions, and either wanted to achieve independence first or remain under British rule for the time being.

In short, the reaction from Sabah and Sarawak was rather mixed. The two states submitted proposals for inclusion into the Malaysia Agreement, which are known today as the 18-point and 20-point agreements respectively for Sarawak and Sabah.

While some points were incorporated eventually into the amended Federal Constitution (such as the point on the special position of indigenous races), others were not.

Another source of unhappiness was that a new constitution was not in fact drafted for Malaysia as a new country; instead, the existing Constitution of the Federation of Malaya 1957 was merely amended.

It was felt that if a new country was being born in 1963, why was there not a new constitution being introduced alongside its birth?

Suffice to say that Malaysia was formed under rather tense conditions, possibly under less hopeful circumstances than during Malaya’s independence celebrations just six years earlier.

Even the inclusion of Singapore (which, as we now know, left the Federation in 1965, two short years after Malaysia was formed) was partly due to the Tunku’s fear that the communists had a growing stronghold on Singapore – bringing it into the Malaysian fold would partly contain any insurgency that would otherwise spill over into Malaya.

The common concern felt and expressed by individual states in Peninsular Malaya, East Malaysia and even Singapore was that there would emerge excessive control from the central government, which would erode their own autonomy.

Nevertheless, this was an experiment that was considerably bold. Malaysia was – and is – certainly well-placed within the region to establish itself as an economic and trading powerhouse, flush with natural resources, and inheriting infrastructure like roads and schools that the British had left behind. It was a formula that had all the right ingredients, only if there was a wise chef behind its cooking.

As we celebrate Malaysia’s 54th year of being, one wonders about this idea of Malaysia: was it the best solution, and have there been sufficient safeguards to protect the interests of all states that formed the nation?

Tunku Abdul Rahman’s speech on Sept 16, 1963 admits that “The road to nationhood has not been an easy journey. Surprises and disappointments, tensions and crisis, have marred the way.”

That Malaysia was born in a time of uncertainty seems to be evident. But then he goes on to say that “Now finally the peoples of Malaysia are celebrating the establishment of Malaysia. This is the time to think earnestly and hopefully on the future of Malaysia as the whole country resounds with joy”.

States have always been wary of central government powers from the very beginning of Malayan history. In an age where our neighbouring countries are promoting greater decentralisation for improved governance, the federal government could consider devolving additional powers to states. To see the Malaysian idea truly flourish and not fail, this would be a wise path to take.

Posted in Federalism | Leave a comment

Ideas of Freedom

Posted on September 1, 2017 by Tricia

First published in theSun on 31 August 2017, here.

OVER the last four years, I am proud to have been part of a young, dynamic team of people working hard to produce research-based ideas and policy proposals at a local, independent think-tank. My study leave to pursue a PhD in political science coincides with the celebration of the country’s 60th anniversary of its independence, so for this column I shall share reflections of specific instances in which I felt IDEAS offered me the right platform and opportunities to contribute to the nation’s future.

One of the projects that I am most proud of was a nine-month programme that brought selected young Malaysians from all over the country together under the banner of a national unity youth fellowship. Every other weekend, we would bring them from state to state: fishing villages in Kuala Terengganu, Iban land rights activists in Sarawak, Chitty village in Malacca, Thai community in Perlis, and one of the most memorable to me – the post-flood devastation in a small Kelantanese village.

These visits were to expose our youth to the realities on the ground, and discuss challenges and issues being faced locally. We met local politicians and community leaders who gave us the inside story of the political economy and governance of each of the states. Mostly, they shared their hopes and fears about their future, which were unsurprisingly similar in nature: better economic and educational opportunities for themselves and their families.

During these intensive workshops, speakers would educate the young fellows on the economic and political shape of the nation. Discussions would take place about our constitutional history, economic policy, interethnic and interreligious challenges – a safe space that I helped facilitate to achieve rational discourse (something rare and precious these days). Today, some of these fellows have gone on to join politics, start their own movements and one was even awarded the Queen’s Young Leaders Award by Queen Elizabeth. I watch on with pride.

Second, our undying belief in the principles of liberty and justice (a quote from Tunku Abdul Rahman’s declaration of independence that we often use). We organised numerous conferences over the years, but the flagship one that always reminded me of why this work was so gravely important was our Liberalism Conference. Held annually, it was the one conference that would attempt to dispel the unfounded views that put liberalism in negative light.

Unprecedented, this was the only platform that brought together speakers from disparate perspectives on one panel: from right-wing conservative groups like ISMA (Ikatan Muslimin Malaysia) and Perkasa (Pertubuhan Pribumi Perkasa) to the more liberal IRF (Islamic Renaissance Front) and Sisters in Islam (SIS). Sure, the speakers would consistently disagree since they had different worldviews altogether, but this was the rare opportunity for the issues to be discussed openly. Only through engagement can there be any resolution on how we can live together in a common space.

The Liberalism Conference would also bring together varied perspectives on the economy: should there be more or less government intervention in managing our economy? Again, there are vastly different opinions. We explored the negative impact that poorly managed government-linked companies have on the country’s fiscal health; how opaque and non-transparent public procurement practices mean that even bumiputra companies do not benefit s long as they are not well-connected; how excessive government regulation makes it tough for companies, both small and large, to operate in the country.

How about the political future of the country? Bringing together political leaders from both sides of the divide was this conference’s forte. What is the right model that works to secure the future of Malaysia? The Barisan Nasional consociational model that was meant to allow different ethnic groups a political party to air their grouses, or the Pakatan Harapan model where each party is at least in theory multiracial? More importantly, what public policies should be implemented to ensure the long-term wealth to allow all communities to prosper and flourish, living the lives they desire?

These are all questions that have been explored deeply throughout my years here, and it is this enabling of such intellectual debate that I believe has added value.

The Malaysia of today has the burden of dealing with multiple faultlines, and it is these we must carefully navigate. At a time when these faultlines – race, religion, geographical distance, urban-rural divide, language – seem to be rearing their ugly heads more often than we like, it is ever more important for there to be avenues for us to understand “the other”.

Finally, the working together with other members of civil society was a valuable experience. Through a coalition of governance, integrity, accountability and transparency (GIAT), we launched several campaigns to promote good governance in the public sector. One of the most prominent ones was to establish an even more independent Malaysian Anti-Corruption Commission and the separation of powers between the attorney-general and the public prosecutor, both roles of which are fused into one person today.

Separately, a “Good Governance Agenda” that political parties can sign up to included the need for open data practices, transparent budgets, the review of the Official Secrets Act, Whistleblower Protection Act and the tabling of legislation to allow for transparent political financing, and freedom of information. It is these governance frameworks that can help existing systems to mitigate the effects of any possible human failure.

It is always a challenge to measure the public policy impact that a think-tank makes, especially one that is independent of government. However, four years on, there were certainly key occasions during which some role was played in contributing to Malaysia, now and beyond: educating young Malaysians; expanding the space for discussions on liberty, justice, governance and economic development; painting a vision of the future we want.

While we celebrate 60 years of independence, it is all too easy to romanticise the past and imagine what it was like in those early years, brimming with hope. We have accomplished a lot, let us not deny this.

But let us keep moving to greater heights. And to do this, we will need more such platforms that I believe IDEAS has been able to provide Malaysians, by bringing together people from all walks of life to face the realities of present-day crises, and ultimately seek practical public policy solutions that will best provide us the freedom we seek. Selamat Hari Merdeka ke-60.

Posted in Liberalism, Personal, Reflections, Transparency and Good Governance | Leave a comment

An Open Letter to Dato’ Seri Najib Razak

Posted on August 10, 2017 by Tricia

First published on the IDEAS website on 4 August 2017 here.

Dear Sir,

Last week you gave an outstanding speech to international investors at the Invest Malaysia 2017 conference. I am sure many were impressed with the economic achievements that have been accomplished to date under your leadership. However, I do believe that some of the facts that you quoted would require some further elaboration. Please allow me to do so, especially since one would not want to provide misleading information to foreigners who may not know any better about this beloved country of ours.

You started your speech saying that you introduced the New Economic Model (NEM) seven years ago at the very same conference, with a plan that has worked and is continuing to work. Perhaps I may remind you that one of the key approaches of the NEM’s economic development plan was to move away from “dominant state participation in the economy” towards “private sector-led growth”. An IDEAS policy paper published last year examined GLC disposal and investment exercises from 2011 to 2014 (after the NEM was published, by the way) and found that the total acquisition value of RM51.7 billion dwarfs the total disposal value of RM29.5 billion – in simple language, GLICs and GLCs combined have acquired far more than they have sold.

Second, you quoted a Bloomberg article which stated that the ringgit is “easily the strongest major Asian currency this quarter”. What you failed to note was that this is considered a remarkable improvement only because the ringgit had recently rebounded from a 19-year low. Anyone who has children studying overseas would know that as recently as January this year, the ringgit had lost about 22% since the start of 2015 and was at that point the worst-performing currency in emerging Asia. In fact, an analyst in the very same article you quote from seems to imply that the recent growth momentum is strongly related to the impending election, and asks “but what happens after it?”

Third, you said that your government is one that is committed to transparency, accountability and good regulation. I, for one, am particularly pleased that you place public importance on the need for these values in your administration. Having integrity and governance units at all GLCs – at both federal and state levels – should certainly be applauded. However, these units are monitored by the Malaysian Anti-Corruption Commission, which reports to the Prime Minister’s Department. It is difficult to see how any conflict of interest involving your administration could be avoided if the integrity and governance officers were to uncover a certain wrongdoing within their GLCs placements.

Fourth, you referred to international bodies such as the OECD, IMF and World Bank, all of whom apparently heaped praises onto Malaysia’s glowing economic performance. While the summaries of these reports may have been relatively positive, for which one can certainly be proud of, you failed to mention numerous other instances which are basically big, red flags. These warning signs are indicators that not all is perfect. I say this not with the intention of disparaging my own country – far be it that I would discourage investors from coming in to provide valuable capital for future long-term growth – but to be frank about what it will really take to move our economy forward. Unless we face the honest truth squarely in its face, we will never institute meaningful reforms and merely chug along.

On this note, you quoted IMF as saying that Malaysia is amongst the fastest growing economies among peers. The very same report also highlights that our country’s “federal debt and contingent liabilities are relatively high, limiting policy space to respond to shocks”. Second, it also says that our “household debt remains high, with debt servicing capacity growing only moderately”. These are only two points that I am lifting from the report – if one looks closer, there are serious challenges that may implode over time if left uncorrected.

Similarly, you quoted the World Bank report that states our economy is progressing from a position of strength, but failed to mention that the same report says that risks in the economy “arise from growing threats of protectionism” and that there is a need to “accelerate structural reforms in the economy”. I would advise you to personally read these documents from cover to cover to really understand the conditions of the economy today. In short, there is a need to examine the details and not just gloss over the summaries of these reports, advice I would provide to any investor looking into Malaysia.

Fifth, you deftly talked about how your administration is cracking down on “crony capitalism”, “sweetheart deals” and that there would be no more “national follies kept going to stroke the ego of one man”. I especially like this one, where you say “No more treating national companies as though they were personal property” – brilliant. Let us hope then that the national agencies such as the Attorney General’s Chambers will lend its co-operation to any and all investigations including those from international bodies to assure us that 1MDB will not fall into such a category.

Sixth, you hailed SMEs as the “hallmarks” of your administration as they are the backbone of the economy. You also said that government policies are therefore meant to be business-friendly and pro small and medium enterprises (SMEs). However, the Price Control and Anti-Profiteering Act (PCAPA) is one such policy that is adversely affecting SMEs. The mechanism poses price ceilings on food and household goods sold at mamak and even small sundry shops. The mechanism to calculate the “right” price is so complicated that some shops have just shut down altogether because they could not afford to pay the fine. There are numerous other examples of regulations that are in fact making it very difficult for the business community to operate, which have been raised regularly at public forums but seemingly in vain.

Finally, Sir, with all due respect, your speech was peppered with many political references, many of which were obviously targeted at a specific individual. I am sure you made your point loud and clear. However, with all due respect, this may have been better said at a platform hosted by your political party – or perhaps out on the road when speaking to your electorate. To have these words uttered at a formal international investment conference may have been considered out of place. Perhaps your speech at the next Invest Malaysia conference could be more carefully worded – for the sake of future investment into this country we both call home.

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

The next govt’s reform agenda

Posted on July 21, 2017 by Tricia

First published in theSun on 20 July 2017, here.

SUDDENLY it is election season again, with political parties optimising on the month-long Raya celebrations to test the waters of which leaders attend whose open houses. Of course, the most significant development of the month has been Pakatan Harapan’s unveiling of its logo – finally – and subsequent events at which its leaders have shown a common front to what seems to be enthralled crowds of all races.

It is indeed positive that Malaysia’s competitive politics continues to display its vibrancy in its many shades. Whether this is sustainable or not is another matter, since the 14th general election does not need to be held until August 2018 at the very latest. The electorate may tire, even if the politicians do not.

But it is important that voters are steadfast in their demands and expectations of political leaders. And there are many, many areas that will require reform – an uphill task for the next government administration.
Some of the main issues that will require immediate attention within the first 100 days of the next government – new or incumbent – are as follows.

First, the government will need to examine its priorities on economics and business. At a recent IDEAS event, the business community stated explicitly that it is because the government coffers are running dry that they are getting squeezed.

New taxes and policies are being introduced with no consultation, with the expectation that they should be implemented immediately. Several examples like the withholding tax (where companies must pay a tax on services rendered by foreign consultants even if the persons in question did not set foot on Malaysian ground) and foreign exchange controls (where Malaysian exporters are required to convert at least 75% of their export earnings into ringgit) were cited as causing them to lose competitiveness. Many feel that these decisions are being made with very little reasonable basis. Perhaps more worryingly, they share the perception that politics dictates policy.

The government certainly has an important role to play when it comes to raising taxes for public benefit and fiscal sustainability. However, to do so at the cost of the business sector – both small to medium and large multinationals are facing these challenges – will be foolish. It is possible to increase government revenues but it must be evidence-based policy-making. Increasing the pressure on businesses might instead have reverse effects.

Another important area is for the government to decide once and for all whether it wants to remain active within the economy or not. In the New Economic Model, the prime minister announced the desire to divest its shares within the private sector. However, the government continues to occupy a large share of the economy.

Government-linked companies employ about 5% of the national workforce while controlling about 36% and 54% of the domestic equity market and market capitalisation of the Kuala Lumpur Composite Index respectively. The bigger the government share is of the economy, the less likely it is that the private sector can compete and be the so-called “engine of growth” that the government continues to say it is.

Second, the next government needs to seriously focus on good governance reforms for institutional independence and creating an environment in which its citizens can truly be free to express themselves and take part in a more democratic process of policy-making. In a recent GIAT (coalition on governance, integrity, accountability and transparency) event in which a Good Governance Agenda was launched, civil society organisations called on political parties to take this up ahead of the next general election.

Five key areas were laid out, namely that parties should reform key institutions such as the Malaysian Anti-Corruption Commission (MACC) to make it more independent, reporting to Parliament instead of to the prime minister; as well as to reform the Attorney-General’s Chambers to ensure the separation between the role of the public prosecutor and that of the attorney-general where at present the two roles are fused into one person which presents obvious conflict of interest.

There should be a national-level freedom of information (FOI) law, similar to the existing FOI enactments that the two state governments of Selangor and Penang have. On that note, the Official Secrets Act 1972 would need to be reviewed and certainly amended to ensure that information on corruption can be declassified.

Principles of open data should also be adhered to, especially the Department of Statistics, Economic Planning Unit and in fact, all government agencies and ministries that deal with data.

This means that all information put out on websites should be accessible in raw format and usable by anyone who downloads them, especially for the purposes of improved governance, citizen engagement and inclusive development.

Other areas of governance reforms that are sorely needed include the practice of budget and expenditure transparency – to be done at all levels of government including local council. Public participation should also be included where citizens’ feedback is consulted and considered.

Finally, all political parties ought to publicly declare all forms of income and expenditure. All elected representatives at all levels of government, as well as senior public officials, should also declare their assets, as practised by law in many countries.

There are numerous challenges ahead of the new government. As the country enters the final phase before we arrive at 2020, Malaysians will inevitably ask ourselves whether we are any closer to achieving the elusive developed nation status that we so long aspired towards.

However, perhaps the most difficult to battle will be the need for the government to reform the way we treat each other. At a time when ethnic and religious tensions are on the rise, the true test is whether the leadership endorses or puts to shame organisations that harm inter-ethnic harmony. As long as there remain policies that discriminate on the basis of race, the vision of a united Malaysia will remain beyond reach.

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

The untold story of the Teoh Beng Hock case – Final Part

Posted on July 19, 2017 by Tricia

First published on The Malaysian Insight here, on Tuesday 18 July 2017.

THE taxi feels like it is about to fall apart, as Beng Hock’s father takes me for a spin around the neighbourhood in the car that has been his livelihood for most of his life. It is creaky and shabby, as haggard as he and his wife have become in recent years, under the weight of their son’s death.

Inside the home, plain wooden furniture and an ironing board line the hallway. Old photographs of Beng Hock on the wall show him keen and earnest, a young man waiting to take on the world.

I interview the parents Teoh Leong Hwee and Teng Shuw Hoi in 2012, three years after the incident. I spend countless hours going through every report again, trying to pick out inconsistencies the way the lawyers did before. I am haunted by dreams at night – scenes from the funeral displayed on a large screen, a melancholic tune playing in the background.

You feel powerless when you have all of the state’s institutions operating against you.

On January 2, 2010, the MACC lodged a police report against Dr Porntip for allegedly leaking the post mortem report to unauthorised persons. This was following an interview she had given to Suara Keadilan, although the article actually cites sources from within the Ministry of Health.

This was obviously an attempt to further intimidate her and interfere with the due administration of justice, as she was to come one final time to give her testimony at the inquest following the second autopsy.

And it worked: Dr Porntip was reluctant to come to Malaysia. She was upset that she had helped willingly but instead had a report lodged against her. More importantly, she feared getting arrested upon landing on Malaysian soil. I wrote to her many times to persuade her to change her mind. The entire exercise of the second autopsy would come to naught if she did not submit the final report. It would be a walkover.

It was only when the Malaysian Attorney-General cleared Dr Porntip of any wrongdoing that she changed her mind.

But another obstacle came up. The Thai Ministry of Justice would not give her the permission to come. Dr Porntip was actively doing forensic work in the south of Thailand, which included transit to the border of Malaysia. Certain government officials from Malaysia had placed political pressure on the Thai government to block her from entering these areas. Suddenly this became a transboundary issue between two nations, a delicate situation I would be partially responsible for treading on.

We had hit a dead end. For four months, we had tried to negotiate with Dr Porntip but to no avail.

To our surprise, the Malaysian government suddenly became friendly – Home Minister Hishammuddin Hussein even offered police protection for her safety. We tried another tactic: how about a video conference where Dr Porntip could be projected over the screen? Possible, but the court kept postponing the dates and there was no further word.

Finally, in July 2010, I received an email from Praew saying the Thai Ministry of Justice had a change of heart, and gave Dr Porntip the approval to attend the inquest in person. My heart leapt for joy – we were reaching the end and there would finally be some answers.

Since the government had offered police protection, we weighed the matter and decided it would be best to take them up on this offer. It was a double-edged sword – there would be protection but equally we could not tell to what extent the police would be cooperative with the state government, given they report back to Putrajaya.

I summoned my courage to meet with the police at the Selangor police headquarters in Shah Alam. The man in charge was large and gruff, grunting his way through the meeting – luckily, I had the foresight of bringing a male colleague with me because this top cop obviously had better things to do than acknowledge my presence. In any case, he agreed. Three policemen would accompany me throughout Dr Porntip’s visit: a special branch officer and two others from the criminal investigation division.

Organising this final visit was like conducting a live performance with multiple stage actors; lawyers, forensic pathology team from Thailand, the national police, our private bodyguard, backup security car from the state government, the Teoh family, and the politicians.

On August 18, 2010, Dr Porntip attended the inquest and gave her final testimony before the judge; that Beng Hock had bruises on the neck, where blood from these contusions extended deep into the muscle beneath the skin. This injury, she said, could have been caused by a blunt object prior to the fall. She said this based on her experience of examining more than 70 cases of a fall from height by suicide, none of which had injuries on their necks.

There were numerous other inconsistencies that were raised during the inquest, which this article was not meant to delve into. But recall that this was the main point of contention: if he had been struck unconscious before he fell, then there was no way it could have been suicide. If he was unconscious as a result of his injuries, then perhaps he was assisted out of that window in an unconscious state. There are some things I cannot say bluntly. But the implication here is clear.

Everything else that happened after that was a blur for me. The police became good buddies of ours and they all wanted photographs with Dr Porntip as we bid the Thai team farewell at KLIA. I remember being overcome by immense relief. For more than a year I had pushed as hard as I could to get a second expert opinion. And at least this, I thought, would turn the tide.

When the coroner, Azmil Muntapha Abas, delivered an open verdict in the inquest on January 5, 2011, I was devastated. I felt emotionally spent – all those months of trying, pushing the boulder up the hill, all gone in an instant.

It was not long after that that I decided to leave the Selangor MB’s office. At that time, I did not know the events were connected but looking back, handling this case might have taken more of a toll on me than I knew.

That was the last of the duties that I performed on behalf of the state government with regards to the case. What followed next is well recorded.

The government-formed Royal Commission of Inquiry conducted hearings for six months before concluding on July 21, 2011 that Beng Hock was driven to suicide due to the aggressive interrogation methods deployed by MACC officers, which caused public uproar.

The state government and Beng Hock’s family had both long withdrawn from the RCI citing inconsistencies in the manner of conducting the RCI (the RCI had independently requested for Dr Porntip to give her testimony, which she did).

But what gave a glimmer of hope was the Court of Appeal’s unanimous ruling on 5 September 2014 that Beng Hock’s death was caused by an unlawful act by a person or persons unknown, including MACC officers who were involved in his arrest and investigation. It ruled that this was a custodial death while under MACC detention. This ruling was a vindication for the entire team that had worked tirelessly on behalf of the family and state government. It was a bittersweet moment.

The ruling also instructed the police to reopen the investigation. But on May 19, 2015, Minister in the Prime Minister’s Department Nancy Shukri said in parliament that the Attorney General found no criminal element involved in the death of Beng Hock after examining the report of the police’s special taskforce.

It was a death that catalysed the MACC to professionalise itself by introducing new standard operating procedures for its interrogations and investigations. And all this should certainly be commended, so that a senseless death like this never again takes place.

However, Hishamuddin Hashim, the person who led the interrogation of Teoh Beng Hock back in 2009, is today the Director of the Special Operations Division at the MACC. I have come to respect many officers of the MACC as most are simply doing their jobs. But I cannot and will not dismiss the wrongdoing of the one or ones responsible for the death of Teoh Beng Hock. Eight years on, we are no closer to finding the truth of what may remain an unsolved case. – July 18, 2017.

* Tricia Yeoh was Research Officer to the Selangor Menteri Besar from January 2009 to March 2011 and represented the Selangor state government in managing the Teoh Beng Hock case.

Posted in Corruption, Personal, Selangor, The Cause | 2 Comments