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Corruption in Malaysia

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Fighting Corruption in Malaysia SPA 501 FIGHTING CORRUPTION IN MALAYSIA A government, for protecting business only, is but a carcass, and soon falls by its own corruption and decay ~ Amos Bronson Alcott Corruption had always been a thorny issue for any government in the world. To a certain extent, the rate of corruption is considered as an indicator of how clean a particular country is. The level of corruption, or more accurately, the perceived level of corruption of a certain country is considered a deciding factor in determining a country’s good standing, as well as it’s earning, which is translated into the GDP and FDI figures.

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In short, corruption undermines good governance, distorts public policy, leads to misallocation of resources and hurts economic growth. (Bardhan 2003; Rose-Ackerman 2004) Before progressing further into the discussion of fighting corruption in Malaysia, it would be prudent to attempt to give a brief definition of what corruption really is. Various definitions had been given by numerous scholars on the concept of corruption.

Deciding on a particular definition while rejecting the rest is not the intent of this paper.

However, upon scrutinizing several concepts, it can be said that most, if not all definition of corruption agrees on 3 main ideas, namely; 1) It is an abuse of power, perpetrated by a person(s) in power 2) It is done for personal gain, in monetary or other forms 3) The effect would prove detrimental to the organization, or in a broader sense, to the country. Scholars who are writing about corruption in governments usually add a fourth criterion; “the abuse of public office, for private gain” (World P a g e |1 Fighting Corruption in Malaysia SPA 501 Bank, 1997a: 12).

A unifying and somewhat concise definition is perhaps given by United Nation Development Programme, UNDP; “the misuse of public power, office or authority, for private benefit through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement (UNDP 1999:7). This paper would focus on the level of corruption in Malaysia, using the definition by UNDP as a basic guideline. As it is very difficult, if not impossible, to measure actual corruption accurately (Quah,1999), several indicators would be used to gauge the level of corruption in the country.

This paper would make use of reported cases and tried cases as published by the MACC (Malaysian Anti-Corruption Commission), as well as the index and ranking of Malaysia based on the CPI (Corruption Perception Index) and GCB (Global Corruption Barometer) published by Transparency International. These data would be representative of the trend of corruption level in Malaysia, by comparing data from the domestic as well as the international agencies. The first part of the paper, which focuses on the perceived corruption level in Malaysia, would also study the nature of corruption.

As noted by Caiden (1981), corruption in a nation falls under two categories; whether corruption is a fact of life, or a way of life. The difference of the two would determine how rampant corruption is in the country. The type of corruption, whether grand of petty, would also be discussed, as they contribute to the total corruption perception of the country. Grand corruption refers to corrupt practices by political masters and senior civil servants, usually resulting in large international bribes and P a g e |2 Fighting Corruption in Malaysia SPA 501 hidden overseas, offshore accounts.

Petty corruption is practiced by junior civil servants who demand bribes to perform favours (Pope, 2000). The second part of the paper would focus on the initiatives taken by the government to combat corruption. Leslie Palmier (1985) had outlined three important root causes of corruption in public offices, which are opportunities, salaries and policing. The initiatives and strategy taken by the government would be studied according to these root causes, while the measure of effectiveness of the initiatives would also be studied against these root causes.

An initiative is considered successful if it is able to minimize, if not eliminate, at least one of the root causes. An effective anti-corruption strategy would also be able to curb both grand and petty corruption simultaneously (Quah, 2003). Thus a successful and effective initiative would not only be able to eradicate the root cause(s), but also deals with both grand and petty corruption simultaneously. The success in combating corruption is determined by two factors: 1) the adequacy of the measures in terms of the comprehensiveness of their scope and power (i. e. t fulfills the requirement of eliminating the root caused put forth by Palmier, and there are evidence that the corruption level is improving); and 2) the level of commitment of political leaders to the goal of minimizing corruption (Quah, 1999). The findings in Part 1 would serve as a platform in determining the success of the initiatives taken by the government. The third part of the paper would focus on the steps that could be taken to improve corruption level in Malaysia. This does not necessarily mean new initiatives or programs; it could be the same programs being conducted in a different manner.

There could also be programs or initiatives P a g e |3 Fighting Corruption in Malaysia SPA 501 taken other countries, which could in fact be implemented in Malaysia. In order to determine the steps for improvement, it is necessary to first study why the initiatives failed in the first place. By understanding the root causes of the failures and eliminating them, Malaysia’s standing would see an improvement. Part 1 : Corruption, where are we ? The duty of youth is to challenge corruption. ~Kurt Cobain Corruption level is relative; an index or a statistic given at one point in time is basically meaningless, as there is no basis for comparison.

To study the corruption level in Malaysia, it would be make more sense to study the level over a period of time. This would give an overview of how successful (or unsuccessful) we are in fighting corruption, and also give us an idea on where the country is heading. Two data would be used to gauge the corruption level in Malaysia, the statistical data provided by MACC, as well as the ranking provided by Transparency International. Prior to January 2009, the MACC was known as the Anti-Corruption Agency (ACA) Malaysia.

It was an agency under the Prime Minister’s Department. Being a dependent agency had proven to be inadequate; there were severe limitations on the power of the agency. Thus, after years of public appeal (some considered the 2008 General Election to be a major jolt), the government had formally set up MACC, Malaysian Anti-Corruption Commission, giving the agency the independence it required to perform its function. P a g e |4 Fighting Corruption in Malaysia SPA 501 Over the years, MACC had received thousands of reports and complaints from all over the country.

These reports are vetted through to determine whether there are enough prima facie evidences that would warrant an investigative paper to be opened. If the investigation shows enough proof, an arrest would be made, which would then be forwarded to the Attorney General’s Office for prosecution. Table 1 shows the total complaints received by MACC since 2004. It is interesting to note that there is a sharp decrease of total complaints received as of 2009; which coincides with the formation of MACC to replace ACA. It is also interesting to note that 2009 saw a new Chief Commissioner of MACC, not to mention a new Prime Minister of Malaysia.

These changes might explain the sharp decrease in the number of reports received by the agencies; either the new initiatives taken by the government (NKRA, for example) had managed to reduce complaints overnight, or the public is simply waiting to observe the success of these and other initiatives, before making an effort of putting a complaint to the agency. Total Complaints and Report Received Year 2004 2005 2006 2007 2008 2009 2010 Investigation 5,512 6,156 5,776 6,562 8,840 939 1,220 Action Apart from Investigation 5,901 5,136 5,285 5,845 9,221 4,997 4,426 Total 11,413 11,292 11,061 12,407 18,061 5,936 5,646

Source : MACC’s Annual Report Table 1 : Number of complaints and reports lodged with MACC (formerly ACA) Chart 1 shows the correlation between the numbers of reports received by the agencies over the years, compared against the percentage of arrest made. Again, 2009 proves to be an interesting year, since it marked a P a g e |5 Fighting Corruption in Malaysia SPA 501 sharp decrease in the number of investigation performed, at the same time showing a strong increase in percentage of arrest. 10,000 8,000 6,000 4,000 2,000 0 2004 2005 2006 2007 2008 2009 2010 Total Report Which is Investigated 90. 0% 80. 00% 70. 00% 60. 00% 50. 00% 40. 00% 30. 00% 20. 00% 10. 00% 0. 00% Percentage of Arrest Against Investigation Chart 1 : Correlation between report investigated and percentage of arrest by MACC On the surface of it, an increase in total arrest made relative to the number of investigation performed would indicate the agency is finally bucking up; i. e. they are now more prepared than ever to pursue offenders which had been reported. However, arrest does not necessarily mean prosecution, an act which MACC has little to no jurisdiction.

In fact, the trend of prosecution rarely follows the trend of arrests made by MACC, as shown in Chart 2. Thus, the success, or apparent success, of MACC in curbing corruption has to be validated by some other external data. 1,000 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 38. 00% 36. 00% 34. 00% 32. 00% 30. 00% 48. 00% 46. 00% 44. 00% 42. 00% 40. 00% Total of Arrest Made Percentage of Prosecution Made Against Number of Arrest Chart 2 : Correlation between total arrest made, and percentage of prosecution P a g e |6

Fighting Corruption in Malaysia SPA 501 If the data from MACC are to be used to gauge the corruption level in Malaysia, one would find the figures baffling; the number of reports made indicates declining corruption practices, while the arrest number indicates increasing number of cases. The prosecution figures, on the other hand, indicates a trend that seems impervious to the controlling factors (at least those within MACC). It would seem, then, a more accurate assessment of the corruption level in Malaysia would need to be collaborated by another independent source.

The Corruption Perception Index measures the perception of corruption, rather than actual corruption, of a nation. Some experts argue that the figures are misleading, since the measurement is based on perceptions, through expert assessment and opinion surveys, rather than actual corruption levels. However, counter argument could be made for the exact same reason; since actual corruption levels are very difficult to measure, the perceived corruption should serve as a good indicator.

Furthermore, since perception would ultimately influence decision (most notable the decision to invest), the results published by Transparency International cannot be ignored. Malaysia had been ranked by the Transparency International as early as 1995, where the country obtained a Corruption Perception Index (CPI) score of 5. 28, and ranked 23rd, out of 41 countries ranked. Datuk Seri (now Tun) Dr. Mahathir Mohamed, when asked to venture an opinion regarding the ranked, replied (somewhat angrily), “This is another western ploy to discredit our achievements. ” (Tunku Abdul Aziz, 2005).

Ironically, that was among the highest score attained by Malaysia; since 1999, Malaysia had failed to exceed this score. P a g e |7 Fighting Corruption in Malaysia SPA 501 Table 2 shows the ranking and score attained by Malaysia from 2000 to 2010, while Chart 3 shows the graphical representation of the same data. 2000 Rank 36 Score 4. 8 2001 Rank 36 Score 5. 0 2002 Rank 33 Score 4. 9 2003 Rank 37 Score 5. 2 2004 Rank 39 Score 5. 0 2005 Rank 39 Score 5. 1 2006 Rank 44 Score 5. 0 2007 Rank 43 Score 5. 1 2008 Rank 47 Score 5. 1 2009 Rank 56 Score 4. 5 2010 Rank 56 Score 4. 4 011 Rank 60 Score 4. 3 Table 2 : Malaysia’s Score and Rank, based on CPI published by Transparency International 30 5. 2 35 5. 0 40 4. 8 45 4. 6 50 4. 4 55 4. 2 60 4. 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Chart 3 : Graphical Representation of Malaysia’s ranking based on CPI Score Rank From the year 2000 to 2005, Malaysia had managed to maintain a position within the top 40 countries, somewhat fluctuating towards the lower end. However, from 2006 onwards, there has been a steady decline in the country’s ranking, the worst in 2011 when Malaysia was ranked 60.

Some argue that the reason for the falling ranking is because the number of countries ranked had increased; the total number of countries ranked in 2011 is 180, far more than 41 countries when Malaysia was first ranked in 1995. P a g e |8 Fighting Corruption in Malaysia SPA 501 Disallowing for the argument, it still does not account for the sharp decline of the index score attained by Malaysia. As shown in the graph, prior to 2008, the country’s score fluctuates between 4. 8 to 5. 2. However, from 2008 onwards, Malaysia has been on a downward spiral ever since, reaching an all-time low of 4. in 2011. Based on the CPI score and ranking then, Malaysia had been getting worse in terms of corruption. It might not be fair to judge the corruption level in Malaysia based on CPI alone; it is, after all, an index calculated from the perceptions of expert and the business community, mainly foreigners, on Malaysia’s level. Transparency International had released other indicators, namely the Global Corruption Barometer (GCB), which is a perception tool evaluated by the citizens of the country themselves. A study of these indices would give a better view on the corruption level prevalent in Malaysia.

The latest GCB report published by Transparency International provides several interesting findings. The survey, which was conducted among the locals of a country, aims to gauge the perception of corruption spread across a region. A summary of findings of the 2010 GCB is tabulated in Table 3. Year 2010 2009 2007 2006 Effective 48% 28% 53% 44% Neither 32% 6% 10% 11% Ineffective 20% 67% 37% 45% Source : Transparency International Global Corruption Barometer Report Table 3 : Assessment of effectiveness of government’s initiatives, survey by citizens

Table 3 shows that aside from 2009, roughly 50% of the people feels that the government’s initiatives are effective initiatives. The reduction shown in 2009 would seem to coincide with the decrease of numbers of P a g e |9 Fighting Corruption in Malaysia SPA 501 complaints released by the agency; since most of the people do not feel the government is effective in fighting corruption, it follows that the number of complaints lodged would also decrease. 2004 M G 2005 M G 2006 M G M 2008 G M 2009 G M 2010 G 3 10 6 9 3 9 6 13 9 13 9 25 M = Malaysia, G = Global; Source : Transparency International Global Corruption Barometer Report.

Table 4 : Percentage of Respondents who had experienced paying bribe In terms of citizen’s who had experienced paying bribes, Malaysia had consistently remained below the global average. This would suggest that the high perceived corruption of the country shifts more towards grand corruption as compared to petty corruption, although it should be noted that Malaysia’s levels of respondents with experienced paying bribe is increasing. Comparing the data provided by MACC, as well as the data obtained from Transparency International (both CPI and GCB), we began to see a pattern emerging from it. These data would suggest that though nternational community views the corruption level in the country to be increasing, the citizens of the country generally considers the initiatives taken by the government to combat corruption is effective. Whether this perception would hold true for the next year still remains to be seen. The data would also suggest the corruption in Malaysia still remains a fact of life, rather than a way of life (Caiden, 1981). This should give Malaysians a brief sense of respite, knowing that corruption is not yet as rampant as in some countries, although bearing in mind that if preventive measures are not taken quickly, it might well be.

P a g e |10 Fighting Corruption in Malaysia SPA 501 Having obtained a brief overview on the corruption level in the country, we now move to the second part, which studies the initiatives taken by the government as part of its battle against corruption. Part Two : What has been done ? All institutions are prone to corruption and to the vices of their members. – Morris West A government which neglects to portray a facade of active corruption fighting would run the risk of foreign investment pulling out, since most countries consider it an indicator of the government’s stance towards corruption.

Malaysia is no different; over the years, there had been numerous initiatives and programs developed to fight corruption in the country. In studying the various steps taken by the government, it would be useful to study the initiatives according to the root causes outline by Palmier (1985), which are opportunities, salaries and policing. It would be prudent to point out the difference between a country which is actively fighting corruption against a country which only pretends to do so; a country which pretends to do so would lack the political will to carry the initiatives through.

Sooner or later, this lack of political will would be apparent, which could be indicated by the domestic or foreign stakeholders. The key agency in combating corruption in the country is MACC. MACC was first formed in 1967 as an agency under the Prime Minister’s Department. Due to its multiple needs increasing functionality, the agency was upgraded to a commission’s status; giving it the required independence and clout to combat corruption more effectively. P a g e |11

Fighting Corruption in Malaysia SPA 501 The setting up of an independent anti-corruption agency is further supported by the development of multiple policies and committees, such as NKRA (National Key Result Area), PIN (National Integrity Plan), JPKA (Committee for Finance and Accounts Management), the setting up of BPA (Public Complaints Bureau), PEMANDU (Performance, Management and Delivery Unit), Integrity Institute, as well as the Internal Audit team for all agencies. These initiatives, in turn, put forth several plans of actions which had been implemented in various levels of the government.

Support letters from political masters had long been an issue among the people in Malaysia. It came to a point when support letters were seen as a must in various appeals and application for government related activities such as procurement, human resource management, loans, scholarships and citizenship. That effect is compounded by both the political masters and the civil servants; on one hand, politicians feel they are duty bound to provide support letters to their constituents, lest they might not gain enough support during elections.

On the other hand, civil servants feels that support letter from political masters are tantamount to instruction, which, if not heeded, would bear negative repercussions on the civil servants. Prior to 2010, this issue had barely been acknowledged, much less addressed by the public. The acceptable norm in the country is that the civil service, in general, would only function when support letters are attached. This corrupt practice had finally been addressed by the Chief Secretary to the Government, Tan Sri Sidek Hassan, when he issued a guideline in processing applications with support letters attached. (Sidek, 2010).

Although far from a perfect solution, it is viewed as a step in the right direction. P a g e |12 Fighting Corruption in Malaysia SPA 501 In addressing the multitude of issues plaguing the government procurement process, Ministry of Finance had set up several initiatives to reduce these risks. Among them is the setting up of the MyProcurement portal (http://myprocurement. treasury. gov. my/), which discloses the details of government procurements. Information such as names of successful contractors/bidders, contract sums and project periods are disclosed on the site, as well as other procurement related information.

In terms of increasing the capacity of good financial management, the Auditor-General had introduced a Procurement Accountability Index. All the ministries would be assigned a score, which would also reflect the Accountability Index Audit performed by the Auditor-General. With the introduction of this Index, it would be easier to rank various ministries and agencies in term of their compliance towards the standing financials acts and instructions. Transparency International (Malaysian Chapter) had for so long championed the use of Integrity Pact for all procurements etween government agencies and its suppliers. The pact, in short, is simply a formal contract between two parties, which underlines the following features : • • A no-bribery commitment signed by the bidder’s Chief Executive Officer; A corresponding commitment of government to prevent extortion and the acceptance of bribes by its officials; • • Sanctions against bidders who violate their no-bribery commitment; and An involvement of Civil Society in monitoring the bid evaluation, the award decision process and the implementation of the contract. (Tunku Abdul Aziz, 2005)

P a g e |13 Fighting Corruption in Malaysia SPA 501 Although it took some time for the idea to catch on, (State of Terengganu under PAS’s rule in the year 2000 was the first state to adopt the practice), by the year 2010, all government agencies, state and federal, had adopted the use of Integrity Pact in all procurement exercise (Wan Abdul Aziz, 2010). On the other end of the spectrum (some scholars termed it as the ‘supply side’ of corruption), the government, through IIM (Institute Integrity Malaysia), had developed the Corporate Integrity Pledge.

This pledge would allow a company to make a commitment to uphold the Anti-Corruption Principles for Corporations in Malaysia. By signing the pledge, a company is making a unilateral declaration that it will not commit corrupt acts and will work towards creating a business environment that is free from corruption. In 2010 alone, MACC had received over 8,000 poison-pen letters (New Straits Times, 8th December 2011). Out of these letters, less than five percent had a basis to launch investigations.

In other words, although there is a high number of a complaint, MACC had to sift through the reports to ascertain the legitimate ones for investigation. This would of course put a strain on the already stretched resources of the agency. To overcome this problem, the government had introduced the Whistleblower’s Act, an act to protect the well-being of someone who reports misconduct, especially within the civil service. This act would serve the government in two ways; First, there would be less poison-pen letters or anonymous reports regarding corruption received by MACC.

A reduction in these complaints would ensure a better allocation of resources for investigating legitimate complaints. Secondly, the welfare of the whistleblower is safeguarded; which logically would encourage P a g e |14 Fighting Corruption in Malaysia SPA 501 more employees to come forward to report misconduct in their workplace. However, given the relatively short term of the act (it was gazetted in 2010), the success of the act still remains to be seen. A point that leaders tend to overlook when discussing fighting corruption in Malaysia is the salaries of the civil servants.

The incentive for corruption among civil servants and political leaders can be reduced by ensuring that their salaries and fringe benefits are competitive with the private sector (Quah, 2001). The pay scale of the civil servants had undergone 3 revisions in the past 10 years; 2002 with the introduction of SSM (Sistem Saraan Malaysia), 2007 when the SSM pay scale is revised, and 2011, with the introduction of SBPA (Saraan Baru Perkhidmatan Awam). These revisions, although not meant as a tool to combat corruption, nevertheless provided an initiative as part of the government’s arsenal.

In fact, the government’s vision of achieving a high-income nation by the year 2020 would encompass the initiatives outlined here. The additional steps that should be taken by the government regarding the pay scale of civil servants would be covered in part 3. Policing is a term used to describe the implementation part of all the initiatives, programs and policies outlined by the government. It would require a collective effort from all related agencies, each with their own function within the grand master plan.

Bearing in mind that such a collective effort would also require tremendous time, attention and resources, these efforts should be concentrated in order the best result is obtained from the least amount of resources used. P a g e |15 Fighting Corruption in Malaysia SPA 501 The MACC had taken the initiative to ensure that there is a stigma about corruption, as well as to provide a deterrent; the convicted corruption offenders are listed on the MACC’s official website. The message sent by MACC is clear; once you are convicted as a corruption offender, you will be forever tainted.

How far this public ‘name and shame’ database had proven to be successful in reducing corruption remains to be seen; there has yet a study performed which analyses the effect of this act alone in fighting corruption. The NKRA outlined by the government as part of the GTP (Government Transformation Program), also includes several policing initiatives which includes several key agencies. The Royal Malaysian Police, Royal Malaysian Customs Department, Immigration Department of Malaysia, Road Transport Department and Malaysian Anti-Corruption Commission have new, tringent compliance units that need to be adhered to. The Royal Malaysian Police for example, is given a new target of 20% of arrest cases that needed to be brought to trial. Key Customs and Immigration checkpoints are outfitted with closed-circuit cameras; this would act as a deterrent and ensure the compliance of the officers with the procedures and laws. To ensure a speedy trial for those who had been arrested for corruption practices, the government had set up 14 additional courts, specially set up for the purpose of trying corruption cases.

The initiative, which is a joint effort by MACC, PEMANDU and the judiciary branch, had commenced operation since February 2011. To date, 379 cases had been handled. It is the aim of the courts to complete prosecution of corruption cases within one year. P a g e |16 Fighting Corruption in Malaysia SPA 501 From the initiatives listed, it is apparent that the country is on the right track in terms of implementing the correct remedy for fighting corruption. However, it is important to note that the most vital ingredient in any government initiatives would of course be political will.

It is the government that set the moral and ethical tone of the country, the political will of the political masters is critical to the whole process of developing globally accepted standards of business integrity. The absence of political will can only mean one thing; corruption is tolerated as a business necessity. (Tunku Abdul Aziz, 2005). Quah (2003) put strong political will as a more fundamental element compared to the adequacy of anticorruption measures. In fact, he went on further to classify Malaysia as having an ineffective anticorruption strategy, based on the weak political will in Malaysia.

Thus, it can be argued that although Malaysia has several initiatives and sound policies, it would not be enough to carry the nation through, if it’s not backed up by strong political will. If, for some reason, the government of the day would ignore its obligation in providing this will, then that responsibility would of course revert back to the people, as the source of government’s power. The revolution in Tunisia, Egypt and Libya is a case in point where the government of the day had failed to response to the need of the people for stronger political will to combat corruption.

A strong political will would not only need to convince the people of the nation, but the foreign business community as well. As shown in the results of Part 1, approximately half of the citizens feel that the initiatives outlined by the government are effective. That opinion is not shared by the international players; the CPI value for Malaysia is at an all time low. P a g e |17 Fighting Corruption in Malaysia SPA 501 Therefore, improvement on the current initiatives should take into account the foreign clientele as well, as the development of the country relies very heavily on foreign investments.

Part 3 : What (more) can be done ? But eradicating corruption is not enough to sustain a country. ~Eduard Shevardnadze The previous section had listed numerous initiatives and programs carried out by the government as part of its combat against corruption. This section would try to suggest ways of improving on the current initiatives, inasmuch that it would tie in with the strengthening of political will. An effective anti corruption agency would require resources, both financial and personnel. The MACC, although had been granted an independent status, still function at the same amount of resources during their status as ACA.

Table 5 shows the proposed financial resources applied by the agency, and the approved amount. No 1 2 3 4 5 6 7 8 9 10 Type of Expenditure Emolument Additional Manpower Anti-Corruption Incentive Uniform of MACC Officers MACC Panels Activities & Administration Rental Utility Maintenance Course / Meeting / Talk / Training / Inspection Media Monitoring and Database Subscription Allocation Requested (RM) 142,909,800. 00 61,958,211. 54 6,261,600. 00 7,686,058. 00 1,260,000. 00 4,784,880. 00 1,059,400. 00 1,656,000. 00 8,833,800. 00 268,500. 00 Allocation Recommended (RM) 142,909,800. 00 31,200,000. 00 22,510,200. 00 6,261,600. 0 1,500,000. 00 1,000,000. 00 2,850,000. 00 500,000. 00 1,000,000. 00 5,470,000. 00 268,500. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 Allocation Approved (RM) 133,835,300. 00 P a g e |18 Fighting Corruption in Malaysia SPA 501 11 12 13 14 15 16 17 18 19 20 21 Anti-Corruption Campaign Study of Programme on Effectiveness and Community Education Expansion Maintenance for New Vehicles Overseas Duties Renovation of Office Spaces ICT Acquisition Software Licences Year 2010 Capital Asset Acquisition Technical Asset Acquisition Vehicle Acquisition Information Technology Strategic Plan (ISP) Tenth Malaysia Plan Total 690,000. 0 6,400,654. 00 768,740. 00 3,430,658. 00 11,470,399. 56 4,225,000. 00 624,294. 38 21,889,347. 00 28,697,150. 00 8,740,000. 00 500,000. 00 324,114,492. 48 0. 00 500,000. 00 0. 00 1,500,000. 00 4,900,000. 00 1,000,000. 00 500,000. 00 2,830,000. 00 5,930,000. 00 2,000,000. 00 300,000. 00 212,419,900. 00 0. 00 0. 00 0. 00 500,000. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 156,845,500. 00 Source : Special Committee On Corruption 2009 Annual Report Table 5 : Allocation Requested and Approved to MACC for the year 2010

From the data shown, it is clear that the agency is currently operating at the barest minimum; the allocation approved would indeed cover the emolument of the employees, but little else could be done in terms of additional assets and programs. This might be construed as a weak political will; though the government recognizes the threat of corruption and had launched initiatives to counter them, there’s a lack of political will to follow it through in terms of resources.

The economist of the government, when faced with this dilemma, would of course take the Solomon’s approach; each agency is given a slice of their requested allocation. In the case of MACC however, this approach would be pointless. Fighting corruption has to be a concentrated approach; to combat corruption effectively, comprehensive anti-corruption measures must be employed as incremental measures will not suffice. (Quah, 2001). P a g e |19 Fighting Corruption in Malaysia SPA 501 This conundrum is further amplified by the inadequate number of personnel, as shown in Table 6.

No 1 2 3 Source Agency Workforce Population (est) ICAC (Hong Kong) 956 7,000,000 MACC 1,839 28,000,000 MACC (proposed after NKRA) 5,000 28,000,000 : Special Committee On Corruption 2009 Annual Report Ratio 1 : 7,322 1 : 15,226 1 : 5,600 Table 6 : Ratio of Anti-Corruption Agency to the Population Among the recommendation to strengthen the MACC, (proposed during the PEMANDU NKRA Labs), was to increase the workforce of MACC to 5,000 personnel. This increase is viewed as a more realistic approach in combating corruption; to investigate corruption, you would need people as investigators. Alas, this proposal too was not carried out.

In the interest of creating a leaner civil service, PSD (Public Service Department) had issued a freeze on all agencies (with no exceptions), of proposing additional workforce to the agency. We personally think special allowance should had been given to MACC; reiterating Quah’s (2001) point, comprehensive anti-corruption measures must be employed as incremental measures will not suffice. By not allocating enough personnel to MACC, the government is in fact wasting the resources that had been allocated to the agency; any improvement by the agency would be superficial, since the root causes were not addressed.

When investigators must work against the clock, corrupt people can and do get away with their crimes. (TI Annual Report, 2011) There had been numerous initiatives proposed by various parties to reduce opportunities in combating corruption. Tunku Abdul Aziz (2005) had outlined several key improvements that he thinks would benefit the country. Among this is declaration of assets; whereby all members of the Cabinet, including the Prime Minister, would be required to declare their assets and their spouses and immediate families to an independent, all-party P a g e |20

Fighting Corruption in Malaysia SPA 501 parliamentary commission, with public access to the data. This initiative had been proposed numerous times over the years, not just by Tunku Abdul Aziz, but by other scholars, local and foreign. On the face of it, the adoption of this initiative requires little effort on the government; the declaration process itself is a fairly straightforward process. The decision not to adopt therefore, rest with the weak political will of the government of the day.

In the long run, it raises the question among the domestic and foreign stakeholders, if the senior leaders of a country refuses to declare their assets, what exactly are they hiding ? A similar argument can be made for the appeal for transparent public procurement. To date, only the Pakatan Rakyat led state of Penang had adopted the practice of open tenders for public procurement. Studies had shown that close tenders and closet procurement practices (direct negotiations powers awarded to Ministers is one example) would lead to systematic corruption.

This would in turn add 20 – 25% to the costs of government procurement (Tunku Abdul Aziz, 2005). Though the setting up of the MyProcurement portal could be considered a step in the right direction, it lacked the political will to support the initiative, comparing again with the system set up by the Penang State Government – a truly public procurement practice, whereby all notices of tenders, awards and protest is performed online, and made visible to the public. In Malaysia, perhaps more so than any other country, simply raising the salaries of the civil servants would not be enough.

The government would also have to control the inflation rate, since a high inflation rate due to an increase of civil servants salary would render the increase superfluous. P a g e |21 Fighting Corruption in Malaysia SPA 501 Chart 4 shows the inflation rate in Malaysia, and how it compares with each revision of the pay scale of civil servants. It is interesting to note that inflation levels increased in the year following an increase in the pay of civil servants. In fact, the more significant the pay raise, the more significant the inflation rise is.

It could be then be argued that more important than raising or revising the pay scale, would be to control the inflation rate of the country. The relationship between corruption and inflation is not mutually exclusive; studies had shown an increase in one would undoubtedly lead to an increase of the other (Braun & Di Tella, 2004). 6. 00% 5. 00% 4. 00% 3. 00% 2. 00% 1. 00% 0. 00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 30. 00% 25. 00% 20. 00% 15. 00% 10. 00% 5. 00% 0. 00% Inflation Rate (%) % Increase in Pay

Source : Department of Statistics & Public Service Department Chart 4 : Comparison of Inflation Rate versus Increase in Pay It is then in the interest of the government to ensure the purchasing power of the civil servants would be adequate, otherwise it would be difficult to counter the petty corruption practices. To achieve that goal, the government must be able to successfully control the inflation rate. This is by no means a simple task; governments all over the world had been trying to effectively control inflation to a manageable rate.

However, the countries such as Hong Kong and Singapore had proven that inflation is, in fact P a g e |22 Fighting Corruption in Malaysia SPA 501 manageable. It would require a collective effort from many agencies, led by the ministers and political masters with strong political will. The government had taken a step in the right direction with the addition of 14 special courts for corruption cases. This initiative would definitely assist in reducing the backlogs of unresolved cases. However, this does not address the issue of judiciary corruption, which still remains an untouched issue.

The 1988 constitutional crisis, which had effectively stripped the judicial branch of its power when Article 121 was repealed, had only managed to give cause for the Executive branch to encroach on the jurisdiction of the judiciary. This gave birth to a multitude of other corrupt judicial practices; the most telling would be the VK Lingam’s case. This in particular had been a major issue, which should be given equal attention by the government. We would suggest that Article 121 of the Federal Constitution be reenacted, in line with the doctrine of separation of powers. We would go further and argue for the re-establishment of the jury system.

This is not something new, the Malaysian Bar had been asking for a revival of the jury system for years. We believe that the re-establishment of the jury system, whereby the verdict is given by a jury chosen from the common people, would not only be viewed as impartial, but would assist in changing the perception that the judiciary is corrupt. P a g e |23 Fighting Corruption in Malaysia SPA 501 Conclusion No anti-corruption measures known to man, and no country in the world, can claim to have succeeded in stamping out corruption. All that we can hope to do is contain it, and make corruption a risky and an unprofitable business. Tunku Abdul Aziz It had been shown that the corruption level in Malaysia is a mixture of grand and petty corruption, though there are evidences which points it gravitates more towards the former. Numerous initiatives had been taken, countless resources had been allocated, copious amount of committees, sub-committees had been set up to study and fight corruption. Has it been successful ? There is no clear cut answer, because it depends largely on to whom the question is asked. The international community seems to disagree, while some of the domestic community tends to agree.

Whatever the task of the government, be it good governance, fighting corruption, depends on two broad factors, namely capacity and will (Lim, 2009). The initiation of the multitudes of programs to fight corruption would reflect that the government is not short on capacity; we are capable of producing the required programs needed to eradicate corruption. As to the question of will, specifically political will, therein lays the stumbling block. There had been too many half-attempts, initiatives that looked good on paper, but lacked the political will to drive it.

It came to a point where it made the job of the successive leaders much more difficult, the people had been fed with one lie too many. In other words, the challenge facing the new leaders (e. g. Datuk Seri Najib, Malaysia’s Prime Minister, Dato’ Sri Abu Kassim, Chief Commissioner to the MACC) is compounded; not only do they have to fight corruption, they are also required to convince the stakeholders, P a g e |24 Fighting Corruption in Malaysia SPA 501 both domestic and foreign, these initiatives are serious efforts, and signals increasing political will.

The idea that the initiatives proposed by Malaysia are sound is not new; Quah (2003) had classified Malaysia as having an adequate anticorruption measure. However, sustained commitment of political leaders, basically political will, is needed for the country to effectively curb corruption. Some might ask, what choice do the people have, if the government of the day chose not to exercise their political will ? The answer is actually simple; the government of the day received their powers from the people, namely the citizens of the country.

If for some reason, the people feel that the elected government is not exercising their political will, then a strong message had to be given. The government should be made to realize that there is extreme dissatisfaction in how things are run. That is the only way. Keeping quiet would tantamount to concurring with what the government is doing. P a g e |25 Fighting Corruption in Malaysia SPA 501 References : Braun, Miguel & Di Tella, Rafael (2004) Inflation, Inflation Variability, and Corruption. Economics & Politics, Vol. 16 Caiden, G. E. 1981) Public maladministration and bureaucratic corruption, Hong Kong Journal of Public Administration Jon S. T. Quah (1999) Corruption in Asia Countries : Can It be Minimized ? , Public Administration Review Jon S. T. Quah (2001) Combating Corruption in Singapore: What can be learned ? Blackwell Publishers Ltd. Jon S. T. Quah (2003) Curbing corruption in Asia: A comparative study of six countries, Singapore: Eastern Universities Press Lim Hong Hai (2009) Approaching the Public Service: The Basic Issues and Conceptual Lenses New Straits Times (8th December 2011) Poison-pen letters waste resources. ttp://www. nst. com. my/local/general/poison-pen-letters-waste-resources1. 16440 (Accessed 10th December 2011) P. Bardhan (2003) The economist’s approach to the problem of corruption. http://emlab. berkeley. edu/users/webfac/bardhan/papers/number5. pdf (Accessed 14th October 2011) Palmier, L. (1985) The control of bureaucratic corruption: Case studies in Asia, New Delhi: Allied Publishers Pope, J. (ed. ) (1996). The TI Sourcebook, Berlin: TI Rose-Ackerman, Susan (2004) The Challenge of Poor Governance and Corruption. ttp://www. copenhagenconsensus. com/Files/Filer/CC/Papers/Governance _and_Corruption_300404_(0. 7MB_version). pdf (Accessed 14th October 2011) Sidek, Mohd. Haji Hassan (2010) Garis Panduan Tindakan Ke Atas Sokongan Yang Diterima Daripada Pemimpin Kerajaan, Individu Berpengaruh Atau Mana – Mana Orang Mengenai Sesuatu Urusan Kerajaan. http://www. mampu. gov. my/c/document_library/get_file? uuid=3147895ca717-4f2c-8b19-e5779ee60a77&groupId=10136 (Accessed 15th October 2011) P a g e |26

Fighting Corruption in Malaysia SPA 501 Tunku Abdul Aziz (2005) Fighting Corruption : My Mission, Konrad Adenauer Foundation United Nations Development Programme (UNDP) (1999), Fighting Corruption to Improve Governance, New York Wan Abdul Aziz Wan Abdullah (2010) Garis Panduan Pelaksanaan Integrity Pact Dalam Perolehan Kerajaan. http://www. treasury. gov. my/pekeliling/spp/spp102010. pdf (Accessed 15th October 2011) World Bank (1997) World Development Report 1997. http://sedac. ciesin. columbia. edu/openmtg/docs/Guimaraes_plenary. pdf (Accessed 14th October 2011) P a g e |27

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Corruption in Malaysia. (2016, Sep 16). Retrieved from https://graduateway.com/corruption-in-malaysia/

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