The next govt’s reform agenda

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.

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