Breaking from the bad practices of the past
I REFER to the erudite piece by the eminent academic Professor Terence Gomez, “Patronage is king?” (StarBizweek, Jan 12), which raises the obvious question as to whether the former prime minister’s mantra “cash is king” has given way to a new “patronage is king” ethos.
In most democracies, including the United States of America, patronage or the spoils system prevails with hundreds of appointments being handed to persons of political affiliation, donors to political causes, friends, family and associates of the top political leadership. Political appointees, as they are called, are placed in various high-level positions including the leadership of federal and state agencies, ambassadorships and directorships of corporations and regional and sometimes global institutions.
These appointments would draw people from various professional backgrounds including law, accountancy, banking, business, education, politics and other public service fields, are usually for a fixed term and often dependent on the tenure of the head of government who makes these appointments.
Competence or transparency often seems to be a consideration but is largely a secondary concern in these appointments, although some level of expertise, loyalty and strength of character are essential. On the surface, they seldom meet the criteria of being purely merit-based.
In Malaysia, the current government has inherited a system where some of these appointments are not only prestigious but also carry relatively lucrative incomes and perquisites. To its credit, in this current government, the prime minister has delegated the powerful finance portfolio (held by the previous prime minister) to another Cabinet minister and there is an ongoing review of the high allowances at some of the GLCs. Newly appointed persons in some of these companies are also there on relatively more modest terms.
The question that we should be asking, which Gomez has persistently asked, is whether our government should be in business to the extent it is in, owning almost 45% of the equity of listed companies and running business as an appendage of a politicised administration.
We should also be concerned about the near monopolies that some of these GLCs enjoy. Although the number of politicians in the boards of these companies has declined since 2011, as pointed out by Gomez in the book Minister of Finance Incorporated (2017), he is now concerned about appointments under the current government.
George A. Akerlof and Robert J. Shiller in their book Animal Spirits (2009) caution that the appropriate role for government is to set “the stage to give full rein to the creativity of capitalism. But it should also countervail the excesses of our animal spirits.”
The situation that the current government inherited is a difficult one. Time, technocratic talent and patience are needed to gradually come out of it even with the will to do so. Perhaps more time is needed to break from the inappropriate practices of the past. M. SANTHANANABAN Kajang