Every year when the Auditor General presents his report many are shocked by the findings on many of areas of maladministration. Mismanagement has often included purchasing items at ridiculously high prices for equipment and tools, goods that are wrongly specified and cannot be used, facilities built grossly in excess of what is required and at inflated prices, and procurement done without tender, thus flouting regulations. While one may try to be politically correct, and say that these are “mistakes” made due to a lack of knowledge, poor training and mismanagement, one must not dismiss that there are elements of corruption here. Such misdeeds continue to occur year after year and actions that may have been taken (if any) against those who are accountable have not been made public. In addition, effective preventive measures must be instituted against such abuses. Going for significant improvement would require identifying the root causes that gave the abusers the opportunities to extract gains for themselves or for their proxies.
Corruption, defined as the abuse of entrusted power for personal gain, is often fed by the process of “state capture” whereby those in a position to determine or influence important decisions, abuse this privilege to change policies, procedures and processes to favour themselves or their proxies. State capture is usually carried out through a process of manipulation and may involve politicians, high-ranking officials and businessmen, all acting in a concerted manner to favour a bid (in case of tender) of their choice. The lopsided awards of concessions in the privatisation of utilities are classic examples of how state capture has occurred to benefit certain groups of individuals. In many cases, the civil servants who are involved in these processes do not benefit personally from them. But, either for fear of reprisal, or because they want to be obedient to their bosses, they may carry out certain instructions, even though they know that they are contrary to good governance. Furthermore, with the opaqueness in government decision making as fettered by the all-encompassing Official Secrets Act, public accountability is undermined.
State capture usually thrives in a highly politicised civil service administration where civil servants’ opinions are often disregarded and replaced by political expediencies. It is also prevalent where there are few or ineffective check-and-balance systems, and potential abusers believe that they can enjoy immunity from investigation and prosecution. Coupled with a lack of administrative reforms to strengthen accountability and the clarity of law and regulations, abusers can find it easy to extract economic rent from the state without the fear of being reprimanded.
In order to see a more significant improvement in its financial management, the government must take the bold step to remove any apparatus supporting corruption through the process of state capture. In addition, the process of procurement, especially for items involving large sums of money, must involve the participation of independent monitors at every stage of the tender process, starting from the need analysis, formulating the required specifications, prequalifying bidders, evaluation of tenders, and the implementation of the successful tender. What is currently practiced in the implementation of the MRT project is commendable, and the independent monitors nominated by the MACC and the Auditor General must exercise true independence without fear or favour.
With the increasing government budget deficit and the removal of subsidies, the public is demanding more accountability and public disclosure of how and what decisions are made.
Issued by
Datuk Paul Low,
President, Transparency International Malaysia
