International Conference On The Challenges Of Democratisation And Good Governance In The Malaysian Public Sector

Good Governance and the Future of Malaysia

Assalamualaikum Warahmatullahi Wabarakatuh

Salam Sejahtera

Bismillahi Rahmani Rahim

Beta bersyukur ke hadrat Illahi kerana dengan izin dari Nya juga, Beta dapat berangkat untuk menzahirkan Ucap Utama dan seterusnya merasmikan ‘International Conference On The Challenges of Democratisation and Good Governance in the Malaysian Public Sector’.

  1. I am delighted to be here to share my thoughts on the subject of good governance and the future of Malaysia. These two subjects have been very much on my mind these days and, of course, they are inextricably linked. Without good governance, Malaysia’s future is likely to be dismal. There is no shortage of discussion about what good governance entails. In fact, good governance has been a subject of study throughout history, not least by Plato in his discourse on the ‘philosopher-kings’ or ‘guardians’ almost 2,500 years ago. More than a thousand years earlier, the Babylonian king, Hammurabi, devised his famous code of laws even though its provisions would probably not go down too well today.
  2. While there seems to be a lot of encouraging interest on the topic of good governance, it is important that they are matched with corresponding practices. We have seen countries with great gifts of natural resources fail miserably at uplifting living standards and quality of life. At the same time, countries with little more than barren rock have managed to propel themselves to the top of the world’s leader board. Many studies have established a relationship between governance and development. For example, a recent study led by Stephen Knack[1], Senior Research Economist at the World Bank, revealed that successful economic development depends critically on the way societies are organized and governed. The study established that “good governance is a prerequisite to sustained increases in living standards”[2]. This finding and many others support the findings of a celebrated study conducted two decades earlier by the late Lloyd Reynolds, onetime Economics Professor at Yale University[3]. In his study, Reynolds asked a deceptively simple question: Why had economic growth spread to some countries in the developing world and not to others. His analysis of 40 countries covering a period of 130 years, led him to one conclusion. He found that more than capital, labour, technology, education or even knowledge, “the single most important explanatory variable (of development) is political organization and the administrative competence of government.”[4]
  3. These findings should come as no surprise. The legitimacy of many governments is linked to their ability to maintain social stability and to raise the quality of life of their citizens. Any government that is unable to provide both security and succour is bound to have its credibility called into question. Countries that have risen from the ashes are precisely those whose governing institutions are responsive to the public interest.
  4. Malaysia can be taken as a case in point. For the last five decades, successive administrations have sought to maintain social peace while getting on with the job of improving the quality of life of the people. It is a job that has consumed all our leaders. At the time of Independence, many in the outgoing British administration did not believe that this would work. Racial politics, they said, would paralyse the governing institutions and render the country ungovernable.
  5. Of course, they were wrong. What these pessimists did not count on was the fact that political parties could and would unite and cooperate across racial lines for the common cause of nation-building. The naysayers did not realise that Malaysia’s governing institutions would be held accountable to a multi-racial coalition and function effectively for the good of all Malaysians.
  6. I do not have to tell you that what Malaysia has achieved over the last fifty years has been substantial. In contrast to many developing countries where efforts at good governance have gone down the drain due to lack of political will at the top and uncooperative and corrupt bureaucracy from below, Malaysia has stayed on-track. The World Bank classifies Malaysia as an upper middle income country[5]. The United Nations Development Program regards Malaysia as a country with a high development index. It ranks 15 out of 102 countries on the human poverty index[6]. These are no ordinary achievements and they have not come easily.
  7. Imagine where we were 50 years ago. At the time of independence in 1957, the country’s future was far from assured. The country was born against a backdrop of a virulent communist insurgency. There was little sense of national unity and national identity among the people. The states that make up the federation were only loosely integrated. Poverty was widespread, particularly in the rural areas. Our neighbours, Indonesia and Philippines, opposed the enlargement of Malaya into Malaysia in 1963, leading to confrontation with the former. After the 1969 riots, many predicted the imminent disintegration of Malaysian society.
  8. That the country was able to survive, let alone prosper, these last 50 years was due in large part to political resolve, pragmatism and effective implementation of policies ⎯ in short to good governance.
  9. All this, however, is not to imply that we have closed in on the type of governance that we need for the future. According to the World Bank, the number of days for a business to deal with licenses in this country averages 226, and the number of days required to register property 143. This compares with 32 days for the latter in Australia and China. In 2006, Malaysia ranked 44 out of 163 countries on Transparency International’s “Corruption Perception Index” (CPI). On a scale of zero, for highly corrupt, to ten, for very clean, Malaysia scored only 5 points. Clearly there is much room for improvement. In this regard, I commend the government for initiating and formulating the National Integrity Plan as a comprehensive blueprint for instilling integrity and moral values in all layers of society and across all sectors.
  10. I would suggest that if we are to realise a system of good governance in Malaysia, we will need to keep firmly on our minds and in our sights, what good governance is. Perhaps then, the process of change, which has begun, can accelerate.
  11. Let me turn first to what I think good governance is. Governance, in so far as public institutions are concerned, is the process by which decisions are made and implemented in order to pursue public goals and manage public resources. Good governance then is the process by which the public goals and the processes to achieve them are established in an efficient, effective and ethical manner.
  12. I believe that any system of good governance will demonstrate distinct characteristics and I shall name a few.
  13. A system of good governance accords fully with the rule of law and the spirit of the law. It does not result from, nor can it be justified by, illegal or even legally-suspect actions. Unless the governors live well within the law, there can be no hope that the governed will do so.
  14. Furthermore, good governance is palpably at odds with unprincipled, immoral and unethical behaviour. It cannot exist where there is lack of integrity. Attitudes and behaviour based on the principles of integrity is arguably the most important element in good governance. The absence of it can undermine the legitimacy of public institutions and disrupt policy goals. Governance systems cannot rise to become good until and unless the people who are involved rise as well.
  15. For good governance to exist there must be transparency and openness. The system of governance must encourage the free flow of and easy access to information. People who are well-informed are in a better position to make informed decisions. Conversely, those who are badly informed will rely on half-truths and lies, they will have to depend on non-credible sources of information, or they may have to remain ignorant. This can cause attention to be directed to frivolous matters, while positive and commendable efforts on the part of the government go unseen, nullifying those efforts. When the actions of those in power do not come under scrutiny by the public, opportunity for misconduct becomes more attractive. Likewise without proper information about processes and regulations, the public is vulnerable to bureaucratic harassment, overcharging and demands for bribes.
  16. Thus, we need to continuously move towards an increasingly open system of governance. Eradication of red tape and convoluted bureaucratic procedures will help stave off high economic costs and inhibit any opportunity for illicit payments. The amount of regulation, permits and licenses must be reduced. By using the internet, for example, there should be complete transparency for all permits and licenses retained. Tendering processes need to be made more competitive and transparent. “Whistle blowers” should be protected against retaliation from those complained about. These measures will help toward reducing the opportunities for corruption. In this regard, I am happy to note the establishment of Pasukan Petugas Khas Pemudahcara Perniagaan or PEMUDAH early this year – a collaborative project between the public and private sectors that aims to simplify operations and improve the efficiency and effectiveness of the public delivery system.
  17. It is axiomatic that good governance entails accountability by those in positions of authority. While public officials should be accorded sufficient power to deliver good governance, there must be effective restraints on the arbitrary exercise of that power so that the general interest and not special interests are served. The importance of judicial independence and the formal separation of powers among different branches of government cannot be overemphasised.
  18. Good governance involves active and widespread public participation. Citizens today are increasingly educated, sophisticated and equipped. They demand more from government but trust it less. They demand a progressive and representative form of government. They want to be part of decision-making that affects their lives and livelihood. They are more interested in achieving outcomes rather than in obeying rules. They welcome and appreciate a government that is approachable and consultative; one that guides rather than one that directs. It is therefore only logical that the call for good governance should and must go hand-in-hand with the call for greater democratisation, as both are intertwined although conceptually distinguishable. The theme of this conference aptly includes the term ‘democratisation’ alongside ‘good governance’. Democracy provides the avenue by which the various constituencies can give voice to the way they choose to be governed. It is government by consent. The democratisation process must also recognise the important role of non-governmental organisations. Their participation should be encouraged to the extent that they assist the institutions of power to function better.
  19. There is a school of thought that equates good governance with less government. This is part of a long-standing debate, particularly within the economics profession, about the proper role of the state in development and public life generally. In some countries, state intervention has been widespread and pervasive, where the state has intervened heavily in setting prices and taking over productive enterprises. When it has worked well, the result has been a developmental state that has promoted industrial transformation and stimulated economic development. When it has not worked well, state intervention has verged on the predatory, extracting resources and providing nothing much of value in return. Other countries have opted for a minimalist state, characterised by low flat tax rates, small public sector employment and modest public sector expenditure as a proportion of GDP.
  20. The debate is likely to continue for a long time with some preferring greater state involvement as in the case of the welfare economies of Scandinavia, while others prefer less state intervention and greater efficiency. Both ends of the spectrum see what they want to see. Some believe that most government functions could be done better by the private sector; others are suspicious that any addition of the private sector to the public sphere unfairly enriches the private sector and undermines the common good. A complete discussion of this issue would take us too far from the topic at hand, and could perhaps form the subject matter of another conference.
  21. Be that as it may, the quality of governance has become a central distinguishing factor among nations. In an age of globalisation and increasing interdependence, the stakeholder base has widened. Governments have to respond as much to a foreign as to a domestic clientele. Only if we come to terms with this and be committed to upgrading the quality of governance, can we circumvent the heavy costs in the form of outflows of capital, skills and knowledge, and the loss of economic opportunities.
  22. Someone once said that when it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened. I hope for all our sakes that that we will be those who actively make our future and not just let things happen or end up clueless as to what happened. Malaysia can be sure of a bright future if its system of governance is able to adapt to changing realities, both within and outside the country.
  23. Working towards an ideal system of governance is not an easy or painless process, but it is absolutely vital. We must remain optimistic that we are able to raise the bar by more than a few notches. This is where I would like to pay tribute to the organisers and participants of this conference. To be change agents we must participate actively in dialogue and collaborative action. This atmosphere of sharing is clearly evident at this conference. I hope that it will generate beneficial outcomes.
  24. Semoga Persidangan memenuhi matlamat menemui penemuan baru dan mencapai resolusi yang realistik lagi pragmatik.
  25. Dengan kalimah Bismillahi Rahmani Rahim, Beta sukacita merasmikan ‘Conference on Democratisation and Good Governance in the Malaysian Public Sector’.

Wabillahi Taufik Walhidayah

Wassalamualaikum Warahmatullahi Wabarakatuh.

  1. Knack, Steven, ed; Democracy Governance and Growth, 2003 (Michigan: University of Michigan Press).
  2. Ibid, p 11.
  3. Reynolds, L.J., The Spread of Economic Growth to the Third World: 1850-1980, Journal of Economic Literature, 1983, Vol. 21, pp. 941-980.
  4. The World Bank; World Development Report 2002 – Building Institutions for Markets; p 99.
  5. World Bank Country Brief Report: Malaysia, 2006
  6. United Nations Development Program Malaysia
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