Malaysia Uncut

A Repository of Malaysian Stuff and More

Countries at the Crossroads 2006 – Malaysia

Countries at the Crossroads 2006

Country Report – Malaysia

Introduction

Malaysia’s patterns of politics and governance, combining authoritarian controls with democratic procedures, have cumulated in what can broadly be understood as a hybrid regime. During 2004-2005, limits on freedom of communication and assembly persisted. Arrests also took place during this period under the country’s Internal Security Act, legislation that permits preventive detention without trial. Despite these controls, electoral contests remain competitive enough that when the government won reelection by wide margins in March 2004, analysts regarded its victory as convincing. 

Malaysia’s judiciary, though sophisticated by regional standards in its infrastructure and form, lost much of its independence during the 22-year tenure of Mahathir Mohamad, the former prime minister. However, since Abdullah Badawi became prime minister in November 2003, the courts have recovered some of their earlier standing, signaled most clearly by the release from prison of Mahathir’s one-time rival, Anwar Ibrahim, the former deputy prime minister, although he has not been fully exonerated.

The government’s record on gender equity has been reasonably sound, with little evidence of official discrimination against women in civil service appointments. The record on minority rights has been less equitable, however, with Malays systematically advantaged over ethnic Chinese and Indians through the New Economic Policy (NEP) and various successor programs. Indeed, during 2005, pressure mounted within the United Malays National Organization (UMNO), the country’s dominant political party, for the revival of NEP quotas and redistributive measures. Religious groups judged deviationist by the government were harassed during 2003-2005. Developers and logging companies continued to trample on the customary land rights of indigenous groups.

Public accountability is a serious problem in Malaysia, with collusion between government politicians and favored business people. During 2004-2005, however, Abdullah terminated or reviewed several dubious state contracts, then called for open-tender bidding. Moreover, the country’s Anti-Corruption Agency began to conduct investigations more seriously. A few top officials were arrested and committed to trial, an unprecedented action in Malaysia. A commission was also established to review police performance, and it released a midterm report in 2005 that proposed unexpectedly rigorous reforms. On the other hand, despite much rhetoric on anticorruption and transparency, the government’s campaign against corrupt practices remained sporadic. Suspended state contracts were in some cases restored, investigations grew infrequent, and police behavior appears so far to have remained unchanged.

Accountability and Public Voice – 3.04

In Malaysia, elections are held regularly as provided for in the constitution. They have been meaningful in the sense that an elected prime minister wields state power, the voting is inclusive, enough opposition parties are registered that a multiparty system exists, and vote counting and reporting are promptly carried out. However, closer inspection reveals some distortions. The campaign period is kept brief, usually less than two weeks. Opposition candidates receive little access to mainstream media outlets. And while limits on campaign contributions and spending are formally codified, the government mostly ignores them in its own campaigning, and it appears not to have scrutinized opposition finances closely either.

Furthermore, although the voting franchise is inclusive, electoral rolls are frequently manipulated though unannounced transfers of voters across constituencies. Ballots contain numbered counterfoils, posing a subtle form of intimidation because individual preferences could conceivably be discovered. Counting centers are small, dealing with perhaps six hundred votes across “streams,” broadly revealing local preferences. Opposition parties are not permitted to oversee the counting of postal ballots cast by members of the military and police, nor do they gain equal access to polling station data. The Election Commission that supervises electoral procedures is partisan.

Municipal- and district-level elections have been suspended since the mid-1960s. At the parliamentary level, a plurality system based on single-member districts magnifies the thin margins that the government sometimes obtains into extraordinary parliamentary majorities. Partisan redistricting, last organized by the Election Commission in 2003, then ratified by parliament, further ensures the government’s dominance. Districts are thus heavily distorted through malapportionment and gerrymandering.

Under these conditions, opposition parties can gain significant numbers of parliamentary seats and win some state-level assemblies outright, but they are prevented from winning enough seats to form their own federal government. Still, when Malaysia’s last general election was held in March 2004, the popularity of the new prime minister, Abdullah Badawi, and heightened suspicions about the Islamist-led opposition, contributed to a government victory so overwhelming that it could hardly be attributed to electoral manipulations. Indeed, the government’s share of the popular vote reached 65 percent, an increase of roughly 10 percent over the previous election in 1999-an outcome widely attributed to Abdullah’s comparative popularity over Mahathir.

Despite Malaysia’s federalist and parliamentary arrangements, state power remains tightly centralized in the hands of the executive. Institutional checks, horizontal accountability, and local autonomy thus remain very limited. Indeed, in an address in mid-2004, the minister of parliamentary affairs in the Prime Minister’s Department, Nazri Aziz, dismissed the notion of separation of powers as “too idealist” for Malaysia. But while the concentration of power has many negative effects, it has ensured that people’s political choices are rarely overruled by other kinds of organized interests, including the military, economic oligarchies, regional hierarchies, or foreign powers.

Under the NEP and its successor programs, ethnicity-based reverse discrimination has long ensured that civil service recruitment has been heavily tilted toward Malays. In addition, during Mahathir’s tenure civil service careers lost much of their prestige relative to corporate and entrepreneurial pursuits. As a result, despite the retention of merit-based examinations and promotion criteria, bureaucratic performance appears to have declined. Abdullah has signaled his commitment to restoring good governance in the public sector. Thus, in public enterprises, top positions appear now to be filled with more regard for professionalism.

While nongovernmental organizations (NGOs) in Malaysia must gain official registration, requirements are not usually onerous. The government is responsive to civic groups that it regards as oriented toward problem-solving, especially those geared to governance and consumer issues. By contrast, the government generally ignores NGOs committed to stronger advocacy and more systemic reforms. Fearful of being tarred by the government as being in the pay of foreigners, these latter groups have usually forgone contributions from overseas, leaving them to subsist on membership dues and subscriptions. They are also denied access to mainstream media outlets and frequently to commercial printing firms, remaining confined to an internet presence. Suhakam, a human rights commission set up by the government, has on occasion investigated restrictions placed on civic organizations, although it is weakened by the partisanship of some appointees. In any event, its recommendations are often unheeded by the government.

Article 10 of Malaysia’s constitution guarantees rights of free expression. Article 149, however, enables parliament to restrict expression when it believes the national interest to be threatened. The most important piece of such legislation is the Printing Press and Publications Act, requiring all print media to obtain annual licenses from the Internal Security Ministry. If the ministry finds that a publisher has maliciously published what is deemed to be false news, it may revoke or refuse to renew its license. The publisher can also face charges that, if upheld in court, incur fines and prison terms.

Several other laws also restrict press freedoms, including the Sedition Act, the Official Secrets Act (OSA), the Control of Imported Publications Act (which enables the government to ban the circulation of foreign publications in Malaysia when they are viewed as prejudicial to national security or public morality), and the Broadcast Act (which empowers the minister of information to monitor radio and television broadcasts and to revoke licenses). These laws deaden the political reporting of the mainstream media in Malaysia.

A government-controlled news agency, Bernama, set up in the late 1960s but vastly strengthened in 1990, has exclusive rights to distribute economic data, news photographs, and other material through the print media. Patterns of media ownership extend government control even more deeply. All major newspapers-whether Malay, Chinese, or English language-and all broadcast outlets are owned either directly by the government or by companies linked to political parties in the ruling coalition, enabling them to be used for partisan purposes. The government and top business people aligned with it have also resorted to libel suits, especially against the international press, in response to critical analysis.

Even so, during 2004-2005, the courts sometimes ruled against the government or its allies in libel cases. In this situation, the mainstream print media grew more willing to provide analysis critical of the government, while giving more extensive coverage to the internal dealings of opposition parties, especially general assemblies and party elections. Malaysiakini, an internet-based news daily, was also permitted to start up a Chinese-language version during 2005. And most surprisingly, the People’s Daily, often regarded as the mouthpiece of the Communist Party of China, received a publishing and printing permit, enabling it to produce its inaugural tabloid in Malaysia on January 1, 2005. Probably owing to self-censorship, there were no reports during the period under review of journalists being intimidated or coerced by state authorities. Nor, in contrast to 2003, were there reports during this period of journalists investigating local triads being victimized by nonstate actors, though this is probably more attributable to journalists’ increasing caution than any serious reduction in criminal activities.

Recommendations

  • Malaysia’s Election Commission should be made independent, a first step toward which might involve removing it from the prime minister’s department. Commissioners should also be selected through transparent procedures from among qualified personnel, rather than simply hiring trusted civil servants nearing retirement.
  • Restrictions on campaign financing and expenditures should be more rigorously enforced.
  • Civil service recruitment should gradually be widened to non-Malay applicants, providing a larger pool of candidates in order to restore bureaucratic quality and merit.
  • The licensing system associated with the Printing Presses and Publication Act should be abolished in order to encourage greater media scrutiny of the government and business dealings. Safeguards should be put in place to reduce the partisanship of libel cases.

Civil Liberties – 2.97

Malaysian law prohibits arbitrary arrest. However, two pieces of legislation, the Internal Security Act (ISA) and the Emergency (Public Order and Prevention of Crime) Ordinance, empower the minister of internal security and the police to detain persons indefinitely without trial if reasonable suspicion is said to exist. Further, the Dangerous Drug Act has been amended in ways that also permit preventive detention by the police, though only for 39 days.

The ISA, in place since 1960, is used primarily against opposition politicians, dissidents, alleged terrorists, and criminals whose activities are deemed to affect national security. Detainees are held in undisclosed places, they remain uninformed about the reasons for their arrest, and they are denied access to legal counsel or family visits. Given the absence of judicial oversight, suspicions persist that detainees are regularly subjected to harsh treatment, amounting to psychological and sometimes physical torture. After the initial period of interrogation under the ISA, the minister of internal security may issue a two-year detention order, under which detainees are generally transferred to a central facility. Conditions then usually improve, with detainees able to gain legal counsel and have limited family visits. However, detainees have no protection against consecutive detention orders, amounting to indefinite detention. Still, there are no documented instances of the government’s going so far as to kill its political opponents.

In its annual report for 2004, Suhakam recorded that the number of ISA detainees had increased from 97 in 2003 to 113 in 2004. The majority were held for alleged terrorist activities. But forgers were also detained even though they, in the view of Suhakam, should instead have been dealt with through the normal penal system. In December 2004, 20 detainees accused prison security personnel of beating them during a spot check. The Abolish ISA movement (AIM) took up their case, calling for Suhakam to mount a public inquiry. A parliamentary caucus also pledged to investigate. In July 2005, the habeas corpus applications of nine detainees from the opposition Parti Islam SeMalaysia (PAS), including the son of the chief minister of the state of Kelantan, were dismissed by the federal court, leading to public protests in Kuala Lumpur. In addition, five students deported from Pakistan while studying at a local madrassa were detained on their return to Malaysia in 2003 (the “Karachi 5”). Though finally released in March 2005, they were placed under restricted residence orders, limiting their freedom of movement.

In criminal cases, police have invoked the Emergency Ordinance, enabling them to detain local gangsters and drug lords for an initial 60-day investigation period without a remand order. The minister of internal security can afterward order two-year periods of detention in a centralized facility or impose restrictions on movement. The Dangerous Drug Act permits detention for 39 days without a remand order. Ill-treatment of ordinary criminals detained under the Emergency Ordinance and Dangerous Drug Act results in frequent deaths in police custody. Abdullah’s taking office as prime minister has not been accompanied by relaxation of any of this legislation. On the contrary, in an address to the Asia Media Summit conference held in April 2004, Abdullah stated that “we have in place tough laws and some of them are preventive in nature&. [W]e do not apologize for them.”

Turning to issues of gender discrimination, in 2005 three women held full ministerial posts in Malaysia’s government, including the minister of trade and industry. Women also held top positions in the state apparatus: Zeti Akhtar Aziz is governor of the central bank, while Siti Norma Yaakob was appointed in 2005 as Chief Judge of Malaya, one of the country’s four top judicial positions. Moreover, throughout the civil service, women are reasonably well represented. On the other hand, while women are nominated as electoral candidates by UMNO and its main coalition partner, the Malaysian Chinese Association, the proportion of candidacies they gain remains quite small, especially at the state level. They face even greater discrimination in PAS.

Further, although the constitution’s recently amended Article 8(2) appears to protect women’s interests in economic life, the government’s overall responsiveness to women’s issues-often forcefully articulated by a few small but prominent women’s organizations-has been inconsistent. By UN standards, Malaysia’s Sharia courts, whose jurisdiction for Muslims is compulsory in some areas, have discriminated grossly against women, especially in family law cases. But women have also faced discrimination in the country’s secular court system. For example, in May 2005, the Federal Court rejected an appeal by a former flight attendant, Beatrice Fernandez, against an earlier judgment that favored her employer, Malaysia Airlines. Fernandez had been forced to resign in 1991 after becoming pregnant, prompting her to mount a 14-year legal battle to declare her termination as void. Responding to the federal court’s ruling, academic Andrew Aeria characterized the Malaysian judiciary as “stuck in the Dark Ages and in dire need of enlightenment as far as the views of gender-based discrimination are concerned.”

Malaysia does not comply fully with even minimum standards for eliminating human trafficking. Suhakam has drafted a national action plan for containing trafficking, but it has not yet been approved by the government. Without comprehensive legislation, victims are deemed illegal migrants and can be arrested under immigration laws. Trafficked victims are also recruited into prostitution, sometimes with the connivance of local officials. In February 2005, some home ministry officials in the National Registration Department were detained under the ISA for issuing forged permanent resident identity cards to human trafficking groups. The government appears to be trying to improve its record, however. In December 2004, the Ministry for Women, Family and Community Development announced that it would set up a shelter for foreign trafficking victims.

Politics in Malaysia-where approximately 60 percent of the population is Malay/Muslim, 26 percent ethnic Chinese, and 7 percent ethnic Indians-have long been dominated by leaders of the Malay/Muslim community. The constitution grants the Malay special rights, manifested in the NEP’s ethnic quotas on state hiring, contracts, credit, business licensing, corporate employment, and equity ownership. A National Culture Policy has also privileged Malay ethnicity and Islam as the symbols of state and national identity. Over the past decade and a half, the NEP has been replaced by milder programs. But at the UMNO general assembly held in mid-2005, the party’s youth organization demanded that a “New National Agenda” be introduced as a precursor to the program’s full revival, a call duly taken up by the information minister, Abdul Kadir. Ethnic Chinese and Indian leaders have expressed fears that freedoms of communication and assembly could be further constrained to facilitate a stronger imposition of quotas.

At the same time, the requirements of industrialization and changing electoral dynamics have encouraged some new government responsiveness to social minorities. Thus, the government has ceded to the Chinese community greater freedoms in cultural pursuits and education, with the quotas on university admissions that had strongly favored the Malay/Muslim community now officially removed. Further, the country’s National Service Program, which during 2004 drafted some 85,000 17-year-olds, was designed by the government explicitly to encourage deeper community integration, with participants “assigned to camps & according to a complex formula designed to maximize diversity.” In contrast, people with disabilities receive no particular attention, not even in the form of information provided in formats accessible to them. The government does warn periodically, if tepidly, that persons with HIV should not be discriminated against. Malaysia is also one of the few countries in Asia where local funding is made available to advocacy groups. People living with AIDS still complain, however, that they are heavily stigmatized.

While Islam is Malaysia’s official religion, the constitution protects religious freedoms. However, to convert from Islam to another religion requires sanction from the court, which is rarely granted. In addition, the government monitors Islamic activities closely, banning Muslim groups that it labels deviant. In mid-2005, the government deemed 22 sects deviant. It moved most forcefully against Sky Kingdom, a group of some 200 followers of the self-styled spiritualist Ariffin Mohammad (“Ayah Pin”), based in Terengganu. Shortly after Christian groups were invited to Sky Kingdom’s compound for faith-sharing, the Terengganu Islamic Affairs Department demolished the compound’s structures, arrested many followers, and drove Ariffin into hiding.

Followers of Christianity, Hinduism, Buddhism, and Sikhism in Malaysia, while permitted to practice their faiths, are barred from proselytizing among Muslims. They can officially establish their own places of worship, although they often encounter strong bureaucratic obstruction over zoning and building approvals. Otherwise, there appears to be little government interference with minority religions.

The Malaysian constitution guarantees freedom of assembly, though with restrictions “in the interest of security and public order.” Thus, amendments to the Police Act (1967) require that a permit be obtained 14 days before any political meeting is held. Nonetheless, a reasonably well-developed civil society has emerged in Malaysia, at least in urban areas. Trade unions are permitted to form, with the Malaysian Trades Union Congress (MTUC) serving as an umbrella organization. However, only in-house unions can normally be organized in the country’s free-trade zones, where foreign-invested manufacturing facilities geared toward vital exports predominate. Strike actions are tightly regulated and street protests prohibited. Public rallies during electoral campaigns were banned in 1978. The Election Commission announced in 2003 that it would lift the ban, but it still requires organizers to obtain police permits before holding rallies. During electoral campaigning in 2004, the reform was revealed as nearly meaningless, as police rarely granted permits to the opposition. In addition, university students remain barred under the University and University Colleges Act from engaging in any activities that the attorney-general deems political.

Recommendations

  • The Internal Security Act and the Emergency Ordinance should be repealed. The governments should encourage better police work and development of new methods for evidence gathering so that open trial proceedings can be conducted.
  • Political parties should be encouraged to nominate more women candidates, and the secular and Sharia court systems should be encouraged to make rulings that avoid gender discrimination.
  • The government should adopt comprehensive legislation against human trafficking while also instituting a sheltering program.
  • The Police Act and the University and University Colleges Act should be repealed, allowing scope for peaceful social activism.

Rule of Law – 4.01

Malaysia possesses a large judicial apparatus that is sophisticated in its formal appearance and functioning. Appointments of judges have been skewed, however, by constitutional requirements that they be made formally by the king on the advice of the prime minister, triggering criticisms from Suhakam and the Malaysian Bar Council over a lack of fairness and transparency. Such interference has distorted judicial rulings in political cases, especially during Mahathir’s prime ministership. The attorney-general’s chambers, which is not obliged to state publicly its reasons for commencing or terminating cases, appears to be equally dominated by the executive. There is no judicial review of legislation.

However, since Abdullah became prime minister, the judiciary appears to have regained some of the independence that it had enjoyed prior to Mahathir’s tenure. For example, in April 2004, the high court in Shah Alam overturned the conviction of Ezam Nor, leader of the opposition Keadilan (Justice) party’s youth wing. Ezam had been convicted under the OSA of having circulated classified reports about corrupt practices. The high court ruled that the documents had been classified only after Ezam had been charged.

More striking, in August 2004, the federal court overturned the conviction of former Deputy Prime Minister Anwar Ibrahim on sexual misconduct charges. Anwar, after having challenged then-Prime Minister Mahathir at a party meeting in 1998, was purged from the government and charged with corruption and sexual misconduct. Amid controversial proceedings, he was found guilty by the courts and sentenced to a lengthy prison term. The latest federal court ruling, however, found that the testimony against Anwar was not credible, leading to his immediate release. Still, while Anwar was found innocent of sexual misconduct, his conviction for having tried corruptly to conceal this misconduct was left to stand, hence barring him from running for office for a period of five years. Commenting publicly on this outcome, Abdullah denied that any deal with the judiciary had been struck. But the contradiction in logic between these rulings, alongside the clear benefits for Abdullah and UMNO-muting local and international criticisms over unjust treatment, yet blunting Anwar’s political effectiveness-made it difficult to believe that executive approval had not been tacitly granted for the judiciary’s new display of independence.

Two months later, the high court in Penang issued yet another ruling favorable to Keadilan. In the general election, Anwar’s wife, Wan Azizah, had been the only Keadilan candidate reelected to parliament. The UMNO candidate against whom she had run petitioned the courts for a recount. Opposition leaders anticipated that this petition would be successful, and they prepared for a by-election that they feared they would lose. But the high court found the allegations baseless, thereby affirming Wan Azizah’s place in parliament.

In ordinary criminal cases, citizens in Malaysia receive a reasonably fair and public hearing by an independent and impartial tribunal established by law, and prosecutors are independent of political control. An assumption of innocence prevails. Indigent suspects can qualify for free legal aid through the Legal Aid Center, operated by the Malaysian Bar Council, or through the initiatives of individual lawyers. Through the Legal Aid Bureau the government also provides assistance for civil cases. However, as noted above, before suspects appear in court, they are often interrogated harshly by police, with forced confessions and deaths occurring in custody. Before Abdullah became prime minister, very few high-level officials were prosecuted for wrongdoing unless they had fallen from favor.

The security forces of Malaysia, in contrast to many of their counterparts in the region, are fully subject to civilian control. However, the executive has regularly deployed police agencies for political purposes, with the Special Branch, Federal Reserve Unit, and Police Field Force gathering information on dissidents and suppressing opposition activities. As in previous years, family members of ISA detainees who mounted protest actions during 2004-2005 reported that they were systematically harassed and threatened by Special Branch agents.

The sundry ethnic quotas imposed through the NEP and successor programs (see “Civil Liberties”) raise questions about equal treatment and respect for property rights. Thus, while Malaysia’s economy is in important ways market-based, state interventions force redistribution according to ethnicity, especially in connection with equity ownership. For example, firms owned by non-Malays have been required by law to allocate 30 percent of their equity to Malay recipients, usually at discounted rates, lest their operating licenses be withdrawn. Accordingly, the country’s minority Chinese and Indian communities, confronted also by the government’s Islamization policies, lament their second-class citizenship. This inequity does not carry over, however, into ordinary judicial proceedings. To be sure, the judiciary is made up mainly of ethnic Malays, while lawyers are mostly Chinese and Indian. But rulings in most criminal and civil cases are handed down without regard for ethnic or religious affiliation. In contrast, by UN standards the country’s Sharia courts discriminate unfairly against women over matters of family law and inheritance (see “Civil Liberties”).

The land rights of indigenous non-Malay groups remain for the most part unprotected in areas targeted for development. Clashes have occurred between indigenous groups and logging interests over land use, especially in East Malaysia. In 2005, Iban communities in Sarawak protested against logging in areas that had been recognized as “native customary rights land.” But as the logging had been licensed by the state forestry department, the protest leader, village chief Ajan Wen, was threatened with arrest. Similar disputes over logging on customary lands and in national parks led to lawsuits and appeals to Suhakam throughout 2004-2005.

On the other hand, in September 2005, the court of appeal upheld a high court decision in a case first brought by seven Orang Asli (indigenous persons) a decade earlier against the government and a well-connected construction company. Lands belonging to the Orang Asli had been seized for construction of the Nilai-Banting highway, with minimal compensation. The high court determined that the Orang Asli held native title under common law and that they should be paid compensation and damages.

Recommendations

  • The independence of the judiciary should be fully recognized by the executive. The executive should refrain from openly criticizing judges and the Bar Council as well as making statements about cases before rulings have been made.
  • Judicial appointments should be made with greater transparency and independence. To this end, a judicial services commission should be set up to make recommendations about appointments. Appointments at the federal court level should also be approved by parliament.
  • The attorney-general’s chambers should strengthen its independence from the executive by declaring publicly the criteria by which it institutes, conducts, or discontinues hearings.

Anticorruption and Transparency – 2.87

The role of the state bureaucracy in affirmative action and business expansion help account for the substantial corruption in Malaysia. As resources are often politically allocated rather than driven by the needs of the market, a nexus has emerged between government and business that has systematically bred conflicts of interest.

In 2003, Abdullah Badawi called for “people power” as a means to oppose corrupt practices. After he became prime minister and preparations began for the general election in 2004, a number of sitting UMNO parliamentarians and state assemblymen suspected of corruption were denied renomination. A month later, Abdullah led a two-day ethics seminar for the government’s 198 members of parliament (MPs), then presented a new code of ethics that stressed professional norms and honesty. He also announced that henceforth, MPs would have to declare their assets in full. The rigorously specified terms of disclosure required that MPs list their corporate interests, the types of business activities in which they were involved, and the value of their investments. These terms extended also to family members and any other persons who might function as trustees or proxies. A deadline of May 31, 2004, was imposed.

In extending his drive against corruption from UMNO to the bureaucracy, Abdullah formed the Malaysian Institute of Public Ethics, backed by a National Integrity Plan in 2004. He ordered that spot checks be carried out in targeted government departments, namely immigration and customs, transport, land registration offices, and the police force. Indeed, with the police “suffer[ing] an ‘image crisis,’ due to corruption, brutality, and poor service,” Abdullah ordered a formal review of the police force. To this end, he set up the Special Commission to Enhance the Operations and Management of the Royal Malaysian Police. This commission was led by a former federal court chief justice, Mohamed Dzaiddin Abdullah, widely regarded as realistic but reformist. Among its members were several lawyers and NGO activists (including Tunku Abdul Aziz, then head of Malaysia’s Transparency International chapter) and a range of former high-level political, corporate, and police figures. Six months later the commission delivered an interim report whose findings were unexpectedly critical and, contrary to earlier government pronouncements, publicly disclosed. Final recommendations were to be made at the end of 2005; however, by the end of November, there was no indication that the police had begun to act seriously on the interim report.

The main body through which the government seeks to investigate corrupt practices is the Anti-Corruption Agency (ACA). The ACA appears to possess significant capacity for investigation, and it operates a website where informants can report instances of corruption anonymously. As mentioned above, prior to Abdullah’s gaining power, corruption was not rigorously prosecuted. Shortly after he became prime minister, however, several notables were committed to trial for corruption. The minister for land cooperative development, Kasitah Gaddam, was arrested in early 2004, allegedly for having been involved in an illegal sale of shares in a state-owned enterprise. Eric Chia, a former managing director of the state-owned steel company, was also arrested, allegedly for having approved an illicit payment to a Japanese partner. Shaharin Shaharudin, a former chief executive of a state investment company, Pernas (Perbadan Nasional), was charged with illicit dealings. Furthermore, in mid-2005, UMNO’s disciplinary board purged the party of some top officials against whom claims of having engaged in money politics (i.e., vote-buying) at the previous year’s general assembly were found to have been substantiated. Surprisingly, UMNO’s topmost vice-president, Isa Samad, was suspended, resulting in his removal as minister of federal territories.

However, after the government won a landslide in the March 2004 general election, its drive against corrupt practices began to wane. Although public attention focused intently on four allegedly corrupt ministers, Abdullah did little to shake up his cabinet, leaving two of these ministers in their posts, while the remaining pair was merely shifted to other portfolios. Nazri Aziz was viewed as most vulnerable to dismissal; while minister of entrepreneur development, he had undergone much-publicized questioning by the ACA over his issuance of taxi licenses. However, after the election he was transferred to the Prime Minister’s Department, whose capacity Abdullah had expanded from four to six ministers. Indeed, the proportion of ministers, deputy ministers, and parliamentary secretaries swelled to nearly one-third of the government’s ranks of parliamentarians, thus procuring overall “a strong sense of continuity from a prime minister who had appeared bent on differentiating his administration from Mahathir’s.” At the same time, in Malaysia’s universities, procedures for appointment, promotion, and removal grew highly politicized, leading to forced resignations and termination of contracts.

The code of ethics that Abdullah had earlier introduced for members of the governing coalition was only laxly administered, requiring that MPs make self-assessments, then electronically submit their “report cards” on a quarterly basis. Further, their asset declarations were not disclosed publicly, while the penalties for failing to make them at all were left unclear. The May deadline was thus roundly ignored, prompting Abdullah to offer an extension. In addition, under Abdullah victims of corruption were given no additional mechanisms through which to seek redress.

Malaysia received a score of 5.0 in Transparency International’s 2004 Corruption Perceptions Index, in which 10 represents the least corrupt. This constituted an overall drop from the previous year’s score of 5.2. Similarly, a World Bank study portrayed Malaysia as trending steadily downward in five areas of governance between 1998 and 2004, improving during the last two years only in terms of political stability. Nonetheless, the Malaysian public seemed untroubled. A survey conducted by Merdeka Centre for Opinion Research in mid-2004 revealed the “overall concern for corruption in the public sector had subsided since the March general election.”

In terms of institutional safeguards for transparency, Malaysia has an auditor-general’s office and a public complaints bureau. But like the ACA, these agencies are neither effective nor nonpartisan. A parliamentary public accounts committee also exists, and, under the chairmanship of an independent-minded government MP and his opposition deputy, it has succeeded lately in contributing meaningfully to public debate. The Malaysian Integrity Institute (IIM) has been tasked with assisting the ACA while implementing the National Integrity Plan. To this end, it has recently partnered with the United Nations Development Program. However, it is too soon to evaluate the IIM’s effectiveness in exposing bureaucratic corruption. A recently introduced system of parliamentary select committees remains rudimentary.

As nearly all mainstream newspapers and television stations are either owned by the government or aligned with it, they undertake little independent investigation. Whistle-blowers, anticorruption activists, and investigators who seek to present government documents as evidence of corruption risk severe penalties under the OSA. Attempts by opposition politicians to meet with top officers in such agencies as the ACA are usually rebuffed. Most of the government’s many websites offer little substantive information, and there is no freedom of information act.

Nonetheless, Abdullah has tried intermittently to increase the transparency of some government decision making, even if institutions remain weak. First, seeking to reduce the deal-making between government and business, he cancelled several large infrastructure projects, most famously an electrified double-track railway that was to have run the length of peninsular Malaysia’s west coast. He also scaled back plans for a new customs facility and elevated bridge link between Malaysia’s southern state of Johor and Singapore, the folly of which had been ensured by Singapore’s withdrawal from the project. On the other hand, although Abdullah ordered a review of the massive Bakun Dam hydroelectric project in Sarawak, the project continues unabated. And while he has advised that any additional government contracts will be awarded not through opaque and personal dealings but instead through open-tender bidding, there was little indication of improvement by November 2005.

In another positive step, many of the Malay entrepreneurs whose interests had been favored by the government during boom times, only to be brought low by the currency crisis, were finally forced to relinquish their holdings. Their assets were mostly acquired by the government’s investment vehicle, Khazanah Nasional. Although analysts typically dismiss increases in state ownership as worsening distortions, in the Malaysian context of highly politicized privatization these transfers promised to raise transparency and share prices. Efficiencies also accrued when other vehicles such as Ministry of Finance Inc. sold the equity stakes that they held either to Khazanah, to the state-owned petroleum company (Petronas), or to the national superannuation scheme (the Employees’ Provident Fund). At the same time, in order to further bolster Khazanah and key government-linked corporations such as Telekoms Malaysia and Tenaga Nasional, the national power utility, new cohorts of professionally trained Malays and even foreign executives were recruited as corporate leaders.

Most dramatically, a furor erupted over the distribution by the ministry of international trade and industry of import licenses for automobiles. Known locally as “approved permits” (APs), these licenses were initially introduced in 1970 as a way for Malay businesspeople to get a footing in the automobile industry, which was dominated locally by Chinese. However, after Mahathir, upon his retirement as prime minister, was appointed as an advisor to the national car company, Proton, he denounced the AP system as undercutting the company’s competitiveness. Opposition leaders took up the cry, demanding that the system be made transparent. The government responded by reversing its long-standing policy of not revealing the names of recipients, publishing lists of persons who together had been awarded more than 67,000 APs.

The government’s commitment to effective macroeconomic management remains strong, with the budget-making process taken seriously. The budgets proposed during Abdullah’s tenure have been widely assessed as prudent, targeting the deficits that had mounted during Mahathir’s last years in office. To this end, Abdullah also bolstered the state’s extractive capacity, with Inland Revenue raiding 10 of the country’s largest construction firms over tax evasion during his first year in office.

Just as the government’s fight against corruption fluctuated during this period, so did its commitments to transparency. The budget’s great length and complexity are beyond the capacity of an underresourced opposition to oversee properly. In addition, significant amounts of government revenue and expenditure remain offbudget. For example, Petronas, the national petroleum company, is housed within the Prime Minister’s Department, leaving it almost entirely unaccountable to parliament. The government thus remains quite silent on many of its expenditures, while disclosing many others in an impenetrable aggregate form.

After the 2004 general election, some of the state contracts that had been placed under review were quietly restored, with Abdullah insisting that the government was bound by the letters of intent that his predecessor had signed. Indeed, some of Abdullah’s own family members appear to have benefited from these contracts. Attention focused on the dealings of his brother, Ibrahim Badawi, whose company, Gubahan Saujana, won deals with a catering subsidiary of Malaysia Airlines. Through an opaque privatization process, Gubahan Saujana secured a revenue guarantee of 80 percent over a nine-year period.

Analysts also observed the meteoric rise of a newly listed oil and gas company, Scomi Group, in which Abdullah’s son Kamaluddin held a majority interest. When the government announced plans to develop smaller oil fields, expectations mounted that Scomi would be the chief beneficiary of state contracts, driving up the firm’s share price by an incredible 588 percent over its listing price four months earlier. A company subsidiary, Scomi Precision Engineering, was also cleared hastily in early 2004 by the Foreign Ministry and police after becoming embroiled in a scandal for exporting centrifuge parts to Libya, allegedly through a black market in nuclear equipment. In the view of Wan Azizah Wan Hamzah, wife of Anwar Ibrahim and president of Keadilan, such “abus[e] [of] diplomatic machinery and resources to defend a private company owned by the son of the prime minister is clear poof of how cronyism and nepotism [have] been shamefully institutionalized & in Malaysia.”

Recommendations

  • Malaysia’s anticorruption agency should be removed from the Prime Minister’s Department, leaving it freer to investigate cases of corruption in nonpartisan ways. The Integrity Management Committee should be given enforcement powers.
  • Officials and politicians should be made to declare their assets publicly, and government contracts should be awarded through open bidding.
  • Whistle-blowers should not be threatened with prosecution under the OSA or other laws.
  • The recommendations of the Special Commission to Enhance the Operations and Management of the Royal Malaysian Police contained in the mid-term report should be adopted in full.
  • The revenues and expenditures of Petronas and other government-linked corporations and agencies operating with off-budget accounts should be specified in the federal budget and scrutinized by parliament.

Author

William Case is Associate Professor in the Department of International Business and Asian Studies, Griffith University, Australia. He has held teaching or visiting research positions at the University of Malaya, National University of Malaysia, MARA University of Technology in Shah Alam, Malaysia, the Centre for Strategic and International Studies in Jakarta, and the Institute of Asian Studies at Chulalongkorn University in Bangkok. His most recent book is Politics in Southeast Asia: Democracy or Less.

Notes

  1. See Mavis Putucheary and Noraini Othman, eds., Elections and Democracy in Malaysia (Bangi, Malaysia: Penerbit UKM, 2005).
  2. Lim Hong Hai, “New Rules and Constituencies for New Challenges?” Aliran Monthly, n.d., http://www.aliran.com/monthly/2003/6j (accessed 28 August 2003).
  3. Beh Lih Yi, “Separation of Powers Too ‘Idealistic,’ Says Nazri,” Malaysiakini, 3 June 2004.
  4. See Assessment of the National Human Rights Commission (Suhakam) (Kuala Lumpur: Suara Rakyat Malaysia [Suaram], April 2002), http://www.Suaram.org/suHakam-evaluation-2002.htm.
  5. “Civil and Political Rights Including the Question of: Freedom of Expression; . . . Report on the Mission to Malaysia” (New York: UN Economic and Social Council, Commission on Human Rights, 23 December 1998), http://www.hri.ca/fortherecord1999/documentation/commission/e-cn4-1999-64-add1.htm.
  6. Pauline Puah, “M’sia Approves Permit for Chinese Communist Party Organ,” Malaysiakini, 10 January 2005, http://www.malaysiakini.com/news/32720.
  7. Beh Lih Yi, “Suhakam: ISA Detentions Increased Last Year,” Malaysiakini, 20 June 2005, http://www.malaysiakini.com/news/37147.
  8. “Pak Lah: Tough Laws Needed to Preserve Racial Ties,” Malaysiakini, 19 April 2004.
  9. “Siti Norma, First Woman in Top Judicial Post,” Malaysiakini, 9 February 2005, http://www.malaysiakini.com/news/33516.
  10. Quoted in Tony Thien, “Federal Court Reasoning Described as ‘Archaic,'” Malaysiakini, 30 May 2005, http://www.malaysiakini.com/news/36535.
  11. “Malaysia Detains Officials on Human Trafficking Allegations,” Agence France Presse, 12 February 2005, http://www.channelnewsasia.com/stories/afp_asiapacific/view/132194/1/.html.
  12. “Forging a Nation,” The Economist, 21 October 2004, web edition, http://www.economist.com/displayStory.cfm?story_id=3321010.
  13. “Malaysia: Protect Freedom of Belief for Sky Kingdom” (New York Human Rights Watch [HRW], 21 July 2005), http://hrw.org/english/docs/2005/07/21/malays11397_txt.htm.
  14. Arfa’eza A Aziz, “‘Classified’ Documents in Doubt: Ezam Freed,” Malaysiakini, 17 April 2004, http://www.malaysiakini.com/news/2004041500115153.php.
  15. See William Case, “The Anwar Trial and its Wider Implications,” in Colin Barlow and Francis Loh Kok Wah, eds., Malaysian Economics and Politics in the New Century (Cheltenham, UK: Edward Elgar, 2003), 119-31.
  16. S. Jayasankaran, “A Leader Returns,” Far Eastern Economic Review, 16 September 2004, 12-13.
  17. Beh Lih Yi, “Wan Azizah Keeps PKR’s Sole Seat,” Malaysikini, 28 October 2004.
  18. International Commission of Jurists Legal Resource Center, “Malaysia-International Legal Community Denounces Government Interference in the Rule of Law in Malaysia,” 5 April 2005, http://www.icj.org/news.php3?id_article=2521&lang=en.
  19. Harold Crouch, Government and Society in Malaysia (Ithaca: Cornell University Press, 1996), 137.
  20. Tony Thien, “Longhouse Folks See Red Over Logging,” Malaysiakini, 18 July 2005, http://www.malaysiakini.com/news/37977.
  21. Colin Nicholas, “Orang Asli Land Rights Upheld,” Aliran Monthly 25, no. 8 (2005), http://www.aliran.com/monthly/2005b/8e.html.
  22. Lim Kit Siang, media statement (Selangor, Malaysia: Democratic Action Party [DAP], 8 August 2003), http://dapmalaysia.org/english/lks/aug03/lks2505.html.
  23. Claudia Theophilus, “PM: Asset Declaration Includes Immediate, Extended Families,” Malaysiakini, 19 April 2004, http://www.malaysiakini.com/news/2004041900115212.php.
  24. Kimina Lyall, “PM’s Graft War Right on Money,” The Weekend Australian, 14-15 February 2004, 12.
  25. Leslie Lopez, “He’s No Mahathir, and That’s OK,” Far Eastern Economic Review, 25 December 2003-1 January 2004, 13.
  26. “Ex-CJ Dzaiddin to Head Royal Police Commission,” Malaysiakini, 4 February 2004, http://www.malaysiakini.com/new/2004020400113898.php.
  27. S. Jayasankaran, “Not So Fast,” Far Eastern Economic Review, 8 April 2004, 20.
  28. “Malaysia PM Faithful to Old Guard in New Cabinet,” New York Times on-line edition/Reuters, 27 March 2004, http://www.nytimes.com/reuters/international/international-malaysia-cabinet-html.
  29. “Asset Declaration: Extension, Not Exemption,” Malaysiakini, 4 June 2004, http://www.malaysiakini.com/news/2004060400115900.php.
  30. Corruption Perceptions Index (Berlin: Transparency International [TI]), http://www.infoplease.com/ipa/A0781359.html.
  31. Claudia Theophilus, “Malaysia’s Governance Standards Drop,” Malaysiakini, 11 May 2005, http://www.malaysiakini.com/print.php?id=36047.
  32. Pauline Puah, “Graft-riddled image of Gov’t Persists, Shows Survey,” Malaysiakini, 17 September 2004, http://www.malaysiakini.com/news/30125.
  33. “Aluminium Intrigue,” The Edge, 19 December 2005, 70-74.
  34. “Not Yet Out of Mahathir’s Shadow,” The Economist, 31 January 2004, 25.
  35. “The Malay Way of Business Change,” The Economist, 20 August 2005, 46.
  36. S. Jayasankaran, “Behind the Politics, A Pressing Deficit,” Far Eastern Economic Review, 4 March 2004, 14-15.
  37. “Young Professionals to Head Two Top Utility Firms in Revamp,” Malaysiakini, 20 May 2004, http://www.malaysiakini.com/news/200405200015653.php.
  38. “Govt Confident It Can Rein in Budget Deficit,” Malaysiakini, 12 September 2005, http://www.malaysiakini.com/news/40286.
  39. Michael Vatikiotis and S. Jayasankaran, “Softly, Softly Go Reforms,” Far Eastern Economic Review, 3 June 2004, 23.
  40. “Pak Lah faces question for ‘Meteoric Rise’ of Son’s Company,” Malaysiakini, 20 September 2003, http://www.malaysiakini.com/news/2003092000112211.php.
  41. Ibid.
  42. “Bush: M’sia Says Scope No Longer Makes Centrifuge Parts,” Malaysiakini, 12 February 2004, http://www.malaysiakini.com/news/2004021200114019.php.
  43. “Malaysian Opposition Accuses Prime Minister of Nepotism,” Los Angeles Times, 24 February 2004.

Source: http://www.freedomhouse.org/modules/publications/ccr/modPrintVersion.cfm?edition=7&ccrpage=31&ccrcountry=134

Thursday, August 24, 2006 - Posted by | Commentary

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