THE overall objective of the National Integrity Plan (NIP) is to fulfil the fourth challenge of Vision 2020, which is “to establish a fully moral and ethical society whose citizens are strong in religious and spiritual values and imbued with the highest ethical standards.”
The NIP identified for the first five years (2004 – 2008) the following five targets known as Target 2008 to achieve the above stated objective:
• Effective reduction of corruption, malpractices and abuse of power;
• Increasing efficiency of the public delivery system and overcoming bureaucratic red-tape;
• Enhancing corporate governance and business ethics;
• ·Strengthening the family institution; and
• Improving the quality of life and people’s well-being.
The main obstacle to the achievement of the NIP Target 2008 appears to be the perception that the public sector and the elected and appointed representatives are corrupt and inefficient.
International rankings such as Transparency International’s Corruption Perception Index confirm this affecting Malaysia negatively.
Transparency is an essential precondition for containing corruption, as it renders abuse difficult and increases the likelihood of detection.
Most importantly, through transparency, accountability and economic efficiency is raised. When processes are transparent, lawmakers, regulators and civil servants are made to be accountable for their decisions.
Some compelling trends in Malaysia call for an immediate implementation of transparency as a core principle. Privatisation programmes and Government procurement in Malaysia are conducted through non-transparent processes. Only notifications of tenders are made public.
The criteria for selection and the selection process are secretive. There is also no avenue for arbitration. A greater cause for concern is the fact that concessions agreements are considered “official secrets”.
Compounded with a non-transparent selection process, the concession agreements and Government procurement lead to sub-optimal outcomes from a public policy standpoint. This has also led to allegations of corruption.
For example, the outsourcing of health support services from the public sector to three monopolies has raised the estimated expenditure of the Health Ministry for these services to RM750mil in 2005 from RM220mil in 1994.
The privatisation of water services in Johor, Selangor, Kuala Lumpur and Putrajaya has seen the water tariffs increased at higher rates compared with states where water utilities are managed and operated by the public sector.
The Public Works Department is under siege for the multi-billion ringgit fiascos involving the MRR2, the Matrade Building and the Navy Recruit Training Centre.
The recent upward revision of toll rates in the Klang Valley based on clauses in the concession agreement and not on cost considerations has angered the public. All these contracts were tendered and approved through non–transparent processes.
Malaysia recently achieved top position in a pilot project Reports of the Observance of Standards and Codes (ROSCs) initiated by the IMF/World Bank.
This indicates good governance in the financial sector as the project surveys the adherence to international standards of the domestic financial sector.
The underlying philosophy of the ROSCs is the importance of international standards in enhancing transparency, which in turn strengthens the international financial architecture by identifying weaknesses and fostering market efficiency and discipline that ultimately contribute to a more robust financial system.
At the national level, these international standards provide a benchmark that can help identify vulnerabilities and guides policy reform.
The Water Services Industry Bill passed in 2006 is also a step in the right direction as it includes provisions to ensure full transparency. So too are the publicly known benchmarks for GLCs.
Limiting the use of the Official Secrets Act for matters relating only to national security, defence and international relations, is also an important step in strengthening the institutional framework for an efficient market economy.
The Government can hasten the achievement of the NIP Target 2008 through a single stroke of implementing transparency as a core principle at all levels of Government.
Together with transparent privatisation and Government procurement processes that include civil society participation, transparent, clear and defendable criteria, and making all documentation from these processes publicly available and accessible, will enable Malaysia to conform to international standards and enjoy all the attending benefits.
This article was first published by the Malaysian Institute of Economic Research.