INSTITUTIONAL reforms are what will turn Malaysia into a high-income nation, said an economist, as it reduces corruption and ensures that public resources are used properly to boost growth and living standards.

Dr Muhammed Abdul Khalid, who is also economic adviser to the prime minister, said such changes, which are being pursued by Pakatan Harapan, will have a long-term, positive impact on the economy.

The reforms include complex initiatives, such as separating the three branches of government – Parliament, judiciary, the executive – to technical ones like making open tenders the norm in government contracts.

“What separates high-income countries and the rest is the institutions. To give credit to this government, for the past year, they have been focusing on institutional reforms,” Muhammed told The Malaysian Insight.

“These reforms are highly important. In this respect, I think the government got it right in their focus in the past one year on governance, integrity and ending corruption.

“No doubt that they have been trying to improve the people’s well-being, but their top-most priority on institutional reforms was right and it is these reforms that will ensure that growth is inclusive and sustainable”

Since taking power in May last year, PH has focused on strengthening the independence of key institutions so as to increase their ability to check and balance each other.

These reforms are to curb the executive branch, which contains the cabinet, from abusing their powers – the main reason behind the 1Malaysian Development Bhd scandal and the string of corruption cases involving Barisan Nasional leaders.  

Muhammed elaborated on the importance of some of these reforms and why they are critical, such as in public sector administration, public procurement, the judiciary, law enforcement and corporate governance.

There have been improvements to separating the powers of the three branches of government – the legislature, executive and judiciary – and to free them from political influence, he said.

“The power of the executive, for instance, has been severely clipped. The appointments to key positions in the Malaysian Anti-Corruption Commission, Election Commission, Human Rights Commission and the Judicial Services Commission have to now go through Parliament.”

The administration has also started to impose new rules for government contracts.

“Now almost 100% of new contracts are through open tenders as opposed to only 30% prior to May 9, 2018. Also letters of recommendation from ministers will no longer be entertained.”

A law is being drafted to ensure that only genuine Bumiputera businessmen can receive contracts directed for this group, Muhammed said.  

The draft law will criminalise Bumiputeras who sell off their contracts while those who bid for them will also need to show the beneficiary ownership of their companies.

Muhammed said starting next June, corruption charges will be widened to include not just the person who offers and the recipient, but the individual’s company.

“Starting June next year, if someone from a private company tries to bribe a government officer, not only will that officer go to jail with the perpetrator, the perpetrator’s company will also get into trouble and its director can also be charged.” – October 25, 2019.