A response to Nazir Razak on corruption

ORDINARY Malaysians do not need to be lectured on the importance of controlling corruption and countering its devastating impact on the country.

Ordinary Malaysians know that to have any hope of a truly prosperous and secure future for the country and themselves, the government needs to deal with corruption. And the people have been clamouring for it for the last decade or so but nothing has changed.

The rakyat want the government to deal with this problem, every bit as much as they want the government to tackle issues like poverty, housing, transport and rising prices.

The people want the law to be upheld and the corrupt to be punished, with justice and recompense for those who have suffered.

Unfortunately, national efforts to this end have often been weak or absent.

Anti-corruption and good governance have become an often-repeated slogan.

If the government continues to hide from this problem, the country will never ever break out of the slide into obscurity that we are facing now.

There is so much hesitation in raising this issue in the country.

For too long it seems to be taboo for politicians and civil servants to speak up on corruption.

For too long it has just been too easy for those in authority to ignore or pretend not to know what is going on.

As you can see, when the country fights the corruption scourge, it fights back, with great ferocity.

It obviously has greater resources than the authorities.

Those accused view it as a matter of life and death.

Many of the most common forms of corruption in the country now revolve around the government’s ability to create artificial scarcities through licensing or regulation. The decision for the National Farmers Organisation and Angkatan Koperasi Kebangsaan Malaysia Bhd to go into poultry and corn farming, with the aim of producing 174 million birds a year to address the chicken shortage crisis is one clear and recent example.

Placing tariffs on imports restricts imports and generates rents for the government. And this resulted in a mushrooming of corruption among enforcement agencies, which is quite common globally.

As we are well aware, corruption in the country holds us back from growing, costs the country billions, traps the poorest in the most desperate poverty as corrupt politicians siphon off funds and prevent hardworking people from getting the revenues and benefits of growth that are rightfully theirs. It steals vital resources from our schools and hospitals as corrupt individuals and companies evade the taxes they owe.

When 129 jurisdictions commit to implementing the international standard for exchange of tax information on request and 95 jurisdictions committed to implementing the new global common reporting standard on tax transparency, there was much hope that the level of corruption would be reduced substantially.

Domestically, section 56 of the Companies Act 2016 on beneficial ownership – who really owns and controls companies – was introduced.

Yet, instead of putting a dent on the multitude and scale of corruption in the country with both measures, corruption continues unabated and is now a runaway train.

All politicians regardless of their affiliations know about the scale and extent of the problem but claim the moral high ground when it comes to this issue. Frankness and true political leadership are sorely missing.

Without that leadership, many of the rules, institutions and mechanisms to address corruption never actually bite.

There is realisation that something must be done about corruption but far less agreement about how to effectively correct the situation. There were high hopes when the Malaysian Anti-Corruption Commission (MACC) was set up in January 2009, replacing its predecessor the Anti-Corruption Agency, but many are now questioning their value.

There is a complete lack of political will to strengthen the MACC and to faithfully enforce the laws. Laws are ignored with impunity and procurements made with a complete disregard for due process.

In the last few years, politicians talked about promoting a culture that makes it close to impossible for the corrupt to prosper or escape detection. But changing culture will take a long time and cannot be achieved within one generation.

Indonesia, which once ranked far below us in the corruption index, is now ahead of us. One example is an initiative, which their finance minister partnered with businesses to create “new rules of the game” where the government delivered a streamlined customs approval process in exchange for a commitment from business not to offer any bribes to officials.

In Singapore, instead of prosecutors having to prove the guilt of the corrupt, they reversed the burden of proof so the accused have to show that they acquired their wealth legally. The Prevention of Corruption Act also provides for extra-territorial jurisdiction, so that the actions of Singaporeans overseas are treated in the same way as actions committed in Singapore, regardless of whether the corrupt acts had consequences in Singapore itself.

What Indonesia and Singapore have done, are low-hanging fruits our country can easily embrace and emulate domestically.

Given the sheer quantity of data to get through, law enforcement should actively work with networks of civil society groups, activists and journalists to hold those people to account. Harness the power of new technologies and from the citizen to deliver greater accountability for public money and services. Transparency is the natural enemy of corrupt officials and politicians.

Patronage in the political system has led to the creation and extraction of rents into everyday things in the country. A patronage relationship is a reciprocal exchange of favours between two individuals of different status and power, usually involving favours given by the patron to the client in exchange for the client’s loyalty and political support.

In economics, a rent is technically defined as the difference between the cost of keeping a good or service in production and its price.

Rent creation and distribution and the ease with which the government can create either through taxation or its regulatory powers, is now virtually synonymous with corruption in this country.

And this ability to generate rents by politicians and the government has led to many ambitious people choosing politics rather than entrepreneurship or the private sector as a route to wealth.

Dealing properly and comprehensively with the corruption exposed by the public means the government has to actively enforce anti-corruption laws and bring the perpetrators to justice by hunting down the corrupt, prosecuting them and sending them to jail.

But all of this will only really work if political leaders have the courage to stand together, to speak up where previously there was silence and to demand the strengthening and coordinating of institutions that are fighting corruption at the top of the agenda, where it belongs.

We cannot and must not fail this test of political leadership. – June 20, 2022.

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.

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