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The moving finger, having writ, moves on ...

THE PRIME MINISTER, DATO' SERI Abdullah Ahmad Badawi, warns the civil service not to be corrupt; the deputy prime minister, Dato' Seri Najib Tun Razak, requires Malaysian politicians only to sing the government's praises when overseas; the deputy finance minister, Tengku Putera Tengku Awang, admits UMNO-controlled National Front (BN) states have mismanaged their states so badly that they cannot survive without federal help. A Petronas transfer of RM25 billion to the federal coffers, we are told, is proof all is well, but that its reserves have been depleted by the government's use of it as a private bank for the hundreds of billions which Putra Jaya and other official extravagances cost. But the government continues to insist its treasury is so flush with cash that tens of billions are set aside for arms purchases and other pump priming projects for no reason than to assure us all that this country is run well.

There is only one small problem with this upbeat view of the Malaysian economy. All one can say in defence of the government is to paraphrase Tengku Putera's comment on the fiscal irresponsibility of the Malaysian states: it will "not go bankrupt" as it has "a lot of assets". Money is spent without checks or balances, on the whim and fancy of the government. Parliament has no say. The cabinet, which has, is there to approve whatever is put before them. There is no accountability. Profligacy, when unchecked, leads to ruin, as Tengku Putera rightly points out in his criticism of the seven Malay states owing more than RM2 billion to the federal treasury. When it cannot pay its bills, it dips into the reserves of government agencies to pay them. The deputy finance minister's strictures apply as well to the federal government. And when it cannot handle its own finances, how it could others?

Fiscal policy is controlled by the the prime minister's department and often out of step with the Treasury and no co-ordination. The two offices have become centres of political power, and therefore controlled by Pak Lah as prime minister. He exerts control by grabbing all the decision making powers of the two ministries and more, but lets weak deputies – ministers and others – to take the unpalatable decisions, or not decide at all. If this twin problems are not bad enough, there is another: Bank Negara Malaysia, the central bank. But all three head for rigor mortis, cannot make up their minds, rush in only when a crisis is at hand, paper over the cracks, and disappear into the woodwork.

BN politics is centralised in its leader: all decisions are taken in his name, the central committees reflect his views, with those who disagree driven out in disgrace. Politics is of personalities: the only major issue in them is the perenniel squabble between leader and leader-to-be, the latter sidelined if he gets to be too uppity; his men left in the lurch, as he in the end is; their general assemblies are ignored like parliament; and this goes all the way up to the government, cabinet and parliament. It is not only in finance and politics: it is in every branch of government. The privatisation of government enterprises is a failure, costing the government hundreds of billions of ringgit. Not one privatisation succeeded, bleeding the government of billions a year. No one talks of it, but the concessionaires, in almost every instance, has cashed in and ran, leaving the government responsible for its debts.

What privatisation wrought is a deliberate destruction of how the government is run, blurring the distinction between propriety and greed, the cordon sanitaire between the two blurred to a point where civil servants became both corrupted and corrupters as they made common cause with their colleagues who jumped into business with government blessings and learnt the art of high living without an understanding of commerce and business. It was political patronage all the way. It worked in the short term. But it could not last. As this growth was fed on the privatisation of government assets, their failure added to the fiscal debts. It was kept hidden for Malaysia was in boom times, and it could be. It cannot now. Times are tight. The government is caught and it does not know what to do.

Let us take the North-South highway. Nature and unusually high rains are blamed for the landslides and landslips. But these were known when the highway were built; why was no notice taken of it then? The government and concessionaire must be held to blame? The Middle Ring Road II collapse in Kepong is shoddy construction and faulty design. The proof of the pudding is in the eating. The highway collapsed when it should not. The problem lies elsewhere: the selection of contractors and consultants are based not on competence but on a preferential political list maintained by the finance minister, which apportions jobs on its criteria, which has little to do with competence or reliability, and often without reference to, or against the advice of, the works ministry or other competent bodies.

The highway road tunnel at Jalapang, outside Ipoh, is badly damaged, with cracks repeatedly papered over repeatedly, but is now so serious that senior officials fear of its collapse. The highway authorities would not close it for the terrific traffic jams it would cause, but if nothing is done soon, a disaster would undoubtedly follow. Officially, silence rules. No one would highlight it, for it would reveal the shoddiness and greed in the poorly constructed North South highway at terribly inflated costs and poor supervision. I dare say that this is the norm in government. Take any project, scratch it and it falls to ground: schools built so shoddily it cannot be occupied; military installations so shoddy that it has to be rebuilt from scratch; projects abandoned after billions of ringgit spent; the litany is endless. Yet amidst this, fresh projects worth billions of ringgit are announced, not for its utility but to give the impression that all is well.

When the federal government conducts its affairs so shoddily, could the states be far behind? When the UMNO-led BN in Kuala Lumpur cannot control its profligacy, how could it in the states in its watch? Especially when profligacy is encouraged of its leaders. It could not restrain the states for fear of a leadership backlash. The BN had kept the states on a tight leash, usually by make them beg for what is due, ignored local sensitivities, often forced on the state unacceptable mentris besar. Rebellion was dealt with severely. In the centre, the former deputy prime minister, Dato' Seri Anwar Ibrahim was cut down to size; in the states, the former mentri besar of Selangor, Dato' Harun Idris, was jailed for his political insolence.

But as the BN's central control declined, the state leaders became, in effect, warlords, to hold the centre to ransom. That became pronounced after the federal authorities refused to hand over to Trengganu its oil royalties from Petronas for oil mined off its shores. It was stopped for no reason than the state was then run by the opposition PAS. That struck a sympathetic chord in all the Malay states, and in Sabah and Sarawak, where the renewed desire for control of its resources came with the fear that a strong centre might take back its oil royalties. It shakes the foundations of the Malaysian federation to its core. That they reacted to this stupidly is no reason to think all is well: The Johore mentri besar and Sabah chief minister both denied their states were bankrupt. Their explanations do not matter. The centre's response to this open challenge is awaited. But would there be one?

M.G.G. Pillai
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