Since winning the historic May 9 election, Dr M administration has been in a purge to ‘cleanse’ the country from its past malpractices
By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL
The new government’s pursuit to weed out corruption and probe dubious dealings linked to several state-linked entities is earning Malaysia top marks in the eyes of anti-corruption watchdogs.
Since winning the historic May 9 election, Prime Minister Tun Dr Mahathir Mohamad’s Pakatan Harapan administration has been in a purge to “cleanse” the country from its past malpractices.
This includes charges made against former leaders, changes in judicial appointments and investigations into scandal-plagued 1Malaysia Development Bhd, the Federal Land Development Authority and Lembaga Tabung Haji.
The 2018 Asian Corporate Governance (CG) Association CG Watch report in December has ranked Malaysia fourth out of 12 Asia-Pacific economies in terms of market accountability and transparency.
This marks an improvement from the seventh place in 2016, making Malaysia the biggest 2018 gainer among regional rivals that include Australia, China, Hong Kong, Japan and Singapore.
Finance Minister Lim Guan Eng said the rise further proves that the government’s continuous effort to instil the principles of competency, accountability and transparency in its administration is bearing fruit.
Asian Strategy and Leadership Institute and the Centre for Public Policy Studies research analyst Lim Pau Hua said the current administration’s anti-corruption drive implies that Malaysia is initiating the process of transitional justice, which is an important step to rehabilitate the rule of law.
“Combating corruption will give a clear message to the foreign investors that Malaysia is heading to a more transparent administration.
“This indicates less uncertainty and higher stability of our political system. It will allow investors to assume the position of power through ability rather than patronage,” Pau Hua told The Malaysian Reserve.
He said with the implementation of more anti-graft measures, Malaysia could achieve a higher score of at least 80 out of 100 in the Transparency International’s Corruption Perception Index (TI-CPI).
“I see this as a five-year plan. More institutional reforms have to be done. The Institutional Reform Committee has submitted their final report to the government, but very few of those measures have been adopted so far. The government has to treat the report more seriously and inform the public on what has been suggested,” Pau Hua said.
Malaysia has typically been ranked in the mid-table of corruption index, with our highest score at 53.2 points in 1996. Currently, Malaysia’s score of 47 points puts the nation in 62nd place out of 180 countries.
Institute for Democracy and Economic Affairs CEO Ali Salman said, while the government’s current drive to identify and prosecute corrupt practices is good news for investments, it is likely to challenge entrenched interests of different players who were accustomed with opaque decision-making which will lead to uncertainty in the short run.
“A successful anti-corruption campaign will not only help the country improve its perception but more importantly, improve its long-term economic prospects by widening the scope and opportunities for businesses dealing with government procurement and regulations,” he said.
Meanwhile, lawyer Lim Wei Jiet said the present government’s pledge to shed Malaysia’s image of a corrupt backwater into a nation with integrity, good governance and healthy economic management is crucial as foreign investors need to be assured of effective regulation of businesses, a reliable criminal justice system and a commitment to the rule of law.
“Studies have shown that foreign investors rely a lot on international surveys such as TI-CPI before injecting money into a particular country,” Wei Jiet said.
Despite early jitters arising from the change in government, foreign direct investments (FDIs) in manufacturing have more than tripled four months into Pakatan Harapan’s rule.
The Malaysian Investment Development Authority reported a 379% surge in approved manufacturing FDIs to RM35 billion from RM7.3 billion in the May-September 2018 period.
Last week, Moody’s Investors’ Service affirmed Malaysia’s local and foreign currency issuer and senior unsecured debt ratings at A3, with the view that the country’s economic outlook remains ‘Stable’.
Guan Eng said the unchanged rating by Moody’s was achieved despite full insight that Malaysia’s fiscal strength had weakened with a 3.7% deficit to GDP in 2018, 3.4% in 2019, 3% in 2020 and under 2.8% in 2021.
“The government recognises these economic challenges and will take steps to overcome them over a three-year time frame to put Malaysia back on track,” he added.