LETTER | The need for institutional reforms in GLCs

LETTER | One of, if not the main problem faced by our government is the lack of sufficient funds to finance pro-people programmes that can truly raise the average citizen’s living standards and socioeconomic security.

One effective way of acquiring much-needed funds is by cracking down on all forms of corrupt practices involving unlisted firms and subsidiary companies under GLCs through the implementation of institutional reforms.

This will help significantly reduce wastage of funds, thereby increasing the profits of these companies. This, in turn, increases the portion of these profits that are acquired by the government via taxation and dividends, which can then be utilised towards implementing pro-people programmes.

Many of the points in this article have been explained by Centre to Combat Corruption and Cronyism (C4) chairperson Dr. Edmund Terence Gomez.

Several politicians and bureaucrats from various ministries use these unlisted firms and subsidiary companies as a tool for patronage to muster support, rent-seeking, sourcing funds

for political party activities, etc.

There are a number of politicians serving as directors and who have been given employment in some of these companies.

As directors of these companies, these appointed politicians are given contracts, some of which are further subcontracted to their respective cronies.

With the profits generated by these companies, some of these directors then declare bonuses for themselves as a way of gaining more wealth.

Apart from that, these unlisted firms and subsidiary companies under the GLCs have long become an economic tool during election season to muster electoral support, particularly among rural communities, by undertaking activities in particularly poor, under-developed constituencies under the guise of implementing corporate social responsibility activities.

And given the fact that these companies don’t seem to have much oversight and accountability, this provides a huge opportunity for corrupt activities and subsequently, the accumulation of great wealth and support by the politicians and the bureaucracy.

As a result, corrupt practices such as patronage, rent-seeking, cronyism, and nepotism have become rooted in Malaysian public governance for quite some time now.

More importantly, such corrupt practices throughout the years have wasted a large amount of generated profits by these companies that instead could have been utilised by the government to help improve the quality of life and uplift certain targeted and underprivileged communities within our society through various programmes.

Because of this, serious problems such as hardcore poverty and basic infrastructure issues in rural areas still persist to this day.

Therefore, in order for the government to effectively tackle such corrupt practices in these unlisted firms and subsidiary companies, thereby stopping the wastage of much-needed funds, several political reforms must be seriously implemented at both the federal and state level, such as:

1. Closing down unlisted firms and subsidiaries that have the same functions and aren’t as effective as current private enterprises within the same sector.

A systematic and thorough review of such companies must first be conducted to effectively identify important details, such as the existing number of such companies and the number of their employees.

The closing down of these companies must be conducted in stages and job security for their employees must be taken care of responsibly by ensuring that there are high-paying jobs available for them.

This move is in order to boost efficiency and eliminate the wastage of funds in such redundant companies.

The funds from these closed-down companies will then be absorbed into their respective parent GLCs, thereby increasing those GLCs’ profits as well as the portion of those profits acquired by the government via taxation and dividends, which can then be utilised towards implementing more pro-people programmes.

2. Imposing a stringent institutional check and balance system with independent oversight towards the whole GLC institution, especially on unlisted firms and subsidiary companies. Parliamentary action committees, led by members of the opposition, should have oversight of these enterprises.

The leaders of these companies should be apolitical and autonomous so that inefficiencies and abuse of power can be effectively weeded out.

This move will also boost efficiency and eliminate the wastage of funds in these companies, thus ultimately resulting in the government acquiring a greater share of the generated profits which then can be utilised towards improving the average citizen’s socioeconomic status.

3. Enacting legislation so that the definition of “corruption” is expanded to include patronage, cronyism, misuse of funds, misappropriation of funds, etc.

Currently, corruption in Malaysia is equivalent to “rasuah” or bribery, which only refers to acts of receiving or giving bribes as a reward or incentive for an individual doing or not doing something related to official duties.

This current definition is far too small and narrow. As such, this measure can significantly help deter various forms of corruption as well as impose effective punishments against individuals engaging in such activities.

In conclusion, such GLC institutional reforms can lead to the curbing of wastage and corruption, thereby providing the government with much-needed funds.

With these acquired funds, the government can then work more effectively towards eradicating poverty, redistributing wealth equitably, and resolving socioeconomic problems, particularly among the B40 in our society. This in turn will increase public support for the government.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.