Paradox of public sector reforms in Malaysia: a good governance perspective.

Siddiquee, Noore Alam ; Mohamed, Mohd. Zin

INTRODUCTION

Issues in governance have, of late, become matters of growing concern in developed as well as developing countries. While major aid donors have initially played key roles in popularizing the concept of governance by making it a condition for granting aid to poorer countries, gradually it has received wider recognition from virtually all quarters. Currently, there seems to be a rare unity among aid agencies, international financial institutions, academics, government leaders, non-governmental organizations and civil society groups where they all see governance as a key to achieving sustainable development, despite diverse views on what constitutes governance, its measurement and ways of achieving it. Broad agreement on the centrality of good governance has paved the way for a new wave of governmental reforms initiated and implemented across the globe. Indeed, there has been such a proliferation of reforms that it is hard to find a government that has not lately initiated some form of reforms affecting its system of governance. Public sector reform has thus assumed a global character. The New Public Management (NPM), which gained currency in the 1990s, advocates redefinition of the role of the state in society and its relationship with the market alongside reforms for improving competence of the public bureaucracy (Pollitt, 1993). It is largely supportive of good governance agenda. Therefore, it has become a major element of governmental attempts to reshape and improve governance in many countries.

As elsewhere around the world and in the region, the public sector in Malaysia has been subjected to major reforms and transformations during the past two decades. Although reform initiatives have explicitly sought to make the public service more efficient and effective in serving its clients in a more responsible manner to achieve excellence in service delivery, it is argued that promoting good governance has been the underlying philosophy and a central thrust of reform initiatives. Malaysia's 5th national civil service conference held in June 2000 focused on good governance as its theme and discussed various strategies, issues and challenges involved. Most papers presented dealt with conceptual aspects of good governance and policy imperatives; they also touched upon ongoing reform efforts and changes being introduced by the government (INTAN, 2000). Thus, public sector reform is seen as an integral part of governmental attempts to promote and sustain good governance in Malaysia. This paper focuses on some of the reforms seeking to assess their contributions in terms of promoting broadly based, civically responsible good governance and accountable administration. The principal argument of the paper is that, even though public sector reforms have brought about some positive changes and improvements in various spheres of public management, they have remained far removed from civic values of good governance. Consequently, their overall impact has remained marginal. However, it is important at the outset to clarify the concept of good governance and the meaning in which it is used in the present paper.

CONCEPTUALISING GOOD GOVERNANCE

Despite its widespread appeal and popularity, governance and more specifically good governance has remained a highly contested term. Ever since its formulation in a World Bank document in 1989, the term governance has been used by various parties to refer to a wide range of issues, ideas and policies. The early proponents like the World Bank define governance as "the manner in which the power is exercised in the management of a country's social and economic resources for development" (World Bank, 1992). It is also seen as "traditions and institutions that determine how the authority is exercised in a particular country" (Kaufman, et al., 2000). Even though such a conception of governance encompasses a wide range of issues, three major aspects were particularly highlighted: the process by which those in the authority are selected, the manner in which they exercise power in the management of public affairs, and the capacity of the government machinery to manage resources and formulate and implement policies. Therefore, the key elements of governance, according to this view, are legitimacy of the government, the accountability and responsiveness of political and administrative elites, and the competence of the governmental machinery to make policies and deliver services. As the first one falls outside its official mandate, the Bank focuses specifically on the second and the third elements. The other agencies like OECD accept the definition advanced by the World Bank, but they tend to place greater emphasis on participatory development, human rights and democratisation. A more comprehensive definition has, however, been advanced by Keohane and Nye. According to them, governance refers to

" ... the processes and institutions--both formal and informal--that guide and restrain the collective activities of a group. Governance need not necessarily be conducted exclusively by governments. Private firms, associations of firms, non-governmental organizations (NGOs) and associations of NGOs--all engage in it, often in association with governmental bodies, to create governance sometimes without governmental authority" (Keohane and Nye, 2000).

It is clear from the above that governance means much more than government; it includes all other actors like private firms, NGOs and other civil society groups. It signifies not only the institutions through which the authority is exercised in the society; it also emphasizes the processes and the whole range of relationships between state and other non-state actors. Most authors take their discussions even further to identify and analyze various indicators of governance that could be applied to separate good governance from bad/poor governance and/or to assess the extent to which the governance of a particular country conforms to the values of good governance. Obviously, good governance connotes a desirable state of affairs--usually described in terms of some key components. While the Asian Development Bank considers accountability, transparency, openness, predictability and participation as building blocks of good governance (ADB, 1998), others tend to prescribe a number of additional values as essential prerequisites. These include political legitimacy and accountability, freedom of association and participation in the process of governance, an established legal framework based on the rule of law and the independence of judiciary to protect human rights, freedom of information and expression, sound and competent administration, cooperation with institutions of civil society and respect for human rights (Blunt, 1995, UNDP, 1995). A broader view of good governance further includes policies for economic liberalization and creation of market-friendly environments, transparency in political and economic decision making, promotion of civil society and the measures to promote and safeguard long-term global issues like education, health and the environment (Najem, 2003).

Clearly, there is no consensus on what constitutes good governance. Also obvious is that good governance involves much more than efficient management of economic and social resources or improved delivery of public services; it essentially relates to the quality of relationship between the government and the governed. It also involves relationships and cooperation among the public sector, private agencies and civil society organizations in policy-processes as well as the delivery of services. For the purpose of this paper, however, the term is used in a much narrower sense. In our view, a country is credited with good governance if its government is perceived to be legitimate, its operations are open and transparent, it remains accountable to the public and it has a competent system of administration that is reasonably free from corruption and mismanagement. Using this as a framework, this analysis focuses on public sector reforms in Malaysia with the aim of assessing to what extent reform efforts have supported key values/elements of good governance: namely accountability, transparency, combating corruption, participatory administration, and the competence of the administrative system to deliver services efficiently.

THE NATURE OF PUBLIC SECTOR REFORMS IN MALAYSIA, 1981--2005

Since the early years of Malaysia's independence, the public sector of the country has experienced a variety of reforms in the light of changed situations and changing policy priorities of the government. The early reform attempts and those that followed in the 1970s were geared towards institution building and strengthening the administrative capacity to promote state-led socio-economic development. The adoption of the market ideology in the mid 1980s and subsequent policy decisions under the National Development Policy (NDP) and Vision 2020 (the 30-year perspective plan that seeks to transform Malaysia into a developed country by 2020), marked the new beginning of reforms. Launched in 1990, these two documents have recognized the pivotal role of the private sector as the main engine for economic growth and development with the public sector playing only a facilitative and supportive role in the process. As the role of government has changed from direct intervention to an indirect and supportive one--often referred to as the 'paradigm shift' (Sarji, 1996a), reforms were called for to restructure the public sector to enable it to perform its new and emerging roles effectively. Thus, the public sector reform in Malaysia pre-dates the good governance paradigm. However, the Asian financial crisis and the advocacy for good governance that followed have added urgency to the idea of broadening and deepening of reforms. As the changed local as well as international contexts have seen greater demands for appropriate initiatives; the government responded by introducing new reform measures while at the same time, consolidating the existing ones. Table 1 provides a snapshot of major reform initiatives made since early 1980s.

Given that reform efforts involved providing customer-oriented services, improving systems and work processes, strengthening public-private cooperation, enhancing accountability and integrity and inculcating values of excellence in the public service (Karim, 2000) among others, they were also expected to promote the values of good governance and responsible administrative behavior.

The worldwide recession of the 1980s and its consequent effects on domestic economy forced the Malaysian government to rethink its role in the society and subsequently reduce the size of its public sector. Although a number of initiatives were launched with this end in view, the drive that has had the most dramatic impact on the structure of the public sector was the program of privatization. Initiated in 1983, privatization policy in Malaysia was aimed at relieving the financial and administrative burden on the government and facilitating economic growth through promotion of efficiency and productivity, among other purposes. Guided by the Privatisation Master Plan, it has become a major strategy of the government to downsize the public sector while accelerating economic growth and development. The program has been actively supported by Malaysia Incorporated Policy which provides a framework for strategic collaboration between the public and private sectors to advance the cause of national development.

Privatisation in Malaysia has been implemented in phases: by 2003 a total of 471 projects have been privatized (Commonwealth Secretariat, 2004) in different sectors of the economy using various modes and forms of privatization. Though comprehensive assessment on the overall impacts of privatization is not available, evidence shows that it has been effective in trimming Malaysia's bloated bureaucracy significantly: it has led to the reduction of nearly 111,000 employees in the total public sector workforce. It has also succeeded in alleviating the financial burden of the government through savings in huge operating costs to the tune of RM 7.7 billion annually and capital expenditure of RM 125.2 billion (ibid). This, along with the proceeds of the sale of assets and equity and the revenue from corporate tax and other taxes imposed on these entities, enabled the government to reduce its borrowing as well as to re-allocate resources to more critical sectors.

The public sector has also undergone fundamental rethinking and redesign in terms of work procedures and methods paving the way for modification, simplification and even elimination of work processes, rules and regulations. Counter services have been upgraded in terms of layout and facilities, mobile counters have been introduced, additional facilities like credit card payments and drive-in counters have been created. While continuous attempts are being made to improve the quality of services offered, emphasis has been put on providing swift and hassle-free services to clients, including potential investors. Faced with growing competition from other emerging destinations of investment, government felt it important that investors' concerns are taken care of and that the government administration is ready to put the interest of the business first. One-stop clearance centers have been established in order to provide all necessary services pertaining to issuance of licenses and permits from one-point, thereby quickening the process of business approvals. The emphasis was on efforts to rid administration of bureaucratic practices and speed up the approval process for applications related to issuance of permits, licenses, and land administration as well as economic, investment and other matters. This eventually has led to the introduction of new application forms, merger of several forms into a composite application form, reduction of time taken for processing of applications, extension of validity of licenses, and the establishment of licensing centers especially at the local level. Some of the prevailing systems have been abolished and the correspondence procedure has been streamlined.

The government has also instituted a series of reforms seeking to improve the quality and productivity in the public service. Besides the adoption of the Total Quality Management (TQM) in the public sector, the introduction of Quality Control Circles (QCC), Quality Assurance Unit, Strategic Planning and the Clients' Charter are the other notable efforts made towards upgrading quality of services and productivity in the public sector. The quality movement became intensified and strengthened when a comprehensive awards system was introduced in an attempt to institutionalize the culture of excellence in the public service. While the implementation of such innovations has already marked the beginning of quality management in the public service, further inroads have been made since the adoption of internationally recognized ISO 9000 series in 1996. Taking the cue from the OECD countries, the government has asked all its agencies to strive for and achieve ISO certification. Even though Malaysia has chosen to implement its own version of ISO 9000, it is the first country in the world to embark on ISO for the entire government machinery (Common, 2001). This is significant for it provides a comprehensive system of checks, control and inspection at every stage of the work process so as to ensure consistency in the quality of goods and services produced. At the end of 2003, a total of 746 public sector agencies obtained MS ISO 9000 certification (ibid). A further step forward in this area was the introduction of the benchmarking program in 1999. Under the programme, the government agencies are required to examine relevant best practices by the benchmarking partner and seek ways and means to adopt and improve upon its application in their own organizations.

Given that public accountability is seen as the foundation of a responsible government, conscious attempts have been made to strengthen accountability within administration. The Anti-Corruption Agency (ACA) and the Public Complaints Bureau (PCB)--the two major institutional mechanisms--have been strengthened in order to allow them to play an active role in promoting public accountability and responsiveness. A new dimension to public accountability has been added with the introduction of the Client's Charter in 1993. The Charter is a written commitment made by government agencies pertaining to the delivery of services; it is an assurance by the agencies that outputs/services will comply with the declared quality standards that are in consonance with the expectations and requirements of the customers (Sarji, 1996a). The government policy requires that Client's Charters be formulated and implemented by government agencies at all levels, statutory bodies, district authorities and local bodies. It is claimed that the Charter will enable the public to know specifically the quality of service and to evaluate the services rendered. The Charter will also help reduce uncertainties over the delivery of services and facilitate comparisons between agencies that offer similar services. The service recovery mechanism, introduced in the following year, is expected to ensure that appropriate actions are taken to restore the customers' confidence should the agency fail to deliver services promised in its Charter. For the government departments or agencies it was anticipated that the Charter would provide performance indicators, enable them to make evaluations and thus foster accountability and responsiveness in the public service. Several other programmes were also launched with the same end in view. Programs like 'clean, efficient and trustworthy administration' campaign, formation of management integrity panels at federal, state and district levels, strengthening of anti-corruption legislation, and the consolidation of the public complaints management system-all were designed and implemented to bolster and institionalize accountability and integrity within administration.

As in other areas, the public sector personnel and financial management systems have undergone significant reforms and transformations. The introduction of the New Remuneration System (NRS) in 1992 represents a major reform in the area of public personnel management. Among other things, it seeks to bolster the motivation of public sector employees by removing the anomalies of the prevailing system and make the public sector pay and promotions more fair, objective and performance-based. An important element of the NRS is that it has reduced 574 existing schemes of services to 19 service classifications and introduced a matrix salary scheme, replacing the linear salary scheme followed earlier. The matrix system is seen as an attempt to promote meritocracy (Sarji, 1996b) by linking pay with performance: four different salary movements (e.g., static, horizontal, vertical and diagonal) have been identified thus allowing individual officers to move to better salary schemes based on their actual performance measured objectively.

To support the NRS, a new performance appraisal system has been designed which is expected to provide for a more systematic, transparent and reliable measurement of employee performance. The whole task of performance appraisal has been decentralized: a panel is empowered to examine, consider the performance of an employee, decide on the salary progression and determine the number of officers who are eligible for various types of salary increase without disregarding the specified quota for the respective categories (ibid). However, because changes proposed under the NRS and the new the performance appraisal system created discontent among some civil servants, the Malaysian Remuneration System (MRS) was introduced in 2002. Since the Malaysian economy is moving into a knowledge-based economy and there is a continuous need for high caliber individuals who are either conversant with or keen to acquire new skills and knowledge, the MRS seeks to attract and retain the best officials in the public service. It focuses on competency as one of the main elements of career development and salary progression: those who meet the requirements of the competency assessment for their respective levels and those who excel in their work performance will receive an accelerated salary progression instead of traditional annual increment. Thus, the new system has provided some amount of control to the individual; it has also introduced modifications to salary structure, allowances and prerequisites, as well as terms and conditions of service for public sector employees (Osman, 2003; Commonwealth Secretariat, 2004). A number of attempts have also been made to ensure an efficient and effective financial management system in the public sector. The introduction 'of modified budgeting system (MBS), micro-accounting system, strengthening of audit mechanisms, and implementation of e-procurement are among the notable drives that have significant impacts on public sector financial management.

The advent of information technology has offered enormous opportunities transform governmental service delivery systems. Consequently, the government in Malaysia has embarked upon a massive e-government program and has already made significant progress towards its implementation at national, state and local levels. The drive began with the establishment of the Multimedia Super Corridor (MSC) in 1996. Meanwhile, a number of pilot projects have been completed in various areas. Services like driver and vehicle registration, licensing and summons services and the payment of utility bills have all been integrated under the e-Services program that allows the members of the public to access such services electronically. Attempts are currently underway to ensure greater networking and integration so as to bring more and more services under e-government. E-Perolehan is the official secure online marketplace for suppliers and government agencies. It allows the suppliers not only to receive tender information and documents from public agencies nationwide and submit bids/quotations but also to complete transactions and receive payments--all online. The Government Multi-purpose Card serves as a national identification document, bank card and driving license and a variety of other purposes. Additional facilities are now being added to make it a vehicle of convenience in all aspects of life (Karim, 2003). The government is confident that, with the full implementation of e-government, more and more services could be provided online allowing the members of the public to access such services at any time and from any place without being constrained by agency working hours and distance. The E-Public Services (E-PS), currently in progress, envisions a collaborative and proactive relationship between public, private and voluntary sectors in providing quality services that meet the customer expectations in the information age.

GOOD GOVERNANCE AND THE PARADOX OF PUBLIC SECTOR REFORMS

The preceding discussion shows that the government of Malaysia has, in the recent past, introduced a variety of changes in its public management system. These changes are not only geared towards enhancing efficiency and institutional capacity of the governmental machinery, they also seek to transform it into a dynamic, accountable and customer-oriented administration. Generally speaking, reforms have produced positive impacts in ensuring quick, hassle-free and timely services to customers. Simplification of rules and regulations and other improvements have resulted in much less paperwork and enhanced timeliness in the provision of services in several areas. Likewise, the availability of online services has cut down paper work; customers no longer have to fill out many forms or visit the counters of relevant agencies in order to gain access to these services. Charters have been formulated by most, if not all, public agencies thus offering the promise of improved and timely delivery of services to their clients. This has been supported further by the adoption of IT and multimedia in the public service. The Ministry of International Trade and Industry, Immigration Department, Inland Revenue Department, Customs and Excise Department and National registration Department are among the agencies that have reported considerable improvements in the time taken for the services they offer. Other reforms like privatization, restructuring programmes and NRS are said to have contributed to streamlining the structure and size of public bureaucracy. Privatisation policy has not only led to substantial reduction in the total workforce and eased the administrative and financial burden of the government; it has also contributed immensely to Malaysia's economic development. As a supportive effort, the Malaysia Inc. has helped remove misunderstandings and conflicts between the public and private sectors, thereby providing a stable and friendly environment through dialogues and consultative mechanisms (Ali, 2001).

Despite such silver linings, public governance in Malaysia does not fare well when judged against good governance indicators. Reforms initiated so far are undoubtedly steps in the right direction; however, they have fallen short of what was required to promote good governance. This section focuses on some of the limitations of public sector reforms in promoting the values of good governance. Reforms have not altered either the structure of the government or its policy process to widen the scope of democratic participation in the process of governance. Despite its federal framework, the Malaysian system of government is characterized by a high degree of centralization and top-down approach to decision making. Suspicious of the disruptive consequences of devolution or delegation of power, the government has made no attempts at delegating authority to lower levels or to non-state institutions. Instead, centralization has been the preferred option--reinforced further by the concentration of power in central agencies like the Prime Minister's Department (PMD), Treasury, Economic Planning Unit (EPU) and various service commissions. The PMD symbolizes the concentration of extensive policy and managerial authority for planning and implementation activities undertaken from the federal to the state and local and district levels. In the absence of decentralization and/or devolution, local agencies in Malaysia are no more than subordinate offices of the state government. They continue to be formed and regulated by the stage governments, suffer from limited capacity and resources and depend on federal and state grants. Given that local government elections remained suspended since 1969, popular influence on the functioning of local bodies and pressures for responsiveness is rather limited, if not missing altogether. Though the administrative system in Malaysia has undergone significant transformations in the recent past, no significant attempt has been made either to democratize governance at the grassroots level or to rejuvenate the local government bodies. The repeated overtures from political opponents and the intelligentsia to reinstate an elected local government system have gone unheeded so far. Thus, public participation in the processes of governance has been conspicuous by its absence. Reforms carried out so far have not augmented opportunities for wider roles to be played by politically organized groups: civil society organizations cannot exert pressures on the government. In other words, individuals, groups or organizations in the society have little or no inputs in the policy process; public policies continue to be insulated from direct political pressures from below and influences from outside the public sector.

The problem of public participation and adequate scrutiny of policy decisions has been compounded further by absence of transparency and openness in governmental operations. The Asian financial crisis has exposed the imperfections of the existing approach to governance in general and lack of transparency and openness in governmental operations in particular. For some analysts, crisis in Malaysia was nothing unusual given the prevalent nature of the administrative culture where financial and economic decisions were made under a cloak of secrecy, negotiated rather than open tenders were a preferred option, privatization projects were handed on a platter without competitive bidding, and bank lending policies and procedures were bent under political pressures (Aziz, 1998). While some Southeast Asian nations have made slow but steady progress in establishing structures for free flow of information between the government and society, in Malaysia, with tough regulations firmly in place, public access to information and disclosure of public dealings have remained restricted as before. Even the media is unable to keep the public informed of any official malfeasance and abuse of power simply because it lacks adequate access to information and, more so, it is subject to strict governmental control. While the electronic media is the captive of the government, all major dailies are either wholly owned by the government or under the direct influence of component parties of the Barisan Nasional (BN). Also, the media faces a formidable challenge with regard to the publication of critical analytical commentary as they are required to renew their licenses from the Ministry of Home Affairs every year. The sweeping powers given to the government under the Official Secrets Act, Publications Act, the Internal Security Act and the Sedition Act serve as further deterrents on the ability of the media to act as an effective watchdog. As such, professional investigative reporting is rare, especially if it affects the ruling elites. Likewise, political reporting is also cautious, unless it applies to the opposition. The policies and practices, as outlined above, have seemingly worked well in that they helped maintain political stability and steady economic growth, but they have adverse consequences on the democratic health of the society. It is maintained that such policies have greatly undermined the growth of an environment and democratic culture that are vital for ensuring and sustaining good governance. The following observation by an analyst aptly summarizes the point:

 'The use of restrictive laws to curtail
 political participation and create a culture of
 fear that dissuades open dialogue and checks
 challenges to the ruling elite, the lack of
 opportunity for an adequate and transparent
 scrutiny of governmental affairs through the
 control of the press and media have thwarted
 the growth of a citizenry with capabilities for
 effectual participation in the public affairs of
 the country. Without such capabilities, the
 public at large tends to become passive
 recipients of government directed social
 facilities and dependent on leaders for
 fulfillment of their economic needs' (Tharan,
 2001).

Despite changes brought about in various spheres of public bureaucracy public accountability in Malaysia does not appear to have improved appreciably. Though there is no shortage of institutional arrangements, the performance of the existing mechanisms to promote public accountability has fallen short of expectations. Most accountability mechanisms like, the Anti Corruption Agency (ACA) and the Public Complaints Bureau, (PCB) are weak and suffer from a set of constraints and inherent limitations. Reform measures failed to address such weaknesses to transform the agencies into effective organizations. Clients Charters have positive but limited impacts for a variety of reasons (Siddiquee, 2005). Evidence shows that what is promised in the charters is not always practiced; a majority of the clients are unaware of their rights and hence unable to assert themselves. Independent oversight bodies, free media and judiciary and powerful civil society have remained alien concepts in the Malaysian context. Given this and the absence of effective legislative oversight (ibid), public accountability in Malaysia has been anything but robust. This explains to a large extent the growing incidence of bureaucratic lapses, irregularities and abuse in recent years (Hai, 2002). Thus it is nothing unusual that the members of the public in Malaysia have expressed their concerns with the present level of service provision and bureaucratic performance. A look at the nature of complaints reveals that delays in service provision, unfair actions/ decisions on the part of administrators, abuse of power, misconduct of the officials, failure to enforce rules are among the common complaints made to and regularly received by the PCB.

More serious is the problem of corruption, which is believed to be rampant particularly at lower levels of administration. A recent survey confirms that corruption in the public agencies is fairly high with 31.6 percent of the respondents reporting the occurrence of corruption in their own agencies (ACA, 2003). This is also reflected in Malaysia's standing in Transparency International (TI)'s Corruption Perceptions Index (CPI). With CPI ranking of 37 and CPI score of 5.2 in 2003, Malaysia has not only remained far behind many developed and several developing countries; the country's CPI score is still below the initial score of 5.28 and 5.32 during 1995 and 1996 respectively. More disturbing is the most recent CPI ranking released by TI. Malaysia has remained 39th in the world ranking with scores of 5.0 and 5.1 in 2004 and 2005 respectively (TI, undated), despite the much publicized war against corruption declared by the new Prime Minister Abdullah Ahmad Badawi. The public sector reforms contributed neither to the effectiveness of control mechanisms nor to the modification of bureaucratic ethics and behavior. On the contrary, reforms like Malaysia Inc. and privatization have allegedly served as a convenient formula for unfettered cronyism and abuse of power for private gains (Funston, 2001, Jomo, 2003).

The present government under the leadership of Abdullah Badawi has vowed to crack down on corruption and, as a first step, has cleared the way to investigate some sensational corruption cases. The two high profile arrests made by the ACA in February, 2004 and the ongoing trial of a former minister of land and cooperatives development and the former managing director of state owned Perwaja Steel have bolstered the image of the government in the eyes of the public. These events have also generated a lot of interests among the members of the public and the political analysts because of the fact that the ruling United Malays National Organisation (UMNO) has a long history of money-politics and vote buying, which became worse and so obvious in the party's annual convention in 2005. The unexpected win by some candidates and the failure of some veteran ministers to gain seats in UMNO supreme council was attributed largely to vote buying and money-politics. As the subsequent investigations confirmed the hypothesis, punitive actions were taken against two top ranking party leaders: the Federal Territories minister was initially suspended from the party for six years and was later removed from the cabinet, and a former state assembly man has been sentenced to four years in jail and a fine (New Straits Times, 23 August, 2005). While these steps have also been hailed by the government's supporters and critics alike, there is a widespread view that the problem is so deep seated that it requires a far more comprehensive approach and resolve to fight the evil. The recent police commission report has revealed the breadth and depth of the problem in the police department prompting demands for similar commissions on other agencies. The government has accepted the report and promised to implement the recommendations in phases. Therefore, the seriousness of the regime is not so much in question, but to what extent it is able to tackle the perennial problem of money politics and administrative corruption in the future remains unclear, for Mr Abdullah has resisted, like his predecessor, the demands for an autonomous ACA, a powerful Auditor General and an independent Ombudsman.

Reforms in the area of personnel and financial management have not brought about fundamental changes in these areas. Personnel management reform under the NRS has been limited in scope in that it did very little to promote merit and fairness in public employment and promotions. While in theory merit is the basis of public sector employment, in reality it is the quota principle that plays crucial roles. The quota system--a legacy of the colonial times--legitimizes the discrimination against ethnic minorities in the public service for it reserves 80% of the civil service positions for ethnic Malays who make up slightly more than 50 percent of the total population. Such discrimination has been extended to other areas including the selection of students for admission into public universities. There are several implications of such policies for the public service. The continuation of the quota system indicates mediocrity rather than meritocracy in public sector appointments and promotions. Therefore, it is no coincidence that the public service is attracting and retaining less qualified, less competent and poorly motivated civil servants (Navaratnam, 2004). The present imbalance in the composition of the public services is getting even worse because of declining interests shown by non-Malays to join the public sector. Such a situation, if allowed to continue, may fuel frustration and a sense of alienation among the minorities. Therefore, such policies and practices are hardly conducive to the goals of developing an efficient public service and/or strengthening national unity. It is precisely for this reason that corrective actions are urgently required to ensure that the public service reflects the multi-racial composition of the society (ibid: 91-92).

Even though the NRS was presented as a major element of public management reforms, it did nothing to correct such anomalies and hence to establish meritocracy in the civil service. Neither has it been able to satisfy the concerns of public servants. Instead, it has created discontent and frustration among some categories of officials who denounced it for offering too few levels, thereby requiring them to spend a long time before they could be promoted to the next higher level. The implementation of the performance appraisal system has also met with criticisms, and it is still denounced as one that provides scopes for arbitrariness, irregularities and bias (Siddiquee, 2002). Some employees claimed that they were unfairly penalized by their bosses who were overly strict, while other bosses were too lenient. The recently introduced Malaysian Remuneration System is expected to encourage self-development through continuous learning and by rewarding deserving individuals through accelerated salary increases. To what extent it is able to achieve such objectives remains to be seen. The MBS has yet to significantly improve the situation in terms of various weaknesses, anomalies and deficiencies in the area of financial management. Audit reports reveal a high incidence of failures on the part of the federal, state and local governments to comply with relevant rules and regulations, loss and embezzlement of public funds, improper monitoring and supervision (Auditor General's Report, 1999).

Though public bureaucracy in Malaysia generally scores better when compared with its counterparts in other developing countries, yet there has been growing concern with its competence and level of efficiency. While most of the reform initiatives sought to enhance the institutional capacity and competence of the public bureaucracy to be able to serve the clients better, evidence shows that the bureaucratic performance has not matched with public expectations. Notwithstanding some improvements in several areas as noted earlier, public bureaucracy continues to suffer from a poor image in terms of efficiency and organizational competence. It is clearly reflected in the growing number of complaints received on the quality of services offered by various agencies. Findings of a survey conducted by FOMCA in 2002 are indicative of public dissatisfaction with public services: 60% of the respondents reported a waiting period of 30-60 minutes and another 30% reported a waiting period of 1-2 hours. Although 60% of the staff on duty were reported to be customer-friendly, on a 10-point scale (with 1 worst and 10 excellent) 70% of the selected services/agencies received the score of 5 and below. Furthermore, 75% of the respondents believed that favoritism was commonplace in administration (PCB, 2003). Navaratnam (2004)--a former public servant--maintains that public perception about the quality of services has probably reached its lowest level. Other evidence also indicates a decline in public sector competence in recent years. An analysis of the public sector competence of 12 Asian countries from 1999 to 2001/2002 by the Global Competitiveness Report shows that Malaysia's ranking dropped from 46 in 1999 to 65 in 2001/2002. Malaysia has fared poorly compared with neighboring Singapore, which has ranked first for three consecutive years. Measured on a 0-7 scale (where 0 means least competent and 7 means the most competent), Malaysia's scores are 2.24, 2.50 and 2.10 against Singapore's 4.52, 4.4 and 4.7 during the same period. Even more surprising is that Malaysia's 2001/2002 ranking is below that of Thailand (44), Indonesia (48), and the Philippines (58) (see TGCR, 1999, 2000 and 2002), whose public bureaucracies are usually perceived to be inferior to that of Malaysia. Clearly, the reforms have failed to make any lasting mark on the situation, despite official claims and usually rosy picture painted in most government publications, to the contrary.

The legitimacy of the government has rarely been questioned because Malaysia has been under democratic rule since independence in 1957. As regular and credible elections are held with high voter participation, the ruling BN government and its policies have not faced serious legitimacy questions, except in 1998 following the sacking of former Deputy Prime Minister Anwar Ibrahim when thousands of Malaysians took to the streets. Though the government has been able to deal with that crisis and strengthen its position by wining the most recent elections with a bigger margin, most old concerns with governance have remained unresolved. Freedom of expression and assembly continues to be restricted, repressive legislation not only continues to exist, but provisions have been fine tuned and extended. The use of mass-media by the government to propagate its own point of view and muffle that of others continues unabated. Because of all this and the hegemonic rule of the ruling coalition, Malaysia is often regarded as 'semi-democracy' or 'democratic authoritarianism' (Crouch, 1996; Teik, 1997). With electoral rules stacked against non-ruling parties, the elections in Malaysia though free are anything but fair. Elections involve very short official campaigns (of nine days only), and those in the opposition have no access to the media and find it difficult to get their views across. If they plan to organize a public meeting, they are either denied or granted such permission at the last moment, making adequate and advance publicity difficult. Public sector reform has had no bearings on such practices.

CONCLUSION

The public sector in Malaysia has experienced significant changes and transformations in its institutional, operational and procedural perspectives as a result of reforms initiated and implemented during the past decades. Many of the changes have been driven by managerial considerations and hence are consistent with those introduced elsewhere under the new paradigm of public sector management. In other words, the recent attempts, especially those initiated since the early 1980s, have marked a shift towards market-oriented administration with emphasis on customer focus, quality and productivity improvement. They also sought to improve efficiency in resource management, enhance governmental effectiveness in service delivery, and augment accountability and responsiveness of service providers. It is hard to deny the importance of such reforms and their potential contributions to improved management and service delivery. However, they seem to have had very little impact when considered from broad good governance points of view.

On the one hand, reforms have remained narrowly focused and limited in scope, on the other hand, they have not been supported by other reforms. In most cases, reforms initiatives have failed to go beyond restructuring of existing institutions and revamping of rules, regulations and procedures. Even though changes introduced in the public bureaucracy are seen as steps in the right direction, they have failed to make fundamental change in the mode of governance given that the larger context in which the public sector operates has remained unaltered. Since no attempts have been made simultaneously to reform the political and governmental system of the country, public management reforms have produced only limited impacts.

The leadership in Malaysia has so far preferred technically efficient and effective governance over good governance in terms of civic involvement (Tharan, 2001); it has introduced reforms that focus mostly on strengthening the administrative capacity for planning and managing programs of socio-economic development. Since the racial riots of 1969, the leadership has maintained its suspicion of the dangers of greater democratization of the society and, hence, has strongly justified efficient and effective governance over democratic governance for stability and socio-economic progress. Although things have changed since then the leadership is yet to demonstrate any serious interest in the values of good governance by introducing reforms for widening scopes for democratic decentralization, people's participation, transparency and openness in political and administrative processes. As the political leadership is keen to retain and strengthen its control over the society rather than weaken it through reforms, it has shied away from reforms in areas of decentralisation of power, democratization of administration and grassroots participation. Likewise, the administrative elites in Malaysia, like those in other developing countries, are bent on preserving their vested interests and privileges. Since the public service in Malaysia is an important element in the institutionalization of Bumiputra advantages and privileges in return for their loyalty and support (Cheung, 2001), those within the administration have no reasons to support the reforms that will jeopardize such privileges. Although the government's policy of favoring effective governance over good governance has arguably worked well in that it helped maintain order and stability in the society thereby facilitating steady economic growth in past decades, the crisis of the late 1990s has demonstrated that economic growth is difficult to sustain in the absence of broadly inclusive good governance. Therefore, the need as well as demand for good governance with civic involvement and responsibility in Malaysia is more and more pronounced. In the present context it is widely believed that a far more comprehensive approach to reform is called for if the Malaysian system is to achieve the character of good governance. But the most important prerequisite is a fundamental change in the orientation of the country's leadership--both political and administrative--that effective governance and broadly based constitutional good governance are not in conflict with one another; in fact, one can reinforce the other.

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NOORE ALAM SIDDIQUEE

Flinders University of South Australia

MOHD. ZIN MOHAMED

University of Malaya

Table 1
Public Sector Reform Initiatives in Malaysia, 1981-2005

Areas of Reform Nature of Reforms

Structural/Institutional Restructuring of Public Sector Agencies
Aspects
 Merger of State Administrative Services
 with Federal Civil Services

 Implementation of Privatisation Policy
 since 1983

Procedural Matters Revision of Service Delivery Systems
 and Processes

 Improvements in Counter Services

 Introduction of New Application Forms;
 Establishment of One-stop Service
 Centres

 Introduction of Public Service Networks
 (PSN)

Personnel Management Introduction of New Remuneration
 System (NRS), 1992

 The New Performance Appraisal
 System, 1992

 Malaysian Remuneration System, 2002

Financial and Budgetary Introduction of Modified Budgeting
Issues System (MBS)

 Introducing Micro-Accounting System

 Adoption of Standard Accounting
 System for Government Agencies
 (SAGA)

Quality & Productivity Quality Assurance Circles
Focus
 Adoption of Total Quality Management

 Establishment of Quality Assurance
 Units

 Adoption of MS ISO 9000 Series

 Implementation of Benchmarking

Public Integrity & Introduction of the Client's Charter, 1993
Accountability
 Strengthening of Anti Corruption Agency
 (ACA), 1997

 Establishment of Management Integrity
 Panels at all levels

 Introduction of 'Meet the Clients
 Programme'

ICT & Electronic Service Establishment of Multi-media Super
Delivery Corridor

 E-Services Programme

 E- Procurement

 Telehealth Scheme and Multipurpose
 Card

 Electronic Labour Exchange Scheme

 E-Public Services (E-PS)