This practice reflects on the competence of the Government to plan ahead prudently and to budget for the year ahead. The practice shows at best an inability to manage resources but at worst an attempt to deliberately under-provide for expenditure at the beginning of the budget cycle thereby sending misleading signals to markets and the people. It would not be inappropriate to conclude that the government is more interested in painting a rosy picture of the nation’s finances than in managing them in a sound, intelligent and prudent manner. What we see in this mini-budget is another attempt to appropriate large sums of money without the House being given an adequate and rational accounting of how these expenditures fit into the larger picture of the nation’s finances and how these relate to the overall macroeconomic circumstances.
For instance, there is a hefty allocation of RM686 million for public facilities for Putrajaya, which goes against public assurances that the bulk of the development of Putrajaya would be borne by the private sector.
Last month, for instance, Putrajaya Holdings Sdn Bhd Chief Executive, Datuk Mohd Hashim Hassan said that the total funding for the development of Putrajaya, the new seat of the Federal government, since work started in September 1996 stood at RM5 billion with the bulk borne by the private sector.
He said the government had spent RM400 million for the development of public facilities while the rest came from Putrajaya Holdings Sdn Bhd, the developer of the project. He claimed that Putrajaya Holdings Sdn Bhd has obtained RM600 million in loans for the project while the rest from its own funds and the issuance of bonds.
The Chief Executive of Putrajaya Holdings Sdn Bhd. said the government will spend a total of RM2 billion for public facilities like hospitals, clinics, fire stations, district police headquarters, marine police depots, schools and mosques over the period of 12 years from September 1996 when construction began at Putrajaya i.e. about 10 per cent of the total costs of Putrajaya which has been estimated to be in the region of RM22 billion.
It is therefore a great surprise and even shock that the government has come to Parliament for a supplementary allocation of RM686 million for public facilities for Putrajaya, expenditure of which are already being made, well beyond the RM400 million figure given earlier.
This is not only the great discrepancy as to the costs to the government in the development of Putrajaya. According to the supplementary estimates, the government has already spent RM840 million last year for public facilities in Putrajaya. Added the RM686 million now requested in the supplementary estimates for public facilities in Putrajaya, this will mean that barring new supplementary requests later in the year, the government proposes to spend by this year RM1.5 billion for public facilities in Putrajaya - a far cry from the RM400 million as claimed earlier. What is the reason and explanation for such a great discrepancy between RM1.5 billion and RM 400 million?
The government should make a full and proper explanation as to what is the total costs of Putrajaya, how much would be borne respectively by the government and the private sector in the entire development of the Putrajaya project.
The Prime Minister, Datuk Seri Dr. Mahathir Mohamad has defended his latest mega-project in Putrajaya, declaring that the government is building the new government administrative capital for the next 100, 200 and even 300 years.
The RM5 billion which had already been spent so far would have been better spent building low-cost houses to benefit some 250,000 low-income families or free tertiary education to some 200,000 deserving Malaysians.
The Prime Minister's obsession with grandiose mega-projects - which he explained in one interview last year as "being good for the ego" - built for the next 100, 200 and 300 years would burden the present and the new few generations as a result of a most lop-sided sense of priorities.
The Kuala Lumpur International Airport (KLIA), which had been described as another mega-project built for the next century, had been described as "eerily silent" by one recent comparative report of new international airports in the region - with more than half of its capacity unutilised. Many Malaysians avoid using KLIA if they can avoid it, because it is so inconvenient and time-consuming.
The supplementary estimates also smack of being oriented for the coming general elections, to appropriate public coffers to fund the Barisan Nasional's attempt to buy the next election.
Contracts are being awarded without the benefit of open tenders to the benefit of cronies; they in turn will grease the Barisan election wheel; special allocations are being made for projects which now are seemingly " urgent" or justified as contributing to the recovery effort. It is legitimate to ask: why were these expenditures not foreseen? Why cannot these be deferred to until after the General Election? Why is it necessary to appropriate more money when Ministries have been unable to spend their generous 1999 allocations? The Accountant-General’s statements of monthly out lays show large shortfalls and the Deputy Prime Minister along with the two Ministers of Finance have taken to task heads of spending agencies for these large shortfalls. The inevitable conclusion to be drawn is that the Barisan Nasional Government is bent on using public resources to buy its way back to another five years of misrule and further abuse of the nation’s resources.
Until recently, Cabinet Ministers could only award contracts valued at under RM5 million, and that too after clearance from the Treasury. I understand that there is now a new ruling that until 30 November, secretaries-generals can award contracts worth up to RM20 million without tenders called for. Although this is allegedly to meet the people's needs, this is a major setback for openness and transparency and opens the way for gross abuses of power and misallocation of public funds in the run-up to the coming general election.
It is no secret that the construction industry had always been the main provider of campaign funds for the Barisan Nasional in the past elections. It is a known fact that a lot of construction projects, including the North-South Expressway, were handed out to friendly contractors who were willing to play the ‘kick-back’ game involving millions and billions of ringgit going into the political parties’ kitties, enriching a few individuals along the process.
It is clear that the same route is now being taken to collect the Barisan's campaign funds by awarding huge government projects and contracts to the cronies.
It was reported recently that the Government is planning to award the construction of more than 600 schools. I call for clarification as to whether it is true that the jurisdiction to award these school contracts has been taken away from the Works Ministry and given to the Finance Ministry, headed by the first Finance Minister Tun Daim Zainuddin and all these school contracts are being awarded without any tenders - only direct negotiations with the fist Finance Finance Minister. If so, is the Finance Minister prepared to make public the full list of the lucky contractors in keeping with the principles of openness, acccountability and transparency?
It is unfortunate and ominous that the Minister of Information made a statement that none of the facilities of his Ministry would be made available to opposition parties in the forthcoming election campaign, claiming that the opposition had no right to the use of publicly funded facilities as these belonged to the "government." He seems to be ignorant of basic and fundamental notions about the distinction between "government" and the ruling party. He might wish to acquaint himself with the fact that the GOVERNMENT belongs to the PEOPLE – it is not the personal property of the Barisan. This is a basic tenet of governance and of democratic practice. What is even more shocking is the Prime Minister's defence of the statement of his Minister. Is this what the Prime Minister meant when he recently warned that the next general elections would be the "dirtiest" in the nation's history - where the Barisan Nasional government would have no qualms to exceed its past abuses of the mass media, government machinery and resources and the politics of money to ensure victory in the elections?
Let me remind the Prime Minister that democracy is more than going through the motions of balloting. It entails giving the people a free choice between different visions of the nation’s struggles – a free choice based on all of the facts. Democracy demands an informed public. Without these elements, a general election becomes a charade and a sham. The people have the right to hear both the Barisan and the Opposition through radio and television and I urge the Prime Minister ensure that the next general election is "free, fair and clean".
Economic Recovery ?
A famed writer had said :"There are lies, damned lies, and statistics." Ministers on the opposite benches appear to have given new meaning to this celebrated saying. A day does not go by without their grasping at statistics to claim that we have arrived at the Promised Land of Recovery. They are aided and abetted in this fiction by half-truths and even distortions by a controlled media whose mission appears to be to glorify the Barisan and castigate the opposition parties.
Even if in the second quarter the GDP numbers turn out to be in positive territory, it does not mean the Malaysian economy has achieved recovery yet. "Recovery" can only be claimed once GDP has shown positive growth for two consecutive quarters -- something still to be achieved. In fact, Malaysia was the only country that experienced negative GDP growth in the first quarter amongst the countries that were affected by the East Asian crisis.
During the first quarter of 1999, South Korea grew by 4.6 percent, Indonesia by 1.7 percent, and Thailand by 0.9 percent. Malaysia was the only East Asian crisis-hit economy still in recession, with the Malaysian economy contracting by -1.6 percent. The Malaysian economy should be growing again year on year by the second quarter compared to the second quarter of 1998’s -6.8 percent. The tide has risen throughout the region, but Malaysia seems to be lagging behind, with the recovery in Malaysia in 1999 expected to be modest, especially compared to South Korea.
We are constantly being fed the daily dose of "feel good" statistics and interpretations. Claims are made that selective controls have led to export growth. However, it has also been argued that these had nothing to do with export growth. The recorded growth came from the devaluation effects. Furthermore, Thailand, Korea, Indonesia all recorded export growth - in some instances larger than that in the case of Malaysia - without the benefit of selective controls or fixing the parity of their currencies. Malaysian Exports would have grown without controls, perhaps at a faster pace. It must also be noted that world exports have grown – largely because of the sharp increase in the US economy. These factors, and not the efforts of the Barisan account for our export performance.
We are also reminded each day that reserves have gone up. Indeed they have. It however must be pointed out that this outcome is due to two factors - import compression and the padding of reserves through borrowings. Imports have moved little in real terms - reflecting low investment activity, weak consumer demand, and lower imports of intermediate goods used in industrial production.
As another ingredient in the dose of "feel good" medicine, Ministers and their camp followers point to raising sales of houses, cars and consumer durables as indicators of recovery. The nation is provided a false measure of reality. The truth is that such increases as these dubious statistics portray are not mirrored in the production or import statistics. One can only conclude that the increases in sales were out of the bloated inventories, which are now being disposed off at fire-sale prices, and easy credit made available to generate euphoria on the eve of a general election. Industrial Production has increased on a May to May comparison - but this is not the way growth is measured by most analysts. Averaging growth over a 12-month period does the correct comparisons. Unless this is done, the low base (May 1998) provides a distorted and illusionary picture of trends.
The Prime Minister, with great fanfare and in a melodramatic fashion, made public the list of cronies of the former Deputy Prime Minister. It is most significant that the lists were selective and partial and concealed the massing of obscene levels of wealth by members of his very own cabinet
To add insult to injury, some very serious allegations that have been made about the manner in which he shielded his colleagues from prosecution, are being brushed and swept aside. These were acts of corruption under the laws of the land. The role in which the Attorney-General, who has gained famed for selective prosecutions, has played in this is most scandalous, as highlighted by the former Deputy Prime Minister, Datuk Seri Anwar Ibrahim in his police report recently.
In his Police Report with the Dang Wangi Police Station, Report No.
20255/99, Anwar alleged interference of justice by Prime Minister,
Dr Mahathir, Attorney General Mohtar Abdullah and Public Prosecutor
Abdul Gani Patail in shielding Rafidah Aziz, Minister of International
Trade and Industry from being prosecuted in court on five corruption
Anwar referred to a document of the Prosecution Division, Attorney General's Office dated 14 March, 1995 signed by Abdul Gani Patail, which was handed him when he was Deputy Prime Minister by Attorney General, Tan Sri Mohtar Abdullah towards the end of 1995. The document clearly stated there was prima facie basis to prosecute Dato Paduka Rafidah Aziz, the Minister of International Trade and Industry (MITI) on five counts of corruption under Section 2(2),Ordinance 22, 1970.
Anwar said the Attorney General being satisfied with the investigations carried out by the Anti-Corruption Agency was ready to prosecute Dato Paduka Rafidah Aziz. The charges based on the contents of the said document were as follows:
In his report, Anwar said the Attorney General did not proceed with
the charges due to the interference of the Prime Minister,
Dato Seri Dr. Mahathir Muhammad as a result of which the prosecution of
Dato Paduka Rafidah Aziz could not as yet be carried to completion. As
such, the failure to do so in accordance with the provisions of the law
tantamounts to Dato Seri Dr. Mahathir, Tan Sri Mohtar Abdullah, and Abdul
Gani Patail having interfered in the carrying out of justice and acted
against the provisions of the law.
Anwar had appended the document dated 14 March 1995 as proof/evidence and an exhibit item to his Police Report of 9th July, 1999.
For the first time in Malaysian history, a former government leader has revealed to the nation how an attempt to check corruption at the highest level was thwarted by the Prime Minister himself. It shows that the Prime Minister is neither sincere nor serious about fighting corruption. There is no senswe of right and wrong, but just whether a person is unquestioningly loyal to him. The Prime Minister will protect the individual who is loyal to him, however blatant his or her wrongdoing may be. If, on the other hand, a person crosses his path, the Prime Minister r will not hesitate to use every instrument of power at his disposal to destroy him totally - as demonstrated by his vicious, vindictive persecution of Anwar Ibrahim - even getting the police and the Attorney-General's Chambers to fabricate evidence again his foe.
I challenge the Prime Minister to come clean and to appoint an independent prosecutor to go into these allegations and clear his name. The culture of corruption encouraged by this administration has reached levels that the people can no longer tolerate.