Reminder – Bolivia became more corrupt after launch of National Integrity Plan

Speech (1)
- on the 2005 Budget
by Lim Kit Siang

(Dewan Rakyat, Monday): Firstly, let me congratulate the Prime Minister, Datuk Seri Abdullah Ahmad Badawi, for his first budget speech in Parliament  as Finance Minister last Friday. 

It was very well received  by the media, financial and economic commentators but which budget in the past had not received superlative praises immediately after its delivery – even those which were subsequently  repudiated as not made in the national interest. 

Eight days before the budget presentation on Sept. 2, the Kuala Lumpur stock market’s benchmark Kuala Lumpur Composite Index (KLCI) jumped some 18 points during intraday trading following announcement of former Deputy Prime Minister Datuk Seri Anwar Ibrahim’s acquittal by the Federal Court from sodomy charges, reversing earlier losses. 

I am reminded of the international  release of the World  Competitiveness Yearbook 2001 prepared by the Swiss-based business school International Institute for Management Development (IMD) of Lausanne, where Malaysia’s ranking fell four places from 25th in 2000 to the 29th spot. When releasing the WCY scoreboard in April 2001, the Director of the IMD World Competitiveness Project, Professor Stephens Garelli said that factors holding down Malaysia’s competitiveness were “concerns” about the government’s economic policies and the imprisonment of Anwar Ibrahim as well as worries over the eventual change in government leadership. 

Both are reminders that  accountability, transparency and good governance, such as a truly independent judiciary and a just rule of law, are major factors in determining a nation’s economic health and international competitiveness. 

Call to Parliament to review and rescind six-month suspension of Karpal Singh  for good name of Parliament and nation’s international reputation 

September 2, 2004 should go down in Malaysian  history as a historic date when the country took the first important step to  turn back from more than one-and-a-half decades of relentless undermining of independent institutions and organs of state, including the fundamental constitutional principle of the separation of powers among the Executive, Legislature and the Judiciary, creating a multiple win-win situation to all the important stakeholders of the Malaysian society. 

But this was not to be, for five days later, on Sept. 7, the “feel good” euphoria that the country has made a critical turn towards accountability, transparency and good governance was punctured with a naked and brutal display of Lord Acton’s maxim “Power tends to corrupt, and absolute power corrupts absolutely” when the nine-tenth parliamentary majority of the ruling coalition suspended DAP MP for Bukit Glugor Karpal Singh not only on a most trivial matter, but against the most elementary notions of justice.  This was because all the six members of the Committee of Privileges had unanimously agreed that Karpal had neither been guilty of making a false statement nor misleading Parliament at their second meeting on July 10, but this did not prevent five of them from complying with a directive originating from outside  the Committee that Karpal must nonetheless be punished with a 10-day suspension with apology or six-month suspension without apology. 

This issue concerns not just Karpal, but national and international confidence in accountability, transparency and good governance, including the system of justice,  in Malaysia - with direct bearing on our national economic well-being. 

Just as the Federal Court has announced that it has powers to review its decision on Anwar’s earlier corruption conviction, Parliament must seriously review and rescind its arbitrary, high-handed and undemocratic six-month suspension of Karpal, not just for the sake of Karpal but even more important for the good name of Parliament and international reputation of the nation  that the world, in particular foreign investors, can  trust Malaysians in their innate sense of justice and fair play in the conduct of all transactions – whether financial, economic or international. 

Major letdown - three areas s Abdullah’s maiden 2005 budget  should be different from previous Mahathir budgets? 

Abdullah started his maiden budget speech reiterating that his government is committed to fulfill all promises made in the Barisan Nasional manifesto. One important reason why the Barisan Nasional could win an  unprecedented general election victory is the new Prime Minister’s pledge of a clean, incorruptible, accountable, efficient, people-oriented government which is prepared to listen to the truth from the rakyat. 

This was why, in  the most chaotic, confusing, unfair and disgraceful  general election in the 46-year history of the nation, the Barisan Nasional had won a  nine-tenth parliamentary majority  as Abdullah has promised change and reform of the system of governance after more than two decades of darkness for democracy and good governance  under the  previous  premiership. 

In the circumstances, Malaysians and MPs are entitled to ask – how is Abdullah maiden budget, the 2005 budget, different from the previous budgets, in particular from the three budgets from  2002 to 2004 which were all presented by Tun Dr. Mahathir Mohamad as Finance Minister. 

Can any Minister, Deputy Minister, Parliamentary Secretary or MP point out how is Abdullah’s first budget different from the last  three budgets presented by Tun Dr. Mahathir, in expressing the hallmarks of the 2004 general election pledge of a clean, incorruptible, accountable, efficient and people-oriented government and dedicated to the slogan of “excellence, glory, distinction”? 

Most of the things which are stated in the 2005 budget are also to be found in the budgets of recent years, including its four strategies, viz: 

  • Enhancing the effectiveness of government financial management, efficiency of the delivery system and competitiveness;
  • Accelerating the shift towards a higher value-added economy;
  • Developing human capital as a catalyst of growth; and
  • Ensuring the well-being of the rakyat through improving their quality of life.

Recent budgets, like the 2005 budget, also dealt with issues like domestic private sector as the engine of growth, stimulating the services sector;  promoting Malaysian industries in the global market;  priority to education, Research and Development (R & D) , health and tourism;  modernization of the agricultural sector, in particular programmes to increase food production, to make it the third engine of growth; etc. 

What are the outstanding characteristics which make the 2005 Budget stand out and different from previous budgets, or are they fundamentally the same  – and is the promise of change,  reform and a major shake-up in the system of governance as pledged by Abdullah in the recent  general election and when he became Prime Minister last November proving to be a mirage and illusion? 

I would have thought that in at least three objectives, the 2005 Budget will distinguish  itself from previous budget presentations, by making clear, unqualified  and unequivocal commitments viz 

  • Root  out corruption;
  • Accountability, transparency and good governance, freeing the government from the cult of secrecy, ushering in a freedom of information regime and a free and independent media so that the government could hear truth and informed opinion from the rakyat.
  • Upholding  the separation of powers among the executive, legislature and judiciary by  giving full support to parliamentary reforms and modernization as well as restoration of national and international confidence in a truly independent judiciary and a just rule of law.

Apart from the reference in Para 26 about the Special Cabinet Committee on Integrity of Government Management to “ensure that all government departments and agencies give due attention to audit reports by the Auditor General”, there was only one miserable mention of corruption. 

Bolivia became more corrupt after launch of National Integrity Plan in 1998

A Cabinet Committee on Ethics and Integrity had also existed under the Mahathir administration under one name or another, but it had never been known to make any impact on government integrity and was completely impotent to check the plunge of Malaysia’s ranking in the Transparency International Corruption Perception Index (CPI) in the past nine years from 23rd  position in 1995 to  37th placing in  2003. 

The sole  miserable mention of corruption  is Para 40 of the 2005 Budget, viz: 

“40.  Priority will be given to promoting ethical values and governance as well as curbing corruption. To enhance the level of national integrity, the National Integrity Plan (PIN) was launched in April 2004.  PIN is not only designed for implementation for the public sector, but should also be adopted by the private sector. To monitor its implementation, the Malaysian Institute of Integrity as been established with an allocation of RM6 million.” 

I find this a great letdown, as one important aspect Malaysians are expecting to see a major difference between the present and the previous Prime Minister is the commitment and political will to fight corruption. 

The drafting and launching of a National Integrity Plan does not per se make a country clean and incorruptible or set it on the path to greater integrity, as many countries and institutions have become more corrupt despite the launch of a national integrity plan or code of ethics. 

Bolivia is one good example.  It launched a National Integrity Plan in 1998, when a survey showed that 80% of the Bolivian population thought that corruption was the most serious problem in the country.

Bolivia’s was ranked in the 69th position in the Transparency International CPI 1998, with a CPI score of 2.8 (with 10 being highly clean while 0 highly corrupt). Five years after the launch of its National Integrity Plan, Bolivia’s ranking and score in the Transparency International CPI 2003 had both slipped further to No. 106 with  a CPI score of 2.3.   

Malaysia should not end up like Bolivia with corruption becoming more widespread and deep-rooted despite the launching of a National Integrity Plan and more anti-corruption expenditures. 

We already  had one  such example, the Judges’ Code of Ethics 1994, which  was not only a dead letter but became a farce when the Lord President   responsible for drafting and launching it was also the person responsible for the most unethical judicial misconduct, plunging public confidence in the independence, impartiality and integrity of judges to an all-time low. 

I find it unthinkable that the body to  monitor the implementation of the National Integrity Plan – the masterplan to  combat corruption and create a new culture of integrity with zero tolerance for corruption – is an insignificant Malaysian Institute of Integrity, which will get an allocation of RM6 million for its establishment.   

During question time on the National Integrity Plan   this morning, I had asked how the Malaysian Institute of Integrity could play the role to monitor the implementation of the National Integrity Plan when all it could do is to conduct studies on  public perceptions about national integrity in the country, when what is urgently needed is to ensure the implementation of a blueprint to root out corruption and create a new political culture of public integrity with zero tolerance for corruption.  The right and proper body to monitor the implementation of the National Integrity Plan would be a high-powered organ, such as a  Parliamentary Committee on National Integrity,  to spearhead a national campaign against corruption, monitor progress of the National Integrity Plan and exercise oversight responsibility over the Anti-Corruption Agency (ACA).   As usual, there was no coherent answer from the Deputy Minister in the Prime Minister’s Department, , Datuk Kayveas, who was handling the question. 

In August last year, DAP had presented a memorandum to the Director-General of ACA , Dato’ Zulkipli bin Mat Noor, suggesting that the ACA should accept the challenge of the former Prime Minister Tun Dr. Mahathir and draw up a 10-year Anti-Corruption Action Plan to compare with Finland and be ranked among the world’s five least corrupt countries in the annual Transparency International Corruption Perception Index by 2013 .

At the Transparency International Malaysia National Integrity Medal award ceremony on 28th June 2003  to honour posthumously Tun Dr. Ismail Abdul Rahman, Tun Tan Siew Sin and Tun Ismail Mohamed Ali for their unquestionable integrity  throughout their services to the nation,  Tun i Dr. Mahathir made the  startling confession about one  major downside of  his 22-year premiership. 

 He lamented that the country had “seen a steady deterioration and erosion of ethical standards of behaviour in both the public and business sectors, with predictable consequences for sustainable human development, not only here in Malaysia, but unfortunately in many of the countries we look up to”. 

Dr. Mahathir sought to justify why no “sharks” of corruption had been arrested and punished during his long premiership by challenging the belief that the “big fish” must be caught while the “minnows” were considered unimportant, contending  that this  was wrong as the culture of corruption began with the minnows. He said: “Besides, when corruption is tolerated among the minnows, the big fish are encouraged and society accepts the practice, and it becomes a culture.”  

This was a weak and even  pathetic excuse for the lack of ACA action against the “big fish” during the past two decades, and totally contradictory to the promise made by Datuk Seri Anwar Ibrahim when he was Acting Prime Minister in the two fateful months in 1997 when shepherding  the Anti-Corruption Bill 1997 with the pledge to the nation: "Now is the time to act…we will catch the big ones and we will catch the small ones". 

Ironically and tragically, the only “big fish” to be caught during the 22-year Mahathir premiership was  none other than Anwar Ibrahim himself, who was convicted and jailed for six years for a corruption offence which did not involve a single sen or had anything to do with any monetary or material consideration whatsoever! 

During the first major financial scandal of the premiership of Dr. Mahathir, the RM2.5 billion Bumiputra Malaysia Finance scandal which caused the murder of an up-and-coming, young, conscientious and model management  executive, Jalil  Ibrahim, the Prime Minister  made the prophetic comment that it was “a heinous crime without criminals” – as since then, the “heinous crimes” of financial scandals had continued to increase in  scale reaching tens of billions of ringgit but all completely  “without criminals”! 

The tradition and culture of “heinous crimes without criminals” is an indictment on the effectiveness, efficiency, independence and professionalism of the ACA to combat corruption, abuses of power, criminal breach of trust and all forms of deviations.

The ACA should end its target-less Vision, Mission and Objective and rise up to the challenge for a corruption-free Malaysia comparable with Finland.

In his speech at the Transparency International Malaysia National Integrity Medal award ceremony, Dr.  Mahathir said that Malaysia must compare its public behaviour with Finland, which came out as the world’s least corrupt and most ethical country in the past three years  in TI’s CPI. 

He said: “I know we have some way to go, but given the level of public support the Anti-Corruption Agency now enjoys, and the wide-ranging anti-corruption measures now firmly in place, we can get to be among the highest ranking countries.” 

Dr. Mahathir’s belated recognition and commendation of TI was  all the more pertinent  as in the past seven years, Malaysia’s ranking on the TI’s CPI had  fallen well below the original 23rd placing, viz. 23rd in 1995, 26th in 1996, 32nd in 1997, 29th in 1998, 32nd in 1999,  36th in 2000 and  2001,   33rd in 2002 and 37th in 2003. 

In contrast, Finland has been able to maintain its position as among the world’s  least corrupt nations, positioned in the fourth  place  in 1995 and 1996,  moved up to second place in  1997, 1998 and  1999,  and from 2000, ranked first as the least corrupt nation in the world   for four  consecutive years to  2003.   

At the  Ethics and Integrity Conference last August, Abdullah who was then the Deputy Prime Minister  had declared that the government possessed ample political will to ensure that the scourge of corruption was eradicated in both the public and private sectors, that “"Nothing else will do" as the Government had “zero tolerance for corruption”. 

With such public commitments by both the Prime Minister and the Deputy Prime Minister for a corruption-free Malaysia by last June, DAP submitted a memorandum  to the  ACA that it  accept this challenge to draw up a 10-year Anti-Corruption Action Plan to compare with Finland and be ranked among the world’s five least corrupt countries in the annual TI CPI by 2013, with progressive targets set for the intervening period, such as:  

  • To be ranked among the 25 least corrupt  nations by end of  Eighth Malaysia Plan in 2005;
  • To be ranked among the 15 least corrupt nations by Mid-Term Review of Ninth Malaysia Plan in 2008;
  • To be ranked among the 10 least corrupt nations by end of Ninth Malaysia Plan in 2010; and
  • To be ranked among the five least corrupt nations by 2013

It is most disappointing however  that we have as yet to see the political will to really root out corruption, especially in high political places.

Why has the National Integrity Plan come out with the very modest five-year target from 2004-2008 to improve Malaysia’s 37th  placing in the Transparency International (TI) Corruption Perception Index  (CPI) 2003 to 30th place, i.e. improvement of seven placings in five years – when we fell 14 places in nine years from 23rd ranking in 1995 to 37th placing last year in the TI CPI?

Even if we the government is wary of the DAP proposal for a ten-year action plan for the country to be ranked among the world’s five  least corrupt nations in the annual TI CPI, the least that a government committed to clean, incorruptible, accountable and transparent administration should seek to restore Malaysia’s TI CPI ranking in 1995 in five years – i.e. to be ranked 23rd in the TI CPI by 2008!

As I asked during my supplementary question this morning, political will to have a no-holds-barred war against corruption is singularly lacking, particularly after the landslide Barisan Nasional general election victory in March, as could be seen from the failure to net anyone of the 18 “high profile” corruption cases.

Deputy Minister Kayveas had implied that my reference to 18 “high profile” corruption cases had been baseless, when he should know that it was a Cabinet Minister, then Minister in the Prime Minister’s Department, Datuk Seri Dr. Rais Yatim, who made the revelation in February this year.

Malaysians are entitled to know why not a single one of these 18 “high profile” corruption cases had been nabbed  and brought to court – and  whether this is proof of the absence of political will to back up the rhetoric to eradicate the scourge of corruption – which means that the National Integrity Plan will finally be a toothless one, and Malaysia may follow the footsteps of Bolivia, of a country where the launching of a National Integrity Plan could not check the cancer of corruption.

I am still waiting, for instance,  for a proper explanation for the Barisan Nasional full-page advertisement in the Chinese press during the March general election confessing that the Barisan Nasional government was “corrupt and rotten” to the very core and asking the voters to support the new Prime Minister to become a modern-day Justice Pao.  The Minister in the Prime Minister’s Department, Datuk Seri Nazri Aziz had misled Parliament when he had replied to me in May that the Barisan Nasional government had not authorized such an advertisement, and I hope that Parliament and the country would be given the correct picture.

I want only to say that if Abdullah is indeed a modern-day Justice Pao to stamp out corruption, it would not be 18 “high profile” corruption cases who would be nabbed and prosecuted in court, but hundreds of such “high profile” corruption cases.

The 2005 Budget Will Only Be A "Small Man's" Budget If Substantial Tax Deductions Are Offered For Education And Health Requrirements And Address The Problems Of Small Businesses Left Out By The 8% Economic Growth

The 2005 Budget will only be a "small man's" budget if substantial tax deductions are offered for education and health requirements and also addresses the problems of small businesses left out by the 8% economic growth. Even though the BN-controlled media have lauded the Budget as a small man's budget, only the civil servants and security personnel are the main winners.

As for the ordinary man in the street, the 2005 have not brought any significant gains to his educational and health needs. Based on the Government's 2005 Federal Government's Revenue estimates, the direct tax benefits for the poor man amounts to only RM 4.3 million (RM 2.2 million from the increase in tax rebate for computers by RM100 and RM 2.1 million from the increase in tax relief by RM 200 for the purchase of of books).

Increasing Tax Relief Per Child

The RM94 million from the RM 1,000 increase in tax relief for insurance and EPF payments is helpful but does not make a significant impact towards the educational needs of ordinary families. A more effective measure is to:

  • increase the tax relief of an unmarried child below 18 years old by 50% from RM 800 per child to RM 1,200 per child;
  • increase the tax relief of an unmarried child above 18 years old studying in Malaysia by 50% from RM 3,200 per child to RM 4,800 per child;
  • make the tax relief of an unmarried child above 18 years old studying overseas (presently only RM800 per child) be the same as those studying in Malaysia to RM 4,800 per child; and
  • increase the tax relief for medical insurance to RM 3,000-00.

There is no reason why there is discrimination between children studying locally and overseas as they are still students. The government must remember that most students prefer to study locally as it is cheaper. They are forced to study overseas only because they can not places despite securing excellent results.

Channelling Some Of The Extra RM 291 Million Sin Taxes To Alcohol And Smoking-Related Diseases

The Government is expected to collect an extra RM 291 million from the increase in excise duties of alcohol and liquour. Since those who smoke and drink have to pay more, the government should channel a major portion of the RM 291 million collected to alcohol and smoking-related diseases such as lung and liver diseases. It is only fair that there is some assistance for their health problems later when smokers and drinkers have paid extra for smoking and drinking.

Is The 8% Economic Growth A Prosperless Growth?

For the first time there is no feeling of well-being despite the government's announcement of good 8% economic growth in the second quarter. Ordinary Malaysians can not understand this "prosperless" growth unlike in the past a great sense of "good times" when there is an 8% economic growth.

That is why the government should not discriminate in its issuance of loans. The government should open up the RM2b allocation for the New Entrepreneur Fund to promote new productive capacity limited to bumis to all Malaysians. It should also allow the 4.5b allocation for Small Medium Enterprises in both export and domestic oriented sectors to be used to search for new markets in future emerging markets like China and India.

The government should make more efforts to help all Malaysians who feel prosperless despite the 8% economic. Questions have been asked whether leakages from the economy such as corruption and mismanagement has caused ordinary Malaysians to lose out. Despite the Prime Minister's emphasis on wiping out corruption, there is still an increase in overall deficit of state governments (where extensive corruption occurs) to RM1.71 billion, the frequent exposes in Auditor-General reports where medicines are bought at 36% above market prices by the Health Ministry even though there is an open tender, unresolved scandals like Perwaja and the failure of Tenaga Nasional Bhd to collect hundreds of millions of ringgit owed more than a year from a few companies.

At a time when even a 8% economic growth is prosperless to some, DAP urges the government to be careful in its proposed implementation of a Goods and Services Tax(GST). A GST can have a direct impact on the price of basic necessities bought by the poor. With a GST, even if the poor need not pay any income tax, they are paying an indirect tax through the GST.

Furthermore, can the Internal Revenue Service(IRS) cope with all the extra filling of forms when it is already facing problems with the implementation of the Self-Assessment system for income tax this year? When a simple matter like timely refunds of taxes within a month requires personal attention of the top government leaders, questions are raised about the IRS ability to cope. The government should not fix a time frame but ensure first that all the problems can be worked out and that the poor will not lose out before deciding when to implement the GST.

Substantial cost savings can be obtained from successfully combating corruption. Sadly, corruption at the local government or state government has not improved.

Making local government more accountable and democratic would greatly help in fighting corruption. The time has come to restore local government elections banned in 1965 because of the Indonesian Confrontation. There is no reason why local councillors can not be elected when the Prime Minister has to be elected by the people. The time has come to restore democracy and allow the people to elect their own local councillors again after 40 years.


* Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman