PUBLIC ADMINISTRATION REFORM IN MALAYSIA
(By Van Ngoc - Adapted and translated from the book entitled, “The Malaysian Bureaucracy - Four Decades of Development”)
Administrative improvements and reforms in Malaysia have been taking place in the public service since the early sixties, a few years after Merdeka (Independence). From the most mundane reforms such as name-tags to quality systems and advanced information technology, administrative reform has continued to develop and strengthen over the years. Credit should be given to the indigenous post-Independent government for its approach to implementing administrative changes led by such figures as Tun Abdul Razak and Dr. Mahathir.
This paper gives an overview of administrative reforms in Malaysia in the past four decades: between 1960 and the present time.
THE SIXTIES
The decade began promisingly. With more funds now available, the Government began a systematic programme of socio-economic development. It first turned its attention to rural development, aiming to upgrade the standard of living and economic status of the people to be on par with that of the urban population. Programmes focused mainly on the provision of basic infrastructure such as roads, bridges, schools, health clinics, water supplies, electricity, irrigation canals, agriculture marketing facilities as well as other small projects at the grassroots level.
It was a massive programme, which required a new management approach. The Government introduced the Red Book system to enable the administrative system to respond quickly and efficiently to the increasing demands of rural development. The system attempted to effectively mobilise human and other organisational resources in order to produce and translate ideas into project proposals for higher-level approval and subsequent implementation. This bottom-up approach aimed to create a solid partnership between the Government and the rural people. It was a radical departure from the standard public administration procedure that civil servants had been used to.
The Government reforms promised development and stability for the people of Malaysia. The launch of the First Malaysia Plan (1966-1970) placed a new emphasis on various aspects of development for a stronger, growing Malaysia. The Government saw the need to improve the administrative machinery as a means to carry out the expanded programme and increase responsibilities.
The Montgomery-Esman Report was accepted by the Government and led to the establishment of the Development Administration Unit (DAU) in the Prime Minister’s Department with specific terms of reference stipulated. The terms were to bring about reforms through the introduction of modernisation programmes in four priority areas: planning, budgeting and financial management system of the Federal Government; personnel management and civil services at the federal level; organisational structures and management methods pertaining to government ministries and operating agencies; and land and local government administration at the state level. In the next few years DAU undertook several studies and introduced a number of reforms under the concept of the development administration within its terms of reference.
The next major proposal of the Report was the improvement of the government’s education and training programmes for all levels of the civil service. One such programme was a graduate study programme in development administration in the University of Malaysia for the post-entry of MCS officers. Mid-career university-level education would also be provided to professional cadres. Expanded in-service training facilities for technical and clerical staff were also envisaged as well as periodic staff seminars for high-ranking officials.
For the proposal’s implementation, the Government set up the Training and Career Development Division in the Public Service Department and expanded the training budget. The Government accepted the importance of large-scale formal training in public administration and management for the majority of civil servants as opposed to relying on “on-the-job” training as in the colonial tradition. This was a fundamental shift towards strengthening key areas within the public service.
Another major shift taken by the Government at this time, related to the Report was the curtailment of powers of the Public Service Commission (PSC) on promotion. Citing the interest of efficiency and the public service, the Constitution was amended to the effect that the authority for promotion from then on came under the supervision of the Government. The PSC however, became the appellant body in the case of Division One officers. Since it appeared that impartiality would be affected by the amendment, the Public Service Department established promotion boards in which interested parties were not represented or had only a minority vote.
One way for reforms to be instituted in the public service was indirectly through the appointment of a commission or a committee on salary revision. The Suffian Report which was accepted by the Government in 1967 was no exception. Besides upward salary revision, more uniform and fewer salary scales and fewer anomalies, the Report introduced a new incentive, namely, the availability of housing loans to government servants at a low interest rate. The response from government servants and from the many sectors involved in housing construction was tremendous. This triggered the housing revolution in the country which led to a number of reforms in areas including land management and local authority administration.
THE SEVENTIES
The Government formulated and launched the New Economic Policy (NEP) with the twin objectives of eradicating poverty regardless of race and eliminating the identification of race with economic functions. The Government set itself twenty years to bridge the disparity. The decade, therefore, began with resolve and hope.
The NEP was public sector-driven. New instruments of government were created: Urban Development Authority (UDA), State Economic Development Corporation (SEDC), State Agriculture Development Corporation (SADC), Pahang Tenggara Development Authority (DARA) and other regional authorities, and many more. Existing ones were redesigned and revamped such as Majlis Amanah Rakyat (MARA), Institut Teknologi MARA (ITM), Malaysian Industrial Development Authority (MIDA), and Malaysian Industrial Development Fund (MIDF). With the development of these authorities and public enterprises, the Government thus entered the private sector domain. They were mostly headed and staffed by civil servants, many not used to the less rigid ways and profit-driven motives of the private sector. It was a new role for the Government and its employees that managed the enterprises towards achieving the NEP objectives.
Aside from public enterprises, the Seventies were also devoted to the implementation of massive education and training programmes involving civil servants, university teachers, research staff and school leavers on a scale unprecedented in the history of the Malaysian civil service. This programme had twin objectives: to increase the capability of the civil service and to increase the number of qualified or trained Bumiputras in the Government service. The Public Service Department, Ministry of Education, State Governments and their educational foundations, MARA, Petronas and the universities, all participated actively in this human resource development process.
The Government also expanded the National Institute of Public Administration (INTAN) in the early seventies. This was not only through enlarging its size and courses offered, but, according to its Director at the time, all activities related to training were reviewed and updated including course content, programme designs, and periods for training. Its role was meant to be not only as a training institution but also as a change agent within the context of the development administration. INTAN began producing a large number of trainees from its varied programmes from Diplomas in Public Administration to in-service courses.
The system of public services continued to be strengthened during the mid-seventies when Dr. Mahathir Mohamad held a new position in the Government. One of his first initiatives was the establishment of a new administrative arm to spearhead government modernisation- the Malaysian Administrative Modernisation and Manpower Planning Unit (MAMPU) located in the Prime Minister’s Department. Early reforms targeted administrative improvements in agencies whose clientele were the public at large, such as government hospitals, Departments of Road Transport, Immigration and Registration. MAMPU devised an orderly and efficient system at these counters with the participation of the agencies involved and support of central agencies and ministries concerned. The waiting room was made client-friendly with ample seating capacity and an electronic number system for people waiting to be served. Studies revealed that waiting time and actual time taken for service completion reduced significantly with this new system.
The most popular measure for the public was the introduction of a one-stop agency where bills could be settled at one place, usually the Post Office. From the late seventies onwards, government agency service counters developed into systematic, efficient, professional and orderly systems.
Besides the counter system, MAMPU also initiated and streamlined measures to enhance the quality of work of individual staff and organisations. These included desk files, work procedure manuals, work action files and quality management. Routine organisational issues developed into more complex ones.
It was at this time that the Government, on the recommendation of MAMPU, introduced the individual Excellent Performance Award which provided motivation and incentives to staff, encouraged competition, and thereby increased productivity of the individual in the workplace and the agency as a whole. The reward itself was simple, consisting normally of a certificate or plaque and an extra week of leave. This would be entered into the person’s Service Record to support possible promotion in the future. The Excellent Performance Award was without doubt, the single most motivating factor for enhancing productivity. It was a forerunner to other recognition awards in the coming decades for the performance of individuals and agencies in public service reform and innovation.
The salary scheme of the public service was again revised towards the end of the decade. The most significant revision apart from the standard salary up-scaling, was the extension of the pension scheme to beneficiaries of a retiree after his/her death: to his/her widow for life, and to his/her children until the age of eighteen years or twenty-one in the case of children attending college.
The new pension scheme required an improvement to the administrative machinery of the Pension Division in the Public Service Department. The Division had long been criticised by pensioners for delays in providing their first pension and even subsequent ones. A review of the process was therefore carried out. Under the revised procedure, as long as pension papers were in order and submitted according to the specified time schedule, the pensioner was assured of receiving the first pension within two months of retirement. Normally pensioners receive their gratuities on the day they retire; this can sustain them far longer than the said two months.
Other aspects of the delivery system have been improved from time to time such as payments through banks instead of warrants, and special procedures for the sick and ailing. There have been hardly any complaints about delays even though the number of pensioners and dependants has shown a marked increase since the expansion of the scheme.
Towards the end of the seventies the Government decided to establish a Public Complaints Bureau (PCB) whose functions are similar to those of an Ombudsman. The PCB is placed under the highest office in the land, the Prime Minister’s Department, with its Steering Committee chaired by the Chief Secretary himself and members including the heads of the Public Service Department, Attorney General Chambers, the Police, the Treasury and the Anti-Corruption Agency. The high authority of this committee means speedy handling of any disciplinary action or provision of any additional resources required that may arise from the investigation.
THE EIGHTIES
The decade of the eighties witnessed a change of leadership at the highest level of government when Dr. Mahathir took over as Prime Minister. His tenure since 1981 signaled a dynamic change in government administration, very different from his predecessor. Under his administration, a series of policies and actions initiated a new dimension in Malaysia’s political and socio-economic development and highlighted the need for a civil service that must work closely and in tune with the political leadership in all aspects of government operations.
Mahathir’s administration began simply enough with the wearing of name identification tags by government servants of all ranks and the introduction of the punch-card system. The Prime Minister set the example by doing both and, in the case of the latter, arriving early and leaving late. The wearing of name-tags may appear minor in terms of reform, but it signifies to the wearer that they are members of the government and as civil servants, should act and behave with dignity. The punch-card system signifies a professional approach within the public service and highlights the value of time and punctuality. This was quickly followed by a string of other administrative measures such as management of meetings and leadership by example.
The decade of the eighties is recognized as the beginning of the industrialisation stage of the country. From this period onwards the country depended less on agriculture and primary products for wealth and relied more on the fast-growing industrial and service sectors. For its part, the Government invested considerably in heavy industries, notably the national car and steel projects. It also spent significant funds on infrastructure such as highways, ports, telecommunications and industrial estates.
To attract investors and promote the country as a whole, trade and investment missions were sent abroad, offering generous incentives. State visits by the Prime Minister emphasised investment opportunities in Malaysia and his entourage usually included corporate figures.
With the assistance of MAMPU, administrative processes were streamlined and shortened to the bare minimum. At the State level, the formation of one-stop agencies or technical committees consisting of relevant departments seemed to be the answer to the common complaint that an investor had to run around to seek clearance from too many authorities. The public sector adjusted itself to the country’s industrialisation status and to the increasing role of the private sector as the engine of growth.
The public sector had became too large because of the many public enterprises formed for the implementation of the New Economic Policy in the previous decade. The cost for providing infrastructure for the industrialisation programmes had been high and had continued to rise. There was also the urgent need to overcome domestic economic problems as a result of global economic slowdown in the early eighties. The Government, therefore, launched the privatisation policy in 1983. It was a form of development implementation strategy whereby activities that traditionally rested with the public sector were transferred to the private sector. In the 1980’s about 20 major projects were privatised under various methods. Among them were: (1) Sale of equity; (2) Sale of assets; (3) Lease of assets; (4) Management contract; (5) Build-Operate-Transfer (B.O.T.) and Build-Own-Operate (B.O.O.); and (6) Management-buy-out.
Privatisation helped to achieve the objective of reducing the financial and administrative burden of the Government as well as improving efficiency and productivity. Eventually Malaysia became a model for other countries. Privatisation is, therefore, a radical and a successful administrative reform measure though it has had its fare share of critics in later years.
Besides privatisation, there were two other policies in the eighties which brought fresh perspectives to Malaysian management. The first launched in the early 1980’s, was the “Look East” policy in which Malaysians, while taking the best from the West, were encouraged to look East to the work ethics and culture, among others, of the highly successful Japanese and (South) Koreans. In the field of education and training, the Government has been sending a number of Malaysians including senior civil servants, to the two countries.
The second policy was “Malaysia Incorporated” which was announced towards the end of the decade. Malaysia Incorporated was based on the premise that successful national development required public-private sector collaboration and cooperation and adherence, and the perception of the nation as a corporate or business entity jointly owned by both sectors. The policy has been implemented in various ways through consultative panels between the two sectors to exchange information and promote understanding as well as through training programmes in INTAN, department training institutions and the State Governments. The Government also facilitated the private sector’s international trade. This smart partnership between the private and the public sectors worked very well in the privatisation exercise. It was a policy very much tested during the economic downturn when the public sector had to come to the assistance of those in the private sector who were badly affected by it.