Closing 2021: Reflecting on the Dire State of the Nation
By Dr Rais Hussin, Dr Margarita Peredaryenko, Ameen Kamal
As we move closer to the end of 2021, it is helpful to reflect on the current state of the country and critical national issues to develop course-correction measures to stay on track towards being a prosperous nation. Unfortunately, careful observation and unbiased analysis suggest poor governance and corruption as the key underlying theme, and a leading cause of many pertinent issues in Malaysia, shifting our trajectory towards a failed state.
Endemic of corruption and poor governance
According to Transparency International Malaysia (TI-M) and World Bank estimates, since 2013, Malaysia has been losing close to 4% of its Gross Domestic Product (GDP) annually. Based on GDP data, this comes to RM40 — RM60 billion on an annual basis, which could still be underestimated given the high number of corruption cases in Malaysia that remain unresolved.
On top of that, it was reported that Malaysia lost RM1.8 trillion through illegal financial flows from 2005 to 2014, stemming from corrupt practices (equivalent to losing RM 180 billion annually over ten years).
Instead of creating jobs, wider aids to the needy, more comprehensive support to the small businesses, improving healthcare, building more resilient infrastructure (including flood mitigation), these precious people’s money disappear through worthless activities, and into the pockets of corrupt people and criminals.
This “multi-level-marketing” structure of money politics firmly upholds the system of patronage politics, creating self-reinforcing machinery that not only embraces but even protects this corrupt ecosystem, from leaders (in politics, public service, and private sectors) cascading down their reporting line.
Pervasiveness of poor governance and corruption behave like cancer at terminal stage causing multiple system failures plaguing the nation and killing it from within.
We have seen reports of cartels that controlled RM3.8 billion worth of Government projects, Halal meat cartel feeding innocent Malaysian Muslims with only-God-knows-what kinds of meat, drug cartels moving RM 5.2 billion worth of drugs (simultaneously making money off the people they are destroying, and destroying Malaysia’s youths, i.e., future foundation), price-fixing cartels among companies handling export/import cargo at Port Klang, immigration cartels at immigration department issuing work passes, and also even grant cartels.
We have also seen reports of syndicates reportedly involving local and foreign secret societies, and most worryingly, in cahoots with local law enforcement.
All of this is a significant breach of trust between the people and the authorities, widening the pre-existing distrust between the people and the Government, exacerbating the already-degrading national cohesion and unity.
There is no Rule of Law without separation of powers
Even if we were to adopt the best technologies to overcome corruption (through digitalisation etc.) with well-defined laws, its effectiveness and reliability are in question if there is collusion between authorities and government branches, particularly between the executive and judiciary.
For example, lessons from the handling of the 1MDB mega scandal and the alleged corruption cases related to the undersea tunnel project in Penang indicate a serious lack of separation of powers on all sides of the political divide.
There must be a clear separation of powers and empowerment through independent appointment mechanisms, with independent and sufficient budgets. The same applies to oversight bodies for more effective checks and balances. Without this, even
the best technologies, systems, and laws can be bent – depending on who is in power.
Poor National Security status
Consequently, poor management, weak policy implementation, and Governance issues lead to alarming vulnerability of many aspects of national security. These are fundamental or core aspects that Malaysia cannot afford to compromise.
In the following sections, EMIR Research highlights ten essential areas under serious threat.
1. Military security: Internal weaknesses, such as widespread corruption, leave Malaysia vulnerable to external threats. As reported by TI-M, Malaysia scored 45% and received a “D” rating in the Government Defence Integrity Index (GDI) for 2020. Reports also indicate deep cartel infiltration in law enforcement agencies.
None of this is surprising with the prevalent culture of “cash is king”, be it from corrupt politicians, syndicates, or perhaps even foreign intelligence agencies. If anyone can be bought, security is an illusion – real only for the highest bidder.
2. Food Security: A global crisis such as the COVID-19 pandemic has exposed Malaysia’s vulnerability in food security when imports were halted, depriving Malaysia of its staple foods. Even for rice, Malaysia only produces roughly 70% of the total demand internally.
According to the Department of Statistics Malaysia (DOSM), the total food imports for 2013 were about RM43 billion, over RM51 billion in 2019, and significantly jumped to RM55 billion in 2020.\
According to the National Agrofood Policy 2021-2030 (NAP 2.0) policy document, chicken/duck meat and chicken/duck eggs are the only agrofood commodities that managed to retain a self-sufficiency level (SSL) of 100% from 2010 to 2020.
The above figures combined with the Global Food Security Index (GFSI) score support experts’ view of food security not being the Malaysian government’s focus area and priority and the absence or insufficient food security strategy for years. In fact, Malaysia has been receiving a zero score on this GFSI measure from the food security experts for years, from 2012 to 2020.
On a related note, these policy issues are made worse by the recent increase in food prices, which brings us back to the problem of corruption, food cartels, profiteering middlemen, and so on.
All of this places a serious question mark on our country’s ability to face growing population, reduced arable land, pollution of waterways and water resources, soil nutrient loss, increased public awareness on health, climate change issues, and even future pandemics and global crises.
3. Water security: GFSI 2021 also shows Malaysia scoring “very weak” (at a mere 18.5%) in the “oceans, rivers and lakes” indicator, as well as receiving a qualitative rating of zero for a sub-indicator on eutrophication (enrichment of a body of water with nutrients, causing negative ecosystem change such as depletion of aquatic life and the worsening of water quality) and the highest risk rating of 5 for the “agriculture water quality risk” indicator, against a world average risk rating of 3.3.
These ratings reflect Malaysia’s reality well with its persistent water pollution from industries causing frequent water disruptions. The small fines are equivalent to a “pay to get away” scheme similar to the general culture of handling certain high-profile figures and their court cases in Malaysia.
However, as more and more of our rivers transform into polluted status, Malaysia’s ability to produce food would be critically impaired, given that 70% of the water resources in the country are for the agricultural industry.
4. Disaster Management: The recent flood has exposed a glaring gap in Malaysia’s disaster management and how the existing essential structures are not disaster-resistant. Relevant agencies, bodies, and policy-makers acted as mere disaster-tourists instead of finding pre-emptive solutions to Malaysia’s long history of dealing with annual floods while having the highest percentage of the population exposed to floods among ASEAN member states.
In the immediate term, communication with the people should be improved by merging MyCuaca app functionality with the widely used MySejahtera app, and most importantly, there should be more frequent drills by Federal and State authorities, down to the district level.
The must be a restructuring and legislative enforcement to clarify the role of The National Disaster Management Agency within the frameworks under the National Security Council.
In the short term, flood forecasting and warning systems need to be improved via expansion of monitoring areas and use 4IR technologies to crunch big data from multiple sources and use artificial intelligence for improved predictions.
Certain areas such as water flood plains and drainage corridors should be protected (perhaps even expanded) through development restrictions, zoning for land use, and population resettlement. These areas need to be identified immediately and protected under National Security provisions. Frequent monitoring and servicing of drainage systems in these areas are also crucial.
There is also an urgency to apply engineering solutions for flood-proofing and disaster-resistant designs or upgrades to essential structures related to national security – electrical power stations, the armed forces, healthcare facilities, water and food supplies networks, oil and fuel systems and reserves, disaster relief, and rescue organisation assets – particularly in known flood-risk areas, flood plains, and drainage corridors.
In the medium term, there is a need for new standards in infrastructure designs, urban development, or deforestation to qualify for stricter ecological sustainability and better environmental footprint.
In the long term, widespread use of renewables (chemicals, materials, and energy) and implementation of Circular Economy principles will have to be established, as part of Malaysia’s contribution to global climate change efforts natural resource, and environmental protection.
The government must allocate budget using Input-Output-Outcome-Impact (IOOI) framework to implement both structural and non-structural mitigation plans, to ensure financial prudence and oversight in increased expenditure, and get expert help from agencies of nations that are used to national level disasters such as experts from Dutch authorities The Japan International Cooperation Agency (JICA).
5. Natural resource security: A country’s strength is defined by its natural resource capital. Given poor governance and management of natural resources, low environmental protection standards and enforcement that lead to disasters, it is unsurprising that based on GFSI 2021, the most inferior performance by Malaysia vis-a-vis top-performing countries in the Asia Pacific region is on a wide range of indicators under the dimension of “natural resource and resilience”.
All of this is antithetical to climate change mitigations and would likely increase the frequency and magnitude of both man-induced and natural disasters.
6. Health Security: We are dependent on Covid-19 vaccines and drugs from external sources and therefore have to beg other nations and international corporations for vaccines. The pandemic has also pushed our public healthcare system to the brink.
Covid will not be the last pandemic, and crises in the future will test our healthcare capabilities and scientific potential again. Relying on “science diplomacy” may be ineffective and insufficient in future geopolitical crises.
Biodiversity is a treasure trove for discovering drugs and chemicals. Still, Malaysia’s inability to protect and capitalise on its rich biodiversity to discover and develop drugs keeps Malaysia dependent on health interventions externally.
In preparation for future pandemics and/or conflicts, Ministry of Science, Technology, and Innovation and Ministry of Health should consider cooperation with the Ministry of Defense, through its bio-surveillance and biological defense branch for collaborations to support the vaccine development/biological defense roadmap and/or integrate with the proposed National Vaccine Centre.
This allows for higher levels of coordination and resources to be shared early on. Biological and chemical defense elements could also be developed alongside vaccine development such as nationwide strategies and protocols, personal protective gears, sanitisation/sterilisation and containment technologies, digital detection and tracing, testing kits and many more.
7. State Financial Security: Ongoing political turmoil, poor governance, and corruption combined with pandemic-educed severe economic downturn have put Malaysia in a financially vulnerable state.
Based on current technical and fundamental indicators, there is no strength left in our national currency: dwindling international reserves (Malaysia could not rebuild even 50% of its foreign reserves since its fall from US$128.2 billion in mid-May 2013 to US$85.2 billion in mid-September 2015), investors’ firm belief that our currency is poised for long-term depreciation based on the country’s weak fundamentals and lack of strategic development expenditure due to poor governance and corruption, ballooning Malaysia’s private sector debt (businesses and households included) as a percentage of GDP (jump from 96% of GDP to 134% over 2008-2020 period) and rolled-over national debt, rising inflation (imported plus domestic).
The combination of these indicators severely limits the government’s ability to defend its national currency from potential speculative attacks.
Attacks may also not be straightforward. The 1MDB case is an example of an “assassination” at the corporate and political level, with national implications. The financial fraud costing billions in Malaysia’s sovereign fund has shown how sophisticated, long-term operations made possible via subtle and persistent efforts (and extravagant sums of money) can buy trust, undermine the integrity and therefore, expose a gaping hole in national security.
8. Socio-economic security: Covid-19 merely exposes, accelerates and magnifies the existing structural socio-economic issues, and failed policies.
The unemployment rate in Malaysia skyrocketed in early 2020 above the 30-year historical high even though it somewhat moderated to 4.3% in October 2021. Meanwhile, time- (2.1% in Q3 2021) and skill-related underemployment (37.7% in Q3 2021) continues to rise in our country suggesting that more individuals have to work extra hours to cope with the rising cost of living and more tertiary-educated persons (rare talents given Malaysia’s serious Brain Drain issue) end up working in semi and low-skilled jobs.
A total of 32,469 small- and medium-sized enterprises (SMEs) ceased operations since March 2020 when the movement control order (MCO) was first implemented and another 37,415 after the MCO 3.0 enforced in May 2021 leading to even more unemployment and underemployment, and more people having less or no savings in their accounts.
Employees Provident Fund (EPF) chief strategy officer Nurhisham Hussein estimated in November 2021 that only 3% of Malaysians could afford retirement due to the massive Covid-related withdrawals (i.e., i-Sinar, i-Lestari and i-Citra) over the past two years.
While these withdrawal measures provided some financial relief to members during the pandemic, they have inevitably led to 6.1 million contributors now having less than RM10,000 in their EPF accounts. Out of the 6.1 million contributors, over half (i.e., 3.6 million) of them have less than RM1,000 in their EPF savings account.
The above are catastrophic figures without exaggeration, and the absence of clear and transparent outcome- and impact-oriented strategies backed by science and data to address these structural woes in the recent Budget 2022 adds to the grievous feeling.
9. Education system to create both morally and intellectually capable individuals: Former Minister of MESTECC YB Yeo Been Yin in 2019 and Education Minister Mohd Radzi Jidin in May 2020 both highlighted the observed year-on-year decline in the interest in STEM subjects in schools and higher education institutions.
Bank Negara’s article also showed that the majority of internet usage in Malaysia is limited to the consumption of content rather than productive activities. For instance, 81.2% of Malaysia’s internet users download media and play games (indicating a strong focus on entertainment), while an embarrassingly small percentage engage in productive activities such as professional networking (9.1%), content creation (11.8%) and learning from formal online courses (4.8%).
If the numbers of STEM talents, technocrats, and innovators continue to be persistently low, Malaysia would get caught in the adopter trap, and Malaysia’s vision of an advanced high-tech nation will remain a dream.
Furthermore, the education system (and the family unit) is the foundation to create not only intellectually-capable individuals but also morally-sound individuals that reject the very elements capitalised by Malaysia’s dirty politics.
The political culture centred around ethno-religious polarisation and low levels of morality heavily rely on the people supporting the same mentality and similar levels of acceptance towards unethical, immoral, and corrupt behaviours – all masked under the disguise of religious and racial cohesion.
10. Retainment of talent and investments: Human flight and brain drain index (data available from 2007 to 2020) suggests that Malaysian brain drain has been on the rise throughout the period. Due to unfair identity-politics inspired practices as well as the corrupt and recalcitrant ecosystem of awarding those who know-who rather than know-what, the few and rare individuals coming out from Malaysia’s education system want to leave the country!
The issues of poor governance, poor and unjust policies etc. lead to a vicious cycle defined by poorer quality of life, brain drain, and poor economy and low industry development. This is a spiral downward trend, destroying the nation (see the illustration below).
The above list is of course non-exhaustive, and is meant as a real wake-up call for all Malaysians.
As shown, poor governance and corruption is a common denominator in the above issues. Even the fanciest policy papers are only as good as the implementation, which is in jeopardy if politicians, people in ministries, agencies, and the often-overlooked civil servants in charge of policy implementation have their agendas and are colluding to protect the entrenched corruption culture, as evident in the widespread existence of cartels in all sectors.
If Malaysia has to focus on one item, immediate and radical reformations on good governance can start to pave the way in ensuring the right people are in the right places, and that limited funds are managed properly. After that, everything else can start to fall into place.
This is an urgent plight to all concerned and sincere Malaysians to fight and call for “affirmative reforms” towards good governance, just policies, structures and legislations.
(Rais Hussin, Margarita Peredaryenko, and Ameen Kamal are part of the research team of EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.)