Home 2013: 1 Decentralisation: The way to deepen democracy, promote good governance

Decentralisation: The way to deepen democracy, promote good governance

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In the coming general election, vote the coalition that promises to usher in decentralisation, advises Francis Loh.

The Penang state government has offered to take over control of the ferry services, currently under the control of Penang Port Sdn Bhd (a subsidiary of the Penang Port Commission, a federal authority)

The GE13 is around the corner. Regardless of who takes over Putrajaya, a critical and urgent issue is decentralisation. On account of over-centralisation of our political system, we read and hear of differences and conflicts between the federal authorities and the state and local governments. Invariably, the rakyat is always the loser.

Federal vs state

For example, there is the problem of water treatment and supply which pits the Selangor state government against Syabas, the consortium which holds the concession to the water services of Selangor (Kuala Lumpur and Putrajaya). In their wisdom, the federal authorities during the Mahathir era decided to transfer the control of the supply and treatment of water from the state governments throughout the Peninsula to the federal authority. Ultimately, water services were privatized to concessionaires like Syabas while the regulation of these concessionaires came under the federal authority.

Not only this, solid waste collection and maintenance, which used to come under the purview of the state authorities was also taken over by the federal authorities and privatised to three consortiums namely: Env Idaman, Alam Flora Sdn Bhd and Southern Waste Management Sdn Bhd. The federal government’s Solid Waste Management and Public Cleansing Authority (PPSPA) now acts as the overall regulatory authority. Only the state governments of Penang, Selangor and Perak have resisted this takeover.

In Penang, we continue to hear complaints of how public transport, in particular the licensing and even the routing of buses in George Town, falls under the control of the Commercial Vehicles Licensing Board (CVLB), a federal agency, and that the hands of the Penang state government and the Municipal Councils are tied when it comes to resolving the transportation problems in the state. Apart from widening existing roads and proposing to build new highways (which have incurred the wrath of many Penangites), the Penang government has also launched free bus services (which do not need to be licensed by CVLB) as a stop-gap measure to reduce Penang’s traffic congestion.

Of course, the issue is a political one. Not surprisingly, the Penang Barisan Nasional has taken out full-page advertisements announcing that it would build a monorail system in Penang should it take over the state in the coming elections. Presumably, federal funds will be forthcoming for such a project, assuming that the BN returns to power in Putrajaya; and assuming that the rakyat desire such a solution. But what if….?

As well, there is the dispute between the federal government and the Penang state government over the control and management of the Penang Port. In the latest version of this dispute, the Penang state government has offered to take over control of the ferry services which is currently under the control of Penang Port Sdn Bhd which is a subsidiary of the Penang Port Commission, a federal authority. In late 2012, it had been announced that the federal cabinet was in advanced negotiations with Seaport Terminal, owned by tycoon Syed Mokhtar Al-Bukhary, to privatise Penang Port to Seaport. The Penang state government called upon the federal cabinet to privatise the Port to the state government instead, apparently to no avail.

Not forgetting, there had also occurred a dispute between the Pakatan-led Kedah state government and Universiti Utara Malaysia, which had not settled quit rent payments for the extensive UUM campus for about a decade. Apparently, when the Kedah state government was under the BN before 2008, this non-payment had not been an issue. But the rakyat suffered a loss in revenue.

And of course, there is the ongoing dispute between the Pas-led Kelantan state government and the BN federal government over the payment of oil royalties to the state which has now ended in the Courts.

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This list could go on and on.

The point is that there has been a centralisation of the Malaysian political system during these past 55 years since Independence. Yes, the Executive has assumed greater powers over Parliament and the Judiciary, the other two branches of our government. Yes, the Executive has also penetrated deep into the sinews of our Malaysian society so that many aspects of our everyday lives have come under the control of those in power in Putrajaya.

However, too little attention has been given to how the federal government has also been accumulating and centralising powers at the expense of the state and local governments – to the detriment of our society and economy.

Yet another sector that has fallen under the virtual monopoly of the federal authority (unlike in most under federal countries) is our education system. The Ministry of Education employs an estimated half a million teachers and administrators. In this day and age, can any organization of such behemoth proportion function efficiently and effectively? Can it ever be world-class? No wonder there are so many complaints and criticisms of our educational system.

Alas, too much criticism might have been focused on how the national-type and mission schools have been marginalized, how teachers are burdened with administrative chores rather than teaching, how the teaching of History and Moral Studies curriculum overemphasises Islamic concerns and the role of Umno leaders while non-Umno leaders and non-Islamic matters are largely neglected, etc. All these points are true. But perhaps the most important shortcoming of the educational system is its over-centralization!

We must reverse this process. Decentralisation must be put on the agenda again, whoever takes over Putrajaya. Otherwise, our development goals, democracy and good governance will be compromised.

Global turn towards decentralisation

Previously, in post-colonial societies, the focus of attention of politicians and researchers was on consolidating the centre to enhance national unity, national sovereignty and national development. Not surprisingly, the Centre ended up dominating the states or provinces, regions and local governments. Consequently, these lower levels of administration became dependent on the Centre. In some countries, for expediency, some measure of ‘deconcentration’ of functions, already decided upon by the Centre, was carried out by the lower level authorities, without any transfer of decision making powers to the lower level authorities..

However, since the 1990s, the focus of attention of politicians and researchers has changed. For a process of decentralisation involving a devolution of decision-making powers to lower level authorities has occurred in many countries throughout the globe – from S Africa, Ethiopia, Sudan, S Sudan and even in war-torn Iraq, to Mexico, Argentina and Brazil, to India, Pakistan, Indonesia, Philippines, Thailand and even post-conflict Cambodia and Nepal.

Indeed, in neighbouring Thailand, Philippines, Indonesia and Cambodia, great strides have been taken towards decentralization by introducing new laws to devolve decision-making powers to lower levels of government; reintroducing local government elections; and sharing revenues and resources with the regional and local governments.

This decentralisation process can take various forms. When the power-sharing arrangement between the Centre, regional and local is clarified in the Constitution, we call it a federal system.


Federalism is practised in some 25 countries, accounting for 40 per cent of the global population. Among these federal countries are India, Canada, Australia, USA, Brazil, Argentina, Switzerland, Germany, Austria, Nigeria, South Africa, Sudan, South Sudan and Malaysia.

Three major features characterise federalism:

  1.  The Constitution recognises at least two levels of government. It is not the Centre that empowers the constituent unit (CU).
  2.  The Constitution also defines the scope of relations between the Centre and the CU; again, this is not determined by the Centre. In this regard, the distribution of financial resources between the Centre and the regional and local governments is a critical consideration. If the CUs are not accorded enough financial resources via revenue collection, fiscal inequality results; and the CU ends up being financially dependent on the Centre – which jeopardises its ability to make decisions at the local level and to provide services.
  3. And in disputes between the Centre and CU, it is not the Centre but an independent arbiter – the Judiciary, Constitutional Court, Upper House, etc – that decides.
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Invariably, some federalisms are more decentralized (for eg. Canada, Australia, Germany, Switzerland, India after 1990), while others are more centralized (Malaysia and India before 1990). Democratisation and the resultant changing political culture can effect a redefinition of the relationships between the Centre and the CU as in the case of India, which since 1990 has evolved from a centralized to a decentralized federalism.

Why decentralisation?

First, beginning from the 1980s onwards, country after country in the former Soviet Empire, then Latin America and southern Africa, East and South-East Asia, and most recently in the Middle East, began to democratise. Elected constitutional governments replaced one-person, one-party or military rule.

This phenomenon has been described as the so-called ‘Third Wave of Democratisation’. For example, ordinary citizens in East and South-East Asia, whom many researchers and political leaders had previously described as seemingly uninterested in politics (because they are Asians, not Westerners – sic) began to stand up. Not only are they interested in elections to determine who should be their political leaders via elections; they are also interested in shaping policies to ensure they are pro-people, not pro-elite. They even monitor those leaders and policies to ensure accountability.

Often, this ‘awakening’ of the people is related to rapid economic growth and the rise of the educated middle-class, and growing awareness among ordinary people of what was happening in the world politically, all these processes hastened by globalization.

Second, insofar as most countries are multiethnic and/or multireligious, the minority populations in these plural societies also began to stand up. These minority populations were particularly attracted to political decentralisation, especially federalism. An important book entitled Federalism: An Introduction, published by Forum of Federation, an international grouping of federal countries explains that federalism is a mode of governance that seeks to ‘combine self-rule for regions and minority interests’ with ‘shared rule for general and common purposes’.

India, which has practised parliamentary democracy almost uninterruptedly since Independence in1947, and experienced rapid economic growth for about two decades, has emerged as a ‘showcase’ for how the interests of the centre, regions and minority groups can be addressed purposively, without compromising economic development or democracy. As a result of redrawing the boundaries, the sub-continent now comprises 28 states and territories, and recognises 22 official languages (including Hindi and English). Many of these states have been held by Opposition parties, and many affairs of the states, including the educational systems, are conducted in the languages of the regions, apart from English and Hindi.

Contrary to the claims of authoritarian rulers usually associated with the majority groups which dominate the central governments, devolution of powers or granting autonomy for minorities in the regions does not lead to secession. Rather, it is when power is not shared or autonomy denied that minority groups – like the Eritreans in the eastern part of the old Ethiopia; the African Christians in the southern part of Muslim-dominated Sudan; the Tamils in the Jaffna peninsula in Sri Lanka; the Malay-Muslims of Patani in Buddhist-dominated Thailand, or the Moros in southern Philippines dominated by a Catholic majority – resort to secession, often violently.

Third, it is also easier for ordinary citizens to identify with local and state/regional governments than with Central governments located further away. Focus on lower levels of government offered not only more opportunities for participation, but more accountable and responsive governments too. Consequently, local and state/regional government elections have gained prominence and attention.

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And fourth, decentralisation also gained ground because it fosters good governance. It is obvious that the state-level, even more so local-level governments, are more aware of local complaints and problems and often more responsive to local needs. Social scientists call this ‘local knowledge’. Hence the planning and delivery of goods and services can also be more easily attuned to local needs. On the other hand, it is difficult to make the central government more accountable and responsive. Not least, they might not be aware, let alone understand local needs. Chances are, the central governments, will also be more easily subjected to elite capture, domination and the cronyism that accompanies such domination.

 Principle of ‘subsidiarity’

The above fourth point is consistent with the principle of ‘subsidiarity’ which underscores any notion of good governance. Plainly put, ‘subsidiarity’ is the practice of disallowing the central government from taking over or monopolising a particular task – say, delivering water supply or electricity, running public transportation services or even schools and universities, if the task can be performed efficiently and economically by a lower level of government.

Accordingly, in many mature democracies which believe in decentralisation, these utilities and services are performed by the local municipality or state authority, rather than by the central government. Because decision-making is localised, often involving local politicians, there develops community involvement in planning, monitoring and implementation because the community can identify with the policy and decision-makers. Not surprisingly, the practice of subsidiarity enhances local government elections which allow the community to participate in, if not take possession of the government machinery, at least at the lower levels.

 Whither Malaysia’s federalism?

Unfortunately, Malaysia’s experience has been one towards greater centralization, contrary to the global decentralization trend.

Ironically, Malaysia used to be more decentralised than its Southeast and East Asian neighbours. During the 1950s and 1960s, the state and local governments used to have greater autonomy and were involved in a wide range of activities and services including public transport, operating ports, public sanitation, sewerage, water treatment and supply, building low-cost housing, clinics, markets, etc.

Local authority elections were also conducted, from the municipal councils to the town councils down to the local councils in the New Villages. In fact, the holding of elections to these local authorities preceded the introduction of elections at the federal and state levels.

As is well known, a turning point occurred in the mid-1960s when local government elections were suspended and then abolished in the early 1970s. The introduction of the New Economic Policy, which was planned, implemented and monitored by the federal authorities was another turning point. Hence although a decentralisation process set in, in other parts of the globe, the federal government in Malaysia began to centralise more and more powers and functions under its wings to the detriment of the local authorities and state governments.

It is only now, after the 2008 general elections, which saw the Pakatan Rakyat coming to power in five states, that this centralisation process has been questioned. Over these past five years, not only the PR-led governments but also civil society has been pushing for the restoration of local government elections and a restructuring of federal-state elections.

As we approach GE13, listen to what the two coalitions are saying. One of the buzzwords of this election must be decentralization.

Decentralization ultimately means decreasing the size and scope of activities and budgets of the central government and increasing the size, scope and budgets of local and state governments. The goal is deepening our democracy and moving towards good governance.

Vote the coalition that promises a decentralisation that will restore our democracy and good governance. And make sure that they do what they promise, after GE13.

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

AGENDA RAKYAT - Lima perkara utama
  1. Tegakkan maruah serta kualiti kehidupan rakyat
  2. Galakkan pembangunan saksama, lestari serta tangani krisis alam sekitar
  3. Raikan kerencaman dan keterangkuman
  4. Selamatkan demokrasi dan angkatkan keluhuran undang-undang
  5. Lawan rasuah dan kronisme
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