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Election looms large, forum on improving federal-state relations postponed

We must put decentralisation back on the agenda after the upcoming general election

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With the dissolution of Parliament paving the way for a general election, a forum-roundtable scheduled for 13 October, involving two menteris besar and a chief minister of the three Pakatan Harapan states, was postponed.

The forum had aimed to discuss ways to improve federal-state relations and end with plans to set-up an all-states coordinating committee. Yes, contesting and winning the elections is the priority now that the general election looms large.

But asking big and small questions about good governance and ensuring that the people’s interests take centre-stage, including through restructuring federal-state relations in Malaysia, must be put on tomorrow’s agenda after the election.

The Penang chief minister’s office, together with Penang Institute, had been preparing for this one-day forum-roundtable over the past two months.

Originally, the event was scheduled for 13 October, a week or two before the presentation of next year’s Budget, which is usually in early November.

After we had finalised our dates, oops, the PM decided to present the Budget earlier, on 7 October instead. This change of dates denied us the opportunity to demand more funds for the states.

And now, with the dissolution of Parliament by Prime Minister Ismail Sabri Yaakob on 10 October, we were forced to postpone the forum. Hopefully, it will be held after the election, perhaps with a new reformist-minded government in charge.

Penang government – three recommendations

The forum is a follow-up to Chief Minister Chow Kon Yeow’s announcement in early June that the Penang state government had set up a committee to conduct research on federal-state relations.

The committee would make recommendations to the state government on how to improve those relations, which are biased in favour of the federal authorities.

The committee then published an interim report titled “Enabling Decentralisation and Improving Federal-State Relations in the Federation of Malaya”. Get it here.

The report made three major recommendations:

1. Set up a “Federal-State Relations Commission of Enquiry” to examine and review in entirety the working arrangements between the federal and state governments relating to power, functions and responsibilities on all legislative, administrative, financial and socioeconomic matters, within the constitutional framework

It was proposed that the commission address, in particular, longstanding demands for greater devolution of financial powers to states and local governments. This would include revenue raising, fiscal transfers, redistribution and sharing of taxes, the lifting of the restrictions on borrowing by the states, and the equalising of the financial capacities of all states to address fiscal imbalances.

Invariably, this is also a call to reconsider the role of the National Finance Council, which, to date, has acted biasedly in favour of the centre.

2. Set up an “All-States Collaboration Committee on Decentralisation and Improving Federal-state relations”

Perhaps, the process could start by bringing together the PH-led states, which appear to be more interested in such a restructuring of the federal system.

Even so, the end goal would be to bring together all state governments, regardless of party affiliation, to work together to realise a more cooperative federal system, not one dictated by the centre. Working together, the states would be able to advance the interests of the regions and the local areas.

Democracy is not simply about casting a vote once every four or five years. The meaning and practice of democracy has to be deepened to include our monitoring of government to ensure that it is planning for development projects responsibly and competently; that it is improving efficiency in delivering goods and services to the people; and that it is not indulging in corruption and abusing the public purse.

No doubt, the state assembly members of the different states would have best practices that they could share with one another.

3. Set up a standing or select committee to manage federal-state relations in each state

In Penang, the chief minister had set up an ad hoc committee to look into working relations between the two levels – on finance, health, trade and industry, social welfare, education, road works, disaster management, flood mitigation, the civil service and so on.

Such preliminary work must be launched in every state prior to setting up No 2, the All-States Collaboration Committee.

Clearly, Goal 1 – setting up a Commission of Enquiry – requires the approval of the federal government. Hence, it can be put on the agenda only after a reform-minded government gets voted in; presumably a new PH federal government would support such an initiative.

Goal 3, on the other hand, can easily be adopted and launched by any interested state. Such a committee should include the state assembly members themselves, civil servants in the states who have to deal with their federal counterparts, and perhaps some so-called outside experts on federalism.

Goal 2, therefore, was the reason for this proposed forum-roundtable involving the three PH-led states – Selangor, Negri Sembilan and Penang.

If the forum had been held…

If the forum had been held, the highlight would have been the two roundtables; the morning one would have featured two menteris besar and a chief minister: Amirudin Shari from Selangor, Aminuddin Harun from Negri Sembilan; and Chow Kon Yeow from Penang.

Each of them would have had a chance to talk about their gripes with Putrajaya. The discussion would have had many common themes, no doubt.

Prof Ahmad Fauzi, a political scientist from Universiti Sains Malaysia, would have moderated. He was all excited about doing the job.

Prof Wee Chong Hui from UiTM, Kuching, would have talked about fiscal federalism in Malaysia and how it is highly skewed in favour of the federal.

Also scheduled to speak was Tuaran MP and one-time Deputy Chief Minister of Sabah Wilfred Tangau. With others from Borneo, Tangau had been a prime advocate for restoring a measure of autonomy back to Sabah and Sarawak, as promised under the original Malaysia Agreement 1963 arrangements.

The afternoon’s roundtable would have featured several state executive council members from the three PH-led states of Selangor, Negri Sembilan and Penang. They had been raring to share their views on not only the shortcomings they had to face but also how they could learn from one another about how to overcome various federal constraints and counter Putrajaya’s bullying.

Dr Francis Loh was also scheduled to talk about the decentralisation process that had taken place in neighbouring Indonesia and the Philippines. Both countries, though not federal systems, had introduced laws to transfer power, functions, funds and personnel to their local and provincial authorities. Elections were also conducted at the lower levels of government.

Interestingly, Indonesian President Joko Widodo started his political career by getting elected as mayor of the central Java city of Solo. Next, he contested and became governor of Jakarta, before being elected for, now his second term, as president of Indonesia. (Former Philippines President Rodrigo Duterte also entered politics by first getting elected as mayor of Davao City in Mindanao, southern Philippines). We could have learnt something from these neighbours.

Finally, Dr Francis Hutchinson, who had done much research on Johor, would have talked about Johor’s relations with Putrajaya. In this regard, recall that the Sultan of Johor has talked publicly about the state pulling out of Malaysia on more than one occasion!

I was looking forward to the afternoon’s roundtable in particular since I expected the executive council members to express themselves more freely than their state government leaders.

Best practices to share

The PH states could have shared best practices as well. For instance, to get around legal constraints preventing the states from endeavouring in certain jurisdictions allocated to the federal government, the Penang state government passed enactments in the state assembly to create several state corporations.

This led to the creation of several state corporations, which bypassed the lack of state departments in those ‘restricted’ areas. Through these corporations, the scope of operations of the Penang state government was broadened. The corporations include the George Town World Heritage Trust Incorporated, Penang Hill Corporation, Penang Women’s Development Corporation and Penang Youth Development Corporation.

Questions about similar initiatives on the part of the Selangor state government could have popped up in the same forum. Perhaps, one could have asked them to tell us more about UniSel – for Selangor is the only state in the country which runs a university.

Considering how expensive it is to operate a non-profit university, UniSel unsurprisingly encounters financial problems. The roundtable could have had an enlightening discussion on this.

Executive council members from Negri Sembilan could also have shared their experience. After all, an important conference on federalism was held in Universiti Sains Islam Malaysia in Nilai on 1-2 July 2019, under the patronage of the Yang di-Pertuan Besar of Negri Sembilan, who also officiated the conference. His son, Tunku Ali Redhauddin, was the guest of honour throughout the conference and had served as advisor to the organisers of the conference. No doubt, the state of Negri Sembilan and its royalty supported the decentralisation effort. We could have picked up lessons from this state too.

Follow up

A follow-up to this conference could have been a larger all-states conference with Johor, Sabah and Sarawak present. Even though these three states are not PH-led, they would undoubtedly have sent their state assembly members to discuss the push for greater decentralisation. Sabah and Sarawak MPs have been at the forefront of restoring their autonomy promised under the Malaysia Agreement 1963.

One can agree that structural reforms, such as reforming the federal system in Malaysia, are not the priority for the immediate future.

Although Aliran sent a memorandum on this topic to the Committee on Institutional Reform set up by the newly elected PH government in 2018, it was not entertained. The committee was more concerned about addressing problems arising from the abuse of institutions and agencies like the Election Commission and the Malaysian Anti-Corruption Commission and the appointments process for these and other bodies like the judiciary, the Attorney General’s Chambers and the police force.

Thanks to these changes, the SRC International and 1MDB cases were meticulously prepared and prosecuted, and the former PM subsequently found guilty on seven counts of corruption. The new federal judges appointed showed their strength and integrity by standing firm against the threats and criticisms directed at them by the former PM’s supporters.

That said, this whole question of centralising powers and funds must be added to the agenda as soon as possible. Without decentralising, how do we deepen our democratic participation beyond casting our votes once every four to five years?

Decentralising also allows us to push for issues, to plan and implement projects and programmes that we, the rakyat, consider urgent or hold dear.

Decentralising will enhance the roles of our state and local governments too. As countries throughout the world are discovering, decentralisation will tap local knowledge, increase competency and responsibility to the job, and enhance governance for the people.

Where does one start?

Of course, a systematic and thoroughgoing inquiry must be conducted by a commission of enquiry involving people from different levels of government, and various walks of life. Federal-state relations, as discussed in Part VI of the Federal Constitution and elaborated in the Ninth and Tenth Schedules, must be scrutinised anew.

More intergovernmental committees will be needed to promote collaboration, consultation and cooperation between the federal and state governments. As of now, the Constitution only provides for three intergovernmental bodies – the national councils for land matters (Article 91), local government (Article 95A) and finance (Article 108).

The central government has created other intergovernmental councils to manage forestry, security and development planning matters. All, however, are chaired by the PM or his ministers and dominated by the central government.

We cannot allow for a return to a centralised system of administration as happened under the prime ministership of Najib Tun Razak, who centralised some 10-plus ministers and five or six deputy ministers in the prime minister’s office – all directly answerable to him. The PM’s office drew away a lot of funds from the other ministries, let alone from the states.

Apart from establishing the commission of enquiry, we should first decentralise by going for low-hanging fruit.

In the wake of the Covid pandemic, we know we must decentralise the public health services. So, additional funds and personnel must be made available for the states and local governments to perform these functions. They can efficiently complement the efforts of the Ministry of Health.

The floods last year resulted in chaos, caused by the relevant authorities’ incompetence and neglect, but admittedly worsened by climate change. In its wake, matters of disaster management – like handling floods and fighting fires, ie the fire, rescue and emergency services – should be decentralised to the states and local authorities as well.

We can all agree it is also time for the states and local authorities to take charge of public land transport, especially in cities and larger towns. There is no reason for Putrajaya to control the issuing of licences for buses and taxis, let alone deciding on bus routes.

In fact, many of these functions used to be the purview of state and local governments. In Penang, the city council used to run buses that criss-crossed the city. Adults commuted to work in these buses, while children used them to get to school on time like I once did.

We agree that the railways (KTM) that traverse the peninsula should come under the charge of the federal government.

We are not suggesting that the states should start their own airlines. We are simply saying let the states manage the buses and taxis.

It is also time to reverse the centralisation of public utilities. Local and state authorities could easily handle water supply and reticulation, sewage treatment and solid waste disposal. Certainly, they can run these services more efficiently and effectively than Putrajaya can. This is the lesson from global experience.

These services need not be privatised either. Collecting rubbish, treating sewage, and licensing buses and taxis are not rocket science endeavours. They can be performed by public authorities at the local and state levels.

The elephant in the room is that this centralisation of so many jurisdictions, and the subsequent privatisation of them, often to cronies of the Umno-Barisan Nasional government, were abused in the name of the New Economic Policy.

In fact, the NEP was a policy designed to uplift the poor regardless of race and to share wealth and equality with the bumiputra community.

We must put a stop to the abuse of the NEP by the Umnoputras and their cronies, Malays and non-Malays. So, decentralisation and the restructuring of federal-state relations will ultimately rid us of corruption as well.

We must put decentralisation back on the agenda after the upcoming general election.

Francis Loh
Co-editor, Aliran newsletter
17 October 2022

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.

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