Home TA Online 2010 TA Online Empowering state and local authorities under the New Economic Model?

Empowering state and local authorities under the New Economic Model?

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One of Najib’s reform initiatives aims at decentralisation in decision making and devolution of powers. But how will this be possible when, as Francis Loh observes, the BN federal government has been most disinterested in sharing power with the state and local levels of government?


In his briefing to foreign investors and other interested parties in Washington in mid-April 2010, Prime Minister Najib Tun Abdul Razak reportedly discussed his plans to bring about ‘National Transformation’ in Malaysia, in order to realise ‘Vision 2020’.

The ‘four pillars’ of this National Transformation are:

  • fostering ‘1Malaysia’ (People First, Performance Now) launched in April 2009;
  • the ‘Government Transformation Programme’ (which has six National Key Result Areas) launched in Jan 2010;
  • the ‘New Economic Model’ to be achieved through an Economic Transformation Programme’ comprising eight Strategic Reform Initiatives (SRIs) announced in March 2010; and
  • the 10th Malaysia Plan earmarked for a June 2010 launch.

Najib admitted that it would be difficult to bring about this transformation of Malaysia but remarked that “when things get tough, the tough get going!” Brave talk!

Thus far we have witnessed much fanfare surrounding the launching of these various programmes. It would be a long time yet before results become evident, even longer before we see ‘transformation’. In the event, most of the programmes have been developed around the numerous complaints that Malaysians have been highlighting over the past decades and which came to focus in the run up to the March 2008 election..

As I see it, the problem does not lie in the proposed programmes. Indeed, there is much in the programmes that Malaysians should support. The problem, I believe, would be in translating these nice proposals into concrete policies, creating the necessary institutions, and recruiting and/or re-training the needed personnel to implement the nitty gritty plans at the local levels, and of course, finding the money to implement these plans and projects (without the money getting hijacked along the way as in the Port Klang Free Zone case).

I want to focus on only one of the eight Strategic Reform Initiatives (SRIs) mentioned in the Economic Transformation Programme. SRI Number 3 is about moving away from the old approach of ‘centralised strategic planning’ to the new approach of ‘localised autonomy in decision-making’. Or as the document states, moving from ‘guidance and approval from the federal authorities for economic decisions’ to ‘empower state and local authorities to develop and support growth initiatives…’.

Yes, SRI No 3 is to move towards decentralisation in decision making and devolution of powers. This is in keeping with trends in governance throughout the world wherein greater efficiency and accountability have been found when decision making is most localised, the so-called principle of ‘subsidiarity’.

But those of us who have been following developments since 8 March 2008, will also be aware that the BN federal government has been most disinterested in sharing power with the state and local levels of government, particularly when they are in the hands of the opposition PR governments.

For starters, the existing Constitutional arrangements in terms of legislative jurisdictions and revenue assignments are skewed in favour of the federal government. The Malaysian federal system is an unusually centralised one. In fact, the federal government can, technically speaking, deny development funds to the PR-state governments. Or when funds are provided, they are channelled away from the PR-led state governments to the State Development Officers of those states, who are answerable to the Implementation and Co-ordination Unit of the PM’s Department.

The on-going spat between the Kelantan state government and the federal government over the former’s claim to petroleum royalty, which the latter rejects, is a related case in point. In Penang, the ‘development’ of the expanded Botanical Gardens and the upgrading of the Penang Hill Railway under the charge of the federal Minister of Tourism(!!) has led to much controversy. A principal criticism is that these people from Putrajaya do not understand what Penangites want and have not consulted the rakyat adequately. On its part, the Penang state government has stood by claiming that the matter is out of its hands, which is not necessarily the case.

In the event, will the federal government begin to devolve power to the state and local authorities? Will the federal government willingly share its revenue collection assignments with the states and local authorities? When and who will introduce the necessary bills to amend the Constitution in parliament?

Secondly, apart from the federal bias in the constitutional design, centralisation has also been fostered due to the 50-plus years of uninterrupted BN rule. The abolition of local authority elections in the 1970s has facilitated the penetration of the BN federal government not only into the states but also into that third tier of local government. There is now a clamour for bringing back local government elections which should facilitate the realisation of SRI No3, i.e. ‘empowering state and local government authorities’. But the federal government does not seem to be in the mood to share power. Cakap tak serupa bikin?

And thirdly, the development process, underscored by the implementation of the NEP, had contributed further to the centralisation of power. Not only did the federal government set up numerous statutory bodies and GLCs, but regulatory bodies like the Commercial Vehicles Licensing Board (CVLB) were also charged with promoting Bumiputera participation in the transportation industry via licensing commercial vehicles. Consequently the licensing of taxis and buses, even the routing of buses in local authorities, came under the purview of the federal authorities, in this case the CVLB. Will the federal government now reverse this centralisation process? Where does it start?

Francis Loh is honorary secretary of Aliran

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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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