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"If they go hard against money politics, which to me is the mother of all corruption, you kill the whole damn corruption," the straight-talking retired finance ministry official told Reuters in an interview. By Bill Tarrant and Jalil Hamid, Reuters
Malaysia is setting up a new anti-corruption body to fight worsening graft, but it faces a daunting task in challenging a deeply embedded culture of "money politics," a leading anti-graft campaigner said. The government introduced a long-delayed anti-corruption bill to parliament last week, which aims to set up an independent anti-corruption body. The long-awaited bill may not be perfect, but is a significant step forward, and could be improved upon in the future, said Ramon Navaratnam, president of Transparency International (TI) Malaysia. "If they go hard against money politics, which to me is the mother of all corruption, you kill the whole damn corruption," the straight-talking retired finance ministry official told Reuters in an interview. Malaysia's system of political patronage, in which well-connected tycoons are favoured for state contracts, has long been viewed as a breeding ground for corruption. Malaysia ranked 47th out of 180 nations on TI's 2008 Corruption Perception Index, slipping from 43 in 2007. Neighboring Singapore was fourth on the list. One problem Navaratnam sees with the anti-corruption bill is the stiff 10-year jail-term and 100,000 ringgit fine ($27,500) for false reporting of corruption cases. That might provide enough comfort for politicians to pass the bill, but he says those stiff penalties would deter whistle-blowers. Prime Minister Abdullah Ahmad Badawi, trying to leave a legacy of reform before retiring in March, wants to turn the existing Anti-Corruption Agency from a politicized body under his department into an independent one, modeled along a much-admired commission in Hong Kong. This has many of Abdullah's colleagues in the ruling United Malays National Organization worried, especially following allegations of rampant vote-buying aired in the press in the run-up to pivotal party elections next March. Abdullah's predecessor and now his fiercest critic, former prime minister Mahathir Mohamad, recently lamented that UMNO, in power since independence in 1957, risked losing the next general elections if it failed to eradicate money politics. Abdullah's UMNO-led ruling coalition suffered a huge setback in general elections last March, losing its crucial two-thirds majority in parliament and five of 13 state governments. CRONY CAPITALISM Weeding out corruption is more onerous than in neighboring countries, because rewarding supporters is so embedded in the political system, Navaratnam said. For decades, the government has handed out contracts to Malay businessmen in order to redistribute wealth, under an affirmative action policy aimed at helping the economically backward ethnic Malays who form 60 percent of the country's 27 million people. The policy has more often than not led to abuse, and the consensus among analysts, diplomats and businessmen is that "crony capitalism" is so engrained it will take a herculean effort to dismantle. U.S. investment bank Morgan Stanley once estimated the country may have lost close to $100 billion to corruption since the early 1980s. While anti-corruption agencies deal with the "demand side" of the equation in government, TI and other groups are trying to make the business case against corruption on the "supply side." Corruption erodes profits, creates a culture that allows employees to rationalize stealing from their companies, and can lead to manipulation of financial statements, Navaratnam said. Management and staff can be sidetracked by having to respond to internal or regulatory probes, not to mention the fines they may have to pay and the damage to corporate brands. TI and other groups are promoting "integrity pacts" -- where all parties sign an enforceable agreement not to engage in corruption -- and corporate social responsibility programs, he said. "You don't have a moral business except in moral environments, or when laws are clean and enforceable and you are afraid to break them," Navaratnam said.
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