KL acts to reform govt, trims growth forecast

Prime Minister Mahathir Mohamad (front) and Port Dickson MP Anwar Ibrahim arriving in Parliament yesterday, where the premier presented the mid-term review of Malaysia's five-year economic blueprint.
Prime Minister Mahathir Mohamad (front) and Port Dickson MP Anwar Ibrahim arriving in Parliament yesterday, where the premier presented the mid-term review of Malaysia's five-year economic blueprint.PHOTO: BERNAMA

13 states and major agencies to get more autonomy, Mahathir tells Parliament

The Malaysian government aims to devolve power in the coming years by handing more autonomy to the 13 states and giving more independence to major agencies.

The moves are part of the promises of reforms by the five-month old Pakatan Harapan government announced by Prime Minister Mahathir Mohamad yesterday as he unveiled a mid-term review of the country's five-year economic blueprint, the 11th Malaysia Plan (2016-2020).

He told lawmakers in Parliament that Malaysia needs to regain its reputation as an "Asian Tiger" economy, a moniker it once had during Dr Mahathir's first tenure as premier in the 1990s.

"Malaysia's image will change from a kleptocratic nation to a purely democratic one that's clean, noble and with integrity," said Tun Dr Mahathir.

The 13 state governments, according to the report, "will be empowered to run their administrations by decentralising some functions, including public transport, social services, agriculture development and environmental protection". These functions are generally now controlled by the federal government.

For underdeveloped states - namely Sabah, Sarawak, Kelantan, Terengganu, Kedah and Perlis - the government promised "priority in the distribution of development allocation to promote more balanced socioeconomic development".

Promising to instil trust in agencies like the police, graft busters, the election commission, judiciary and civil servants, the mid-term review outlines the separation of powers. It reduces overlaps that had enabled the previous Barisan Nasional (BN) government to dictate agency appointments.


Dr Mahathir said the "administration needs to be clean of corruption and power abuse. The country's wealth will not be robbed by any party".

Malaysia has five-year plans meant to provide national direction and programmes for long-term socio-economic growth. The 11th instalment was presented in 2015 by ex-premier Najib Razak.

Najib, who was in Parliament as a Pahang MP, said he is sceptical of the new administration's sincerity to provide equitable development to the states.

"There's a shortage of details on how to achieve these objectives," he said.

In an environment of low cash, high government debts and frugal spending, the administration is trimming growth forecast for the next two years. It sees gross domestic product (GDP) expansion at between 4.5 and 5.5 per cent annually. This is lower than initial projections in 2015, when the annual GDP growth was expected to hover between 5 and 6 per cent.

Fiscal deficit, meanwhile, which had been projected to decrease to near zero in 2020 by the previous Najib administration, is now revised to 3 per cent.

The upcoming Budget 2019, to be delivered on Nov 2, is widely expected to contain painful cuts.

"The fact is a lot of the revenue must be used to pay debts," Dr Mahathir told reporters later. "To that extent we can't reduce the operational budget so the only way to save money is reducing developmental budget".

To cultivate prudent spending, the government is reviewing procurements including calling for open tenders for projects. The report outlined that the new administration would be more "stringent" in awarding contracts and "reduce rent-seeking activities".

Taking a jab at the previous government, Dr Mahathir said the practice of having "off budget" allocations had masked the country's actual financial standing. "The BN government had spent wastefully and without saving. now we need to spend carefully."

Dr Mahathir also said his government wants to limit to two terms the tenure of the prime minister and chief ministers of the 13 states to enhance integrity.

A version of this article appeared in the print edition of The Straits Times on October 19, 2018, with the headline 'KL acts to reform govt, trims growth forecast'. Print Edition | Subscribe