DAP calls for Royal Commission of Inquiry into Corruption, Cronyism and Nepotism involving the top political leadership in the country where Mahathir should produce proof of his RM230 million allegation against a crony of  "a former national leader"

(Dewan Rakyat, Monday): The Prime Minister, Datuk Seri Dr. Mahathir Mohamad had commented that during the debate on the Seventh Malaysia Plan mid-term review last week, I had spoken on the socio-political aspects of development rather than the economic crisis facing the country, and this was given great play by the Mingguan Malaysia commentary yesterday, that I had not dwelt on the   economic crisis in the debate in  Parliament.

The debate on the Seventh Malaysia Plan mid-term review was the third general policy debate in Parliament in two  weeks, and during the first two policy  debates on the White Paper on the Status of the Malaysian Economy and Motion of Thanks for the Royal Address, I had debated the economic policies, strategies and prospects of Malaysia.

I had in the debate on the Seventh Malaysia Plan mid-term review following the six-year jail sentence imposed on former Deputy Prime Minister, Datuk Seri Anwar Ibrahim,  focussed on the larger aspects of development, not only because the Vision 2020 wants to see a fully developed Malaysia in all dimensions - economically, politically, socially, spiritually, psychologically and culturally - but also because, to quote a Far Eastern Economic Review editorial in its issue of April 29, 1999, under the heading "Fixing the Image - Malaysia after Anwar's trial":
 

"For unlike many of its neighbours in recession, in the Malaysia after Mr. Anwar's trial, investors look at more than just economic indicators to judge the investment climate."

The Prime Minister may be  forgiven for his ignorance that I have addressed the issue of economic crisis and recovery in the two earlier debates in Parliament but there can be no excuse for the  Utusan Malaysia and Mingguan Malaysia to be ignorant, especially as they have been blacking out parliamentary speeches made by DAP Members of Parliament in their parliamentary coverage.

The government leaders have been painting a rosy picture of the Malaysian economy, attributing it to the exchange controls introduced by the government last September.

Last Friday, for instance, the first Finance Minister Tun  Daim Zainuddin told Japan's Manichi newspaper that he expected  Malaysia's economy to consolidate by the second half  and that it could grow by as much as 2 per cent for the  whole year.

Although the National Economic Action  Council (NEAC) subsequently clarified that Daim  Zainuddin had said that the economy could  possibly grow above one percent in his  interview with the Japanese publication,  we should note the latest forecasts for real GDP growth for the region made by the Asian Development Bank and the International Monetary Fund in their most recent reports, viz:

                                    GDP growth in
                                1999              2000
                             ADB     IMF      ADB     IMF
Malaysia                     0.7     0.9      2.7     2.0
Indonesia                      0    -4.0      2.0     2.5
Thailand                       0     1.0      2.5     3.0
South Korea                  2.0     2.0      4.0     4.6
Philippines                  2.4     2.0      4.0     4.6
Singapore                    1.0     0.5      4.0     4.2

The ADB and IMF forecasts, both released on the same day on April 20, are broadly in line with each other and with private sector forecasts.

From these forecasts by ADB and IMF, Malaysia lags behind Thailand and South Korea in economic recovery, when at the height of the economic crisis in 1997, Malaysia was the least affected as compared to Indonesia and South Korea.

Why had Malaysia slipped behind Thailand,  South Korea and Philippines in economic recovery?

Under the Seventh Malaysia Plan mid-term review, the government forecast that Malaysia’s GDP will increase by five per cent, higher than those of all other countries in the region except China. Is this a realistic projection?

Malaysia remains the odd-man out to attribute the cause of the Asian financial crisis soley to currency speculators.  The ADP’s Asian Development Outlook 1999 for instance cited two general interpretations in the international debate as to what caused the once vibrant Asian "miracle" economies to fall victim to such a financial diaster - one blames poor economic fundamentals and policy consistencies while the other argues that Asia fell victim to a financial panic, where negative sentiment became self-fulfilling.

The ADB report leaned towards the first explanation, although it said:
 

"At first sight, the past stellar economic record of the Asian economies does not support the fundamentalist interpretation.  However, closer inspection clearly shows that these countries’ economic success was built on a particular kind of economic strategy that emphasized export orientation, centralized co-ordination of production activities, and implicit (or even explicit) government guarantees of private investment projects, as well as a close operational relationship and interlinked ownership between banks and firms…

"The financial sector was also exhibiting significant problems. Weak prudential regulation, lax and inexperienced supervision, low capital adequacy ratios, lack of adequate deposit insurance schemes, distorted incentives for project selection, and sometimes outright corruption all rendered the region’s financial systems weaker than they appeared".

In focussing on capital controls as the centrepiece of its strategy to effect an economic recovery,  although other countries without capital controls are rebounding faster from the economic crisis,  the Malaysian government is avoiding structural reforms to restore investor confidence, as greater accountability and  transparency and an all-out war against corruption.

Corruption, cronyism and nepotism, for instance, are being used as political weapons in  inter and even intra-party warfare rather than acknowledged  as a national cancer which must be wiped out, regardless of its source.

In this connection, I call for  the establishment of a Royal Commission of Inquiry into Corruption, Cronyism and Nepotism involving the top political leadership in the country where the Prime Minister, Datuk Seri Dr.  Mahathir Mohamad should produce proof of his latest  allegation against "a former national leader" for having  a crony who  has cash  amounting to  RM230 million.

 Mahathir  had two days ago alleged  at the Kubang Pasu Umno division delegates meeting that "When he had the power, the former leader made his friends millionaires until  they could travel round the world and live in luxury overseas for months". He also made the very serious allegation that the money was used by the cronies to pay rioters in the federal capital.

Mahathir said yesterday that his knowledge of the RM230 million cash desposit was based on asset declaration forms and the list of contractors awarded huge projects.

Many questions are raised by Mahathir’s sudden revelation. Firstly, whether such an allegation is true or whether the Prime Minister is hiding  behind the cloak of  his high office and the  control the government exercised over the  local mass media to character-assassinate his opponents without having to furnish any  proof or evidence.

Secondly, it raises the purposelessness of making asset declarations to the Prime Minister, as the Prime Minister seems to be prepared to countenance any form of wrongdoing,  impropriety  or even corruption even when  shown up  by  such asset declarations so long as the persons concerned do not challenge his political leadership or power base.  Such an asset declaration exercise is therefore not regarded as an important instrument to fight corruption in high political places, but to keep top political leaders loyal, subservient and in line - which is another form of corruption at its worst!

This is why the DAP had demanded again and again that such declaration of assets by Ministers, Deputy Ministers, Chief Ministers, Mentri-Mentri Besar and State Executive Councillors must be made publicly so that they could be subject to public check and scrutiny if they are to serve their purpose as an important safeguard against corruption in high political places.

Another  question raised  is that if the Prime Minister could make a RM230 million allegation against a crony  of "a former national leader", what would be the allegations that could be hurled against cronies of the incumbent leader  - whether it would  100 or even more  times this figure taking it to RM23 billion or to  even greater astronomical figures?

It is most unfortunate that the Prime Minister had made the serious allegation about the "paying of rioters in the federal capital", as a person holding such a high office should not spread rumours without full and proper substantiation - especially as there are considerable evidence that many of the crowd situations should never have been allowed to go out-of-hand if the police had exercised patience and tact when no  law-and-order threats had been posed.

Mahathir seems to have decided to use the protection of his high office to descend to the level of what government leaders had condemned as the worst of the Internet culture which made  irresponsible and scurrilous attacks without having to furnish proof  - which is most unbecoming of the occupant of the highest elective office in the land.

Mahathir should publicly name, without the benefit of parliamentary immunity, such "a former national leader"  and the "crony" who has amassed RM230 million in cash to pay rioters in the Federal Capital, giving to the aggrieved the opportunity to clear his name for any defamation of character.

Let Mahathir prove that nobody in the administration has anything to hide as far as corruption, cronyism and nepotism are concerned, and that the government is prepared to allow the spotlight of public scutiny to be cast on this issue, whether concerning those in power or in opposition, by the establishment of a Royal Commission of Inquiry on Corruption, Cronyism and Nepotism.

I have just returned from a conference in Bangkok on the role of Parliamentarians in South East Asia to fight corruption jointly organised by the Parliamentary Centre of Canada and the King Prajadhipok’s Institute, and I was reminded of the false dawn in Malaysia two years ago in the all-out war against corruption.

When Mahathir took his first leave as Prime Minister for over a decade in May 1997, the then Acting Prime Minister, Datuk Seri Anwar Ibrahim launched a campaign for an all-out war against corruption, including the introduction of a new Prevention of Corruption Act with enhanced powers for the Anti-Corruption Agency and increased penalties for corruption offences.

Although there was initially considerable skepticism about the anti-corruption campaign, the public was beginning to be won over that the government was prepared to put in place a system of laws and institutions to combat corruption, especially as the Prime Minister himself said over video-conferencing from London that he supported the campaign.

There were three civil society initiatives in response to this campaign, the Round-Table Conference on Corruption organised by the DAP on July 12, 1997 the "Consensus Against Corruption" organised by the Barisan  Backbenchers’ Club on July 19, 1997 and the Round Table (II) on the Prevention of Corruption Bill on July 27, 1997.

When opening the Consensus Against  Corruption Conference, the Education Minister, Datuk Seri Najib Tun Razak, said that the Prime Minister is fully committed to the all-out war against corruption, because the Prime Minister had told his Cabinet colleagues that "advice and warnings had been given, even tears had been shed, and there is no other option left but to take action against the corrupt".

As a result, Malaysians began to dare to hope that at last, something would be done to put in place a systemic change to prevent the deterioration of the problem of corruption in the country.

However, when the Prime Minister returned from his two-month leave at the end of July 1997, he sent out a very clear signal against such a campaign against corruption, and what was regarded as a springtime of freedom immediately became frosty winter - or to be more exact, the expose of a false dawn.

Although Anwar succeeded in piloting through the new Anti-Corruption Prevention Bill in the July 1997 meeting of Parliament, which the DAP wanted it strengthened to give more teeth in the fight against corruption, this legislation probably laid the seeds for the subsequent dismissal of Anwar as Deputy Prime Minister, Finance Minister, expulsion from UMNO and his present incarceration.

The all-out against corruption collapsed totally after the Parliamentary passage of the new law and the post of Anti-Corruption Agency Director-General was even left vacant for over six months until recently - showing the fall from grace of the ACA in the eyes of the real powers-that-be.

As a result, national and international perception of the problem of corruption in Malaysia has worsened over the years.

The Political and Economic Risk Consultancy  Ltd. (PERC) reported in March this year that  from its latest survey of 450 expatriate businessmen working in the region, the trend of perceived level of corruption in Malaysia has drifted higher to an alarming level as compared to a similar survey in the past few years.

Grading the score from zero to 10, with a zero being the best grade possible or no corruption, a five being an average situation, and an 10 representing a completely corrupt environment, Malaysia was graded 4.60 in 1995, 5.00 in 1996, 5.80 in 1997, 5.38 in 1998 and 7.50 in 1999.

Parliament and the Government must take a serious view of the PERC survey and those of other bodies, like Transparency International, be aware of serious attempts being made by other countries to fight corruption, involving Parliament and the civil society as well as introducing a new political climate inimical to  an environment where there is rampant corruption, as enacting Freedom of Information legislation to promote openness, accountability and transparency.

As World Bank Economic Development Institute researcher, Rick Sapenhurst explained  the dynamics of corruption in his new book "Curbing Corruption - Toward a Model for Building National Integrity",

In other words, the extent of corruption depends on the amount of monopoly power and discretionary power that officials exercise and the degree to which they are held accountable for their actions.

If Malaysia is to restore investor confidence essential for quick economic recovery, then Malaysia must be serious about an all-out war against corruption and the establishment of a national integrity system.


The first step in the all-out war against corruption and to establish a national integrity system is to establish Royal Commission of Inquiry into corruption, cronyism and nepotism involving top political leaders in the country - whether ruling or opposition.

(3/5/99)