Top banker suggests trimming public sector workforce to prevent burden falling on future generations
KUCHING: There is an urgent need to address the country’s bloated civil service.
Describing the situation as a ‘big national challenge’, CIMB Group chairman Datuk Seri Mohd Nazir Tun Razak said a solution has to be found soon to ensure that the future generations do not struggle with the bills.
“Compliments to FM II (Second Finance Minister Datuk Johari Abdul Ghani) for publicly discussing this big national challenge. This has to be addressed soon or our future generations will struggle with the bills,” Nazir, who is Prime Minister Datuk Seri Najib Tun Razak’s younger brother, commented in his Instagram yesterday.
Nazir was responding to The Borneo Post’s report on Wednesday that the Malaysian Civil Service is relatively large in relation to the country’s population – making it the highest in the world with one civil servant to every 19.37 persons.
Johari said the bloated civil service of 1.6 million has caused the government expenditure to rise yearly, leading to the escalating drop in revenue.
In Malaysia the ratio of civil servants is one to 19.37 people while it is 1:110 in Indonesia, 1:108 in China, 1:71.4 in Singapore and 1:50 in South Korea.
In 2003, the pay of civil servants totalled RM22 billion, while the pension paid was RM5.9 billion. In 2016, the pay to civil servants increased to RM74 billion and the amount of pension paid soared to RM19 billion.
However, Johari asserted that the government had no plans to reduce the number of civil servants although the remuneration and pensions to civil servants continued to soar.
Meanwhile, commenting on the same report by The Borneo Post, Asian Strategy and Leadership Institute (Asli) Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam suggested that the government form a high level taskforce, if not a royal commission, to examine ways and means of cutting the civil service down to an efficient and reasonable size.
For a start, he said the government should change its stand that it has “no plans to reduce the 1.6 million bloated civil service.”
“If the government finds it difficult to reduce the civil service, then please freeze recruitment into the civil service or make recruitment more sparing and definitely much more selective. Please go for more quality and less quantity,” Ramon said in his comment entitled ‘How to deal with the bloated civil service’ yesterday.
Ramon said the government had finally itself described the civil service as bloated and while Johari had openly and honestly stated that the bloated civil service will not be reduced but be made more multi-tasked to improve productivity, his statement was serious and worrisome at the same time.
Besides calling for the appointment of a high level taskforce, Ramon said the government should decide to reduce the size of the civil service to avoid the strain on budget deficits, especially in the future.
“The salary and pension bills are going up, whereas productivity is not publicly perceived to be going up. Those who deal with the government often enough will tell us more about the undue delays, the corruption and the often ‘tidak apa’ (never mind) or lackadaisical attitude shown on the ground towards the public.”
He said the civil service is huge because the public sector has been designed to be inordinately large.
“This has evolved because the private sector has been denied and deprived of greater opportunities to serve the public. There are many government services, facilities and works and supplies that can be provided more efficiently by the business sector.
“In fact this could be the way forward, for more Bumiputera contractors and other races to participate more actively and competitively, to serve our society better.”
Ramon said the cost of maintaining the civil service, at RM74 billion in 2016 for salaries and allowances, is not sustainable.
“The pension bill of RM19 billion per annum, without any contribution to the GDP (Gross Domestic Product) by retirees, is also unbearable in the longer term. At the same time, according to Johari, the revenues from palm oil and oil and gas have been falling drastically.”
He said it is basic economic and financial logic that the country cannot afford to cope with rising salary expenditures and lower revenues.
“It is much more difficult to raise revenues than to cut expenditure. The government has said that our fundamentals are strong. Indeed, they are reasonably healthy at this time. But at this rate of a growing civil service that is now acknowledged as bloated, and therefore not very efficient, we cannot afford to assume that the economic and financial fundamentals can continue to be strong for much longer.”
Ramon’s appeal then is for the government to more actively seek to reduce the size of the civil service and to act soon, without undue delay, adding that the nation’s good economic fundamentals are being seriously threatened and we must preserve and protect them from further risks.
As to why the country’s civil service is so bloated, Ramon said: “We recruited rapidly to give jobs for the boys when the output from the education system expanded. We even had an ‘Operasi Isi Penuh’ programme at one time. That is, we rushed to create jobs and filled them fast.
“Unlike the private sector, we rarely retrench staff even in bad times. We hardly sack anyone for inefficiency and even for wastage of public funds. The civil service has become a sacred cow, which has to be handled gingerly for fear of reaction against the federal and state governments at the ballot box.”
Ramon said life is relatively comfortable especially at the lower levels of the civil service and salaries are better than before, pensions are secure, health services are generous, and the drive to be more productive is soft.
“In fact there is now a strong ‘manja-manja’ (spoiled) attitude towards the civil servants. So the demand to join the civil service is high, but the supply of jobs is slowing down considerably as the whole economy declines.”