Monday, July 13

Federation as stabilisation

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THE second paper by Institute for Democracy and Economic Affairs (Ideas) fellow Tricia Yeoh on federalism is entitled ‘The Political Economy of Federal-State Relations’ and makes for concise but fascinating reading on how ministries, agencies, and other federal bodies have been established and empowered over and above institutions and mechanisms at the state level: ‘the politico-bureaucratic complex’.

The paper delves into the political motivations of this phenomenon — some of them remarkably candidly expressed by political leaders — and also explores attempts to forestall or reverse this phenomenon in recent years.

One such example which deserves more attention is the attempt to introduce a Private Members’ Bill, the Constituency Development Fund Bill 2017, to ensure that parliamentary constituencies receive a fair amount of funding regardless of the party affiliation of the elected representative, and to regulate the manner through which the funds are coordinated, allocated, disbursed, and integrated with other forms of development funds at the lower levels.

From the two papers she has written thus far, 12 recommendations have been proposed for implementation. These are, from the first paper: (1) Perform a Review of the Ninth Schedule in the Federal Constitution with the aim of decentralising some key policy functions; (2) States to form their own full civil service; (3) Federal governments to consult state governments for major administrative appointments; (4) Reform the Federal Development Offices (FDOs) as state bodies; (5) Restore local council elections; (6) Increase the proportion of state-appointed senators in the Dewan Negara; (7) States to receive consumption tax proceeds; and (8) An apolitical Grants Commission to be established to determine a fixed formula for federal-state transfers.

From this second paper are four more: (1) Provide greater fundraising flexibility for state and local governments, to be able to obtain loans from banks, for example; (2) Constituency Development Fund allocations to be given regardless of party affiliation; (3) Introduce the Constituency Development Fund Bill 2017 described above; and (4) Abolish duplicate Federal Village Community Management Councils (Majlis Pengurusan Komuniti Kampung Persekutuan) in states which the coalition in power at the federal level does not control.

All of these policy recommendations are, to my mind, sensible (even if in need of more detailed study in some cases) and should be considered across the political spectrum. Unfortunately, in a highly sensitive political atmosphere, such recommendations might be interpreted as partisan attempts to increase or reduce the power and influence of certain political actors. This is a regrettable symptom of an underdeveloped attitude towards public policymaking: one that perceives any potential change from the standpoint of one’s own political fortunes.

Our job in civil society is to educate both the public and the political class that in fact, these reforms are beneficial to Malaysians and even to politicians themselves.  While most voters condemn politicians for switching sides for reasons of personal advancement, resources for constituents are also under threat by being on the ‘wrong side’. Thus, in the current climate of party-hopping, the incentive to change allegiance would be vastly reduced when the ability to deliver promises to constituents is not dependent on leaders wielding massively centralised power over approvals and budgets.  In the long run, the more we reduce the material rewards for jumping ship, the more stable our politics becomes.

Taking advantage of our federal setup is a logical way to do this. It is indeed sad that some academics have concluded that Malaysia’s status as a federation is a mere accident, stemming from the notion that the actual aim of the Federation of Malaya in 1948 was the restoration of Malay (and thus the Rulers’ and states’) prestige and power, rather than actually seeking to decentralise from the failed Malayan Union.

It is thus pertinent to remember that in the 1920s, Rulers including Tuanku Muhammad of Negeri Sembilan did indeed make the case for decentralisation on the basis of better policymaking that took local considerations into account.

It is of course well known that Negeri Sembilan provided a model for federation before Malaysia, the Federation of Malaya or the Federated Malay States. But more importantly, the state’s history provides the proof that classical forms of Malay government were not, as is often stereotyped and championed by some of today’s political elites, authoritarian, and centralised. Rather, the model derived from its Minangkabau antecedents shows that decentralised government with check and balance institutions did indeed flourish in this part of the world.

With the aim of ensuring our democratic credentials at a time of continued political, public health and economic challenges, I hope to see more papers like Tricia Yeoh’s make the argument that the same can be true again.

Adapted from the writer’s remarks at Ideas Webinar: The Political Economy of Federal-State Relations on May 20, 2020.