THE World Bank report on the declining efficiency of the civil service in recent years has generated much argument as to its accuracy and objectivity. This is because the civil service has been hailed by our leaders as the workhorse in the country’s development.
It has been recognised by international institutions in their reports as a key factor in Malaysia achieving the respectable growth rates and sustained socio-economic progress over the past several decades.
In the early years of Malaysia’s development, the civil service was the main source of managerial talent for the large number of institutions which were set up to spearhead rural development programmes.
Similarly, when the country stepped up its industrialisation drive in the early 80s, the civil service played a key role in the economic agencies and the operating ministries to implement the government’s policies on Malaysia Inc, privatisation and liberalising the excessive regulatory controls under the New Economic Policy.
Civil servants were also involved in leadership roles as the government created several statutory bodies and GLCs to provide the public sector push behind the growth of the private sector.
However, it must also be stated that while the civil service can be proud of its past achievements, it has been slow to catch up with the spread of the digital age.
In contrast, in the private sector, corporations were quick to adjust to the disruptive technologies so that they can remain relevant in the business. As technology makes their manpower redundant, excess staff are laid off and office systems are modernised to make them more compact and efficient.
In contrast, Putrajaya did little to close down redundant functions or reduce the number of office staff even as it spent millions to introduce automation in the delivery of counter services to the public. Many departments are three to four times bigger today than they were 20 years ago.
In turn, the controlling ministries were also expanded to coordinate and supervise the larger number of departments under them. There is so much overlapping of functions that the basic principles of transparency and accountability are lost in the jungle of bureaucratic red tape.
Integrity in the civil service has been badly affected by the cover-up of the 1MDB scandal. While the serious issues are not properly addressed, a lot of time and money are wasted on non-productive ceremonies and social functions.
The civil service is also lagging on matters of recruitment, promotion and disciplinary action, resulting in poor public image regarding its commitment to attract and retain the best talents regardless of gender, race or religion.
Promotions to top positions should not be based on political directives. They should be based on competitive selection procedures under the Public Service Commission to pick the best candidate, especially for the three to five highest positions in the civil service.
A strong hire and fire culture at the top should be introduced to send a message to the public and to the lower ranks that performance matters in the civil service.
As secretaries-general are the financial controllers in their ministries, they should be made to appear periodically before the parliamentary audit and select committees along with their ministers to answer for their performance in managing public funds. The sittings of the select committees should be open to the media and the public so that the people can see how their ministers and civil servants are performing.
There are criticisms that the World Bank has exaggerated the size of the civil service by including the military, police, teachers and medical personnel among the 1.7 million employees on the federal payroll. Whatever the classification, the fact remains that payments for salaries and pensions alone account for 45% of the total federal operating budget in 2017 compared to 35% in 2001.
Worse, these expenditures have been growing faster than revenue in recent years, particularly the pensions bill.
After providing for servicing of the national debt and payments of statutory grants to state governments, the operating budget is left with a small surplus.
As the surplus is too little to finance the development programme, the government has to rely more heavily on borrowing, thus raising the national debt to the high levels above 50% of GDP.
Although the absolute amount of the direct debt by itself is not alarming, the trend is cause for concern, especially if we add on the contingent liabilities from the off-budget projects carried out for the government through private sector initiatives.
The new administration is taking all the necessary measures to ensure that government finances remain strong.
Malaysia is fortunate in having favourable natural resource endowments including petroleum, a good system of physical infrastructure, reliable administrative and legal framework and an educated population.
In addition, institutional reforms are being implemented to create stronger governance structures to introduce checks and balance on the powers of the Cabinet and prevent abuse of power, especially corruption.
All these will enhance the revenue flow for the government. However, if nothing is done to control the growth of civil service employment, cut the wastage in maintaining too many departments, and reduce the role of the public sector in the economy, there is a possibility that the weak fiscal position may make the budgetary spending and economic growth unsustainable.
TAN SRI MOHD SHERIFF MOHD KASSIM
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