Corruption in Malaysia
|Corruption by country|
According to a 2013 public survey in Malaysia by Transparency International, a majority of the surveyed households perceived Malaysian political parties to be highly corrupt. A quarter of the surveyed households consider the government's efforts in the fight against corruption to be ineffective.
Transparency International's 2017 Corruption Perception Index ranks the country 62nd place out of 180 countries.
Business executives surveyed in the World Economic Forum's Global Competitiveness Report 2013-2014 reveal that unethical behaviours of companies constitute a disadvantage for doing business in Malaysia. Government contracts are sometimes awarded to well-connected companies, and the policies of awarding huge infrastructure projects to selected Bumiputera companies without open tender continue to exist.
Corruption Perceptions Index
Corruption is a problem. Malaysia had a corruption score of 52 out of 100 (high scores are less corrupt); this makes Malaysia the 2nd "cleanest" country in SE Asia, 9th out of 28 in APAC and 50th of the 175 countries assessed worldwide.
Transparency International list Malaysia's key corruption challenges as:
- Political and Campaign Financing: Donations (e.g.: USD700Million) from both corporations and individuals to political parties and candidates are not limited in Malaysia. Political parties are also not legally required to report on what funds are spent during election campaigns. Due in part to this political landscape, Malaysia’s ruling party for over 55 years has funds highly disproportionate to other parties. This unfairly impacts campaigns in federal and state elections and can disrupt the overall functioning of a democratic political system.
- “Revolving door”: Individuals regularly switch back and forth between working for both the private and public sectors in Malaysia. Such circumstances – known as the ‘revolving door’ – allow for active government participation in the economy and public-private relations to become elusive. The risk of corruption is high and regulating public-private interactions becomes difficult, also allowing for corruption to take place with impunity. Another factor which highlights the extent of ambiguity between the public sector and private corporate ownership is that Malaysia is also a rare example of a country where political parties are not restricted in possessing corporate enterprises.
- Access to information: As of April 2013, no federal Freedom of Information Act exists in Malaysia. Although, Selangor and Penang are the only Malaysian states out of thirteen to pass freedom of information legislation, the legislation still suffers from limitations. Should a federal freedom of information act be drafted it would conflict with the Official Secrets Act – in which any document can be officially classified as secret, making it exempt from public access and free from judicial review. Additional laws such as the Printing Presses and Publications Act, the Sedition Act 1949 (subsequently replaced with the National Harmony Act), and the Internal Security Act 1969 also ban the dissemination of official information and offenders can face fines or imprisonment.TI). Malaysia suffers from corporate fraud in the form of intellectual property theft. Counterfeit production of several goods including IT products, automobile parts, etc., are prevalent.
In 2013, Malaysia was identified in a survey by Ernst and Young as one of the most corrupt countries in the region according to the perceptions of foreign business leaders, along with neighbouring countries and China. The survey asked whether it was likely that each country would take shortcuts to achieve economic targets.
Types of corruption
Corruption in Immigration Enforcement
Despite periodic actions by the government to crack down on petty corruption in the Immigration Department, bribe-taking and fraudulent issuance of visas has been a long-standing problem, particularly among immigration officers at the KLIA and KLIA2 terminals of Kuala Lumpur International Airport. In 2016, the Malaysian Anti-Corruption Commission (MACC) uncovered a scheme in Selangor, in which immigration officers collected passport application fees from travelers and then submitted fraudulent paperwork declaring them disabled, resulting in fee waivers that amounted to over 1 million Malaysian ringgit by the time the scheme was exposed. In a December, 2016 statement to the Malaysian press, Deputy Prime Minister Datuk Seri Ahmad Zahid Samidi estimated that over half of the 1500 immigration officers working in the KLIA and KLIA2 terminals had participated in a range of corrupt practices, including fraudulent issuance of visas, tampering with Immigration Department data, and collusion with human-trafficking agents.
The Malaysian Anti-Corruption Commission (MACC) is a government agency in Malaysia that investigates and prosecutes corruption in the public and private sectors. The MACC was modelled after top anti-corruption agencies, such as the Hong Kong's Independent Commission Against Corruption and the New South Wales Independent Commission Against Corruption, Australia.
The MACC is currently headed by Chief Commissioner Datuk Dzulkifli Ahmad. He was appointed in 1 August 2016 to replace former Chief Commissioner Tan Sri Abu Kassim Mohamed. Similarly, the agency is currently under the Prime Minister's Department.
On 3 July 2018, former Prime Minister Najib Razak was arrested by the Malaysian Anti-Corruption Commission (MACC), investigating how RM42 million (US$10.6 million) went from SRC International into Najib's bank account. Police seized 1,400 necklaces, 567 handbags, 423 watches, 2,200 rings, 1,600 brooches and 14 tiaras worth $273 million. He had also been investigated as part of the
Deals with China
China had financed $22 billion worth of projects in Malaysia during the leadership of former Prime Minister Najib Razak. On 31 May 2014, then-Prime Minister Najib Razak made a state visit to China where he was welcomed by Chinese Premier Li Keqiang. China and Malaysia pledged to increase bilateral trade to US$160 billion by 2017 and upgrade economic and financial co-operation, especially in the production of halal food, water processing, railway construction and ports.
After his inauguration in 2018, current PM Mahathir Mohamad cancelled projects worth approximately $2.8 billion with China Petroleum Pipeline Bureau for oil and gas pipelines, saying Malaysia would not be able to repay its obligations. Mohamad further stated that some of the funding from the Exim Bank of China had been misappropriated as part of the 1MDB scandal.
Mohamad and his Finance Minister Lim Guan Eng criticized the projects, saying they were expensive, unnecessary, not useful, uncompetitive as open bidding was not allowed, secretive, conducted with no public oversight and favored Chinese state-owned firms and those affiliated with Razak's United Malays National Organisation (UMNO) party at inflated prices. Locals in the city of Malacca also complained that the port was unneeded and the small company that was awarded the contract had ties to the previously ruling United Malays National Organisation (UMNO) political party.
- "Global Corruption Barometer 2013". Transparency International. Retrieved 25 February 2014.
- e.V., Transparency International. "Corruption Perceptions Index 2017". www.transparency.org. Retrieved 6 March 2018.
- "Global Competitiveness Report 2013-2014". The World Economic Forum. Retrieved 25 February 2014.
- "Malaysia Country Profile". Business Anti-Corruption Portal. Retrieved 14 July 2015.
- Darryl S. L. Jarvis (2003). International Business Risk: A Handbook for the Asia-Pacific Region. Cambridge University Press. p. 219. ISBN 0-521-82194-0.
- Darryl S. L. Jarvis (2003). International Business Risk: A Handbook for the Asia-Pacific Region. Cambridge University Press. p. 220. ISBN 0-521-82194-0.
- "Archived copy". Archived from the original on 10 October 2014. Retrieved 14 March 2014.CS1 maint: Archived copy as title (link)
- Editorial, Reuters. "Malaysia cracks down on corruption at immigration". U.S. Retrieved 11 July 2018.
- "Over Half Of Malaysian Immigration Officers Found To Be Corrupt And Dealing Directly With Human Traffickers - The Coverage". thecoverage.my. Retrieved 11 July 2018.
- Desk, The Star (8 August 2017). "Malaysia Immigration Department signs corruption-free pledge". Asia News Network. Retrieved 11 July 2018.
- "MACC: Immigration officers' RM1m passport fraud may be tip of iceberg | Malay Mail". Retrieved 11 July 2018.
- "Government Directory: Prime Minister's Department". Office of the Prime Minister of Malaysia. 8 July 2011. Retrieved 28 July 2011.
- "Siapa Datuk Dzulkifli Ahmad Ketua Pesuruhjaya SPRM baharu". www.astroawani.com (in Malay). 30 July 2016. Retrieved 30 November 2017.
- "Ketua Pesuruhjaya SPRM". SPRM (in Malay). Retrieved 30 November 2017.
- 1MDB scandal explained: a tale of Malaysia's missing billions Published by The Guardian on October 25, 2018
- Beech, Hannah (20 August 2018). "'We Cannot Afford This': Malaysia Pushes Back Against China's Vision". The New York Times. ISSN 0362-4331. Retrieved 27 December 2018.
- Zhao Yinan (1 June 2014). "China, Malaysia target $160b trade volume". China Daily. Retrieved 11 January 2015.
- Palma, Stefania (9 September 2018). "Malaysia cancels China-backed pipeline projects". The Financial Times. Archived from the original on 9 September 2018.
Lim Guan Eng, Malaysian finance minister, said the cancelled projects were two oil and gas pipelines in mainland Malaysia and the island of Borneo that cost more than $1bn apiece, and a $795m pipeline linking the state of Malacca to a Petronas refinery and petrochemical plant in the state of Johor.