I AM delighted that the prime minister is interested in seeing the devolution of powers to Sabah and Sarawak expedited, which hopefully, will mean more autonomy to the two states to govern their own affairs. Not surprisingly, this decentralisation of federal powers to the states is being widely welcomed in East Malaysia as it recognises their desire to be self-governing, in line with their original intention when they joined Malaysia as members of a federation of states. I believe other states will also welcome more autonomy, as it will make their responsibility of governing easier. Unlike a unitary state, Malaysia is made up of several states with their own constitutions, administrations and traditions, especially for the sultanates. Many states have their own civil service, dating back 150 years to the time of the British Raj. All regard themselves as equals in a big family called the Federation of Malaysia.
State revenue is derived from levies on natural resources in land, forestry and mining, while the Federal Government controls over 80 per cent of the total public sector revenue because it has command over all direct and indirect taxes, including the petroleum income tax.
States get revenue assistance from the Federal Government in the form of capitation and road grants. There is also the revenue growth grant which states get when the economy performs above a certain threshold. States that are eligible for the oil royalty under the Petronas Production Sharing Agreement are more fortunate to have an additional source of revenue. There are also federal loans to help states with funding for their development projects.
In a federation, each state is self-governing with the central government responsible for defence, internal security and external relations, as well as the management of the trade, economic, financial, monetary and fiscal policies of the country. In Malaysia, as the Federal Government has overwhelming control over the sources of revenue, it is in a better position to undertake all the public services that are nationally important, such as education, health, utilities, transport and communications. as well as rural and agricultural development. As these services are important for the country’s overall development, they have to be planned and implemented at the national level to achieve greater impact in providing the supporting infrastructure for growth and for realising the socio-economic objectives of balanced development.
In implementing its development programmes, the Federal Government maintains a multi-tiered bureaucracy at the central, state and district levels. So, in addition to the ministries at the centre, they have duplicate departments at state and district levels to carry out the projects and provide the services. Alongside the federal departments, the states also have their own departments, responsible for those matters under the state list, and funded from their own budget. We find that in every state, there is a heavy presence of federal and state departments and civil servants. However, the state departments have very little say in deciding on federal programmes because the federal officers are responsible directly to their headquarters in Kuala Lumpur.
The chief minister or menteri besar, for example, has no power to even decide on bus routes in the city, as the state transport department is answerable to the ministry in KL. The result of such over- centralisation of the decision-making process is that it is extremely slow, and in many cases, the local officials find they cannot agree with what the ministry in KL has dictated to its federal officers at the ground level. The delays and frustrations cause the public to be cynical about the government, with the state and federal politicians blaming each other for the poor delivery of public services.
Penang leaders have often complained that the traffic congestion in the city and poor public transport on the island are due not only to federal neglect of the state requirements, but also to their inability to make local decisions because all the power is in KL. Similarly, Kelantan leaders complain that the flood mitigation projects would be better planned if the state is given the responsibility and resources for managing the recurrent problems. Rehabilitation programmes for communities affected by natural disasters take a long time to reach the affected areas because all decisions depend on KL.
There should be a review to ensure that federal ministries work in conjunction with state authorities to achieve better coordination in the planning and implementation of their programmes. States should have a say in determining how the programmes can best serve the needs of the people.
With limited state finances, we often see that the rivers, swamps, forests, wildlife, beaches, hill slopes and the other environmental controls are so poorly managed that the damage to the ecosystem will one day cause a big problem for the country and the sustainability of its growth prospects.
Although these resources are owned by the states and are under their jurisdiction, they are strategically important to the whole country. They are a national heritage which must be preserved for the future generations. It is only fair, therefore, that states be given a bigger share of the federal revenue so that they have more resources to take better care of our unique natural resources.
In a democracy, regional and local governments play an important role in providing grassroots services and solving the urgent problems that cannot wait for decisions from the capital. To empower the local communities to make their own decisions, most countries have allowed local authorities to be self-governing with local leaders elected by the people. Malaysia has disbanded local authority elections. It is necessary to revive local elections as an essential part of democratising the country.
The argument that local authorities should not be self-governing because it will mean they have to impose rates to raise revenue and, therefore, burden the rakyat with more taxation is not a valid argument. In the initial stages, they can be given grants from the Federal Government to run the local government, and gradually, these grants can be reduced to encourage local authorities to be more self-dependent.
The government should undertake a review of federal-state relations to determine how administrative and financial powers can be decentralised. This devolution of responsibility to the lower levels of government is essential because it will help to make the delivery of public services more efficient at the ground level, and improve the management of their natural resources, with beneficial implications for the economy and the environment. Further, it will improve the functioning of our democracy, reduce the over-concentration of power in the hands of a few ministers in the capital, and in the process, reduce the politics of patronage.
Above all, it will create a system of checks and balances in line with the concept in our democratic constitution that power should be shared between the centre and the constituent states of the federation.
Link to original article in NST