Good governance through civil service reforms may help Malaysia’s economy expand more rapidly, an economist from the Asian Development Bank (ADB) suggested today.
Speaking at the National Economic Outlook Conference organised by the Malaysian Institute of Economic Research (MIER) here, Dr Joseph E. Zveglich Jr told the audience that governance is important in achieving high levels of income and better social outcomes.
“Globally, governance matters for growth and development ... and Asia is no exception to this,” said Zveglich, who is an assistant chief economist for ADB.
“People judge the quality of governance by their experience with public service,” he added, singling out public service as one of the best yardstick of good governance.
Zveglich pointed out that corruption is the main culprit for poor governance and service delivery, which in turn will reduce the quality of public service.
He related that in countries with poor governance, it is common for doctors to be absent in health clinics, while teachers are more likely to skip their job in public schools.
The economist also stressed that governance reforms must not be delayed in any countries, and must take centre stage in low-income countries, while middle-income countries can benchmark their performance to advanced economies.
Good governance was one of the themes highlighted in ADB’s flagship annual economic publication, the Asian Development Outlook 2013 released in October.
In it, ABD chief economist Changyong Rhee had warned Asia-Pacific economies to step up their efforts on achieving good governance to ensure equal share of their growth benefits between their citizens.
“Progress on good governance has lagged well behind the region’s economic achievements and there has been little headway in closing the governance gap with advanced economies,” Rhee said in a statement.
“There is abundant global evidence to show that governance improvements correlate strongly with faster and more inclusive growth, higher investment, and more rapid poverty reduction.”
ADB pointed out that Southeast Asian countries is still struggling with controlling corruption, which had risen during the Asian financial crisis of 1997.
Malaysia employs over 1.4 million civil servants and has one of the highest public workers to population ratios in the world.
The civil service costs the nation around RM60 billion in wages annually and is the single largest Budget item and accounts for a third of total spending.
The issues of blatant excess and corruption have resurfaced in the nation, following the announcement that the Goods and Services Tax (GST) will be implemented starting from April 2015, amid increasing inflation and stagnant wage growth.
The Auditor-General’s 2012 report, which was released in October, revealed wasteful spending and inefficient administration across several government agencies, such as the police losing equipment worth RM1.33 million — including guns and handcuffs — in the past three years, the Health Ministry improperly spending RM320,000 on social media campaigns, and the Education Ministry failing to manage private security contractors at schools that cost RM2 billion.