The case for decentralisation

DEC 5 ― The official name of our country ― the Federation of Malaysia ― denotes that we are a federation, a political entity that is typically constituted by a union of partially autonomous or self-governing states united under the umbrella of a central government.

A federation is also often defined in contrast to another political structure ― the unitary state. In such a system, the state is governed as a single, politically-contiguous unit with the central government as the supreme arbiter of power.

As opposed to a federation, in which the division of power is constitutionally entrenched, subnational authorities within a unitary state can only exercise power that is delegated (and which can be abrogated) by the central government.

In the case of Malaysia, though we are in theory and structure a federation, we are in practice more akin to a unitary state, with power over areas such as utilities, public transport, public housing, social welfare, education and even religion being regulated and controlled by the central government. This has led a few political observers to somewhat oxymoronically label our country a “centralised federation.”

I would go one step further to say that not only are we a centralised federation, but in fact a “super-centralised” one. This is because even within the federal government, power has been increasingly consolidated under one office ― the prime minister’s.

For example, the federal budget for 2013 reveals an allocation of RM14.6 billion (nearly RM18 billion if every commission or department is included) for the Prime Minister’s Department, while our country’s most developed state, Selangor, recently announced a total state budget of RM1.6 billion for 2013. In other words, the budget for the Prime Minister’s Department alone is big enough to run nine Selangors or 13 Penangs (RM1.1 billion budget for 2013).

This trend has been on an incline. Five years ago, in 2008, the prime minister (then a different one) had a much smaller budget at RM6.9 billion. In the course of one term alone, the figure has doubled.

In terms of staffing numbers, it was last reported in 2010 that the Bangunan Perdana Putra employed 43,544 people. In contrast, US President Barack Obama runs the most powerful office in the world with a whopping 468 staffers in the White House (as of 2012).

This irrationally disproportionate allocation of resources is the result of an increasing super-centralisation of power. Today, public transport is no longer run by the Transport Ministry but in fact by the Land Public Transport Commission (SPAD) which falls under the purview of the Prime Minister’s Department.

The same goes for public housing which is now spearheaded by Perumahan 1 Malaysia (PR1MA), another Prime Minister’s Department agency, even though we have a Housing and Local Government Ministry.

Even our national early child care and education programme is implemented by the Prime Minister’s Department and not, as one would think, the Women, Family and Community Development Ministry (although technically they now share the same minister).

In total, there at least 52 agencies under the Prime Minister’s Department, including the Attorney-General’s Chambers, the Election Commission, the Education Service Commission, the Judicial Appointments Commission, the Department of Statistics, the Malaysian Anti-Corruption Commission, and even Parliament. And this list does not even include government-linked companies directly controlled by the prime minister.

Therefore, to say that we need to decentralise our system of governance is to make a gross understatement. Not only is it utterly inefficient for the central government to manage what are essentially local services such as public transport, waste management, welfare, housing and some would say even education and healthcare, but what’s worse, the last few years have seen the systematic emasculation of many key functions of various federal ministries through a sinister usurpation of powers by the super-ministry known as the Prime Minister’s Department. Let us also not forget that the current prime minister also concurrently holds the portfolios of Finance as well as Women, Family and Community Development.

Clearly, power (both legal and fiscal) needs to be rationally dispersed, not only within Putrajaya but more importantly to the state and local levels where appropriate. Legal, political, fiscal and administrative decentralisation is needed to ensure operational efficiency as well as to prevent the dangerous concentration of power at the centre.

At the same time, decentralisation will also better fulfil the democratic rights of the people by empowering their state and local authorities. In the current system, state governments are helpless in so many regards, as not only are they starved of financial resources (in 2011, Penang received only RM152 million in total federal grants despite contributing billions in tax revenue), it is also beyond the powers of a state government to make simple improvements in areas such as public transport and education.

It also doesn’t help when most development grants are disbursed directly to federal agencies at the state level instead of to the state government. In some cases, such grants are arbitrarily distributed along political considerations.

For example, the heritage conservation grant for Penang is managed by a federal government entity while the same grant for Malacca is given directly to the federal-friendly state government. And to top it off, state governments can only borrow money with federal approval. Hence, Sarawak is able to raise billions while Penang can only watch in frustration.

Finally, decentralisation will also foster competition at subnational level. To illustrate this point, I like to use the Indonesian example. After nearly half a century of authoritarian dominance, the fall of Suharto in 1998 led to a sudden dispersal of authority in what is now termed as “big bang decentralisation.”

The devolution process in Indonesia was a furious one, involving the abrupt transfer of substantial resources and decision-making responsibility from an omnipotent central government to elected authorities at provincial, regional and city levels.

What followed, besides an initial chaos, was the cultivation of competition between sub-national regions. Governors and mayors now have more control over public services and direct accountability requires them to perform if they want to keep their jobs.

The result has been nothing short of a dynamic growth model that has seen the prospering of many sub-national cities, each relishing the fact that they are now in control of their own destinies.

Simply put, a rationally decentralised system is one that adheres to the basic principles of empowerment, accountability and sharing of responsibility. Not only would a properly decentralised structure encourage greater competition, productivity and creativity amongst the various states in Malaysia, it will also allow the central government to focus on national policies rather than waste their time resolving issues such as the collection of garbage, the running of child care or controlling buses by remote control from hundreds of kilometres away.

Of course, it would be overly optimistic to expect the present federal government to understand this as they have never had to run a state government whilst in opposition. However, I can at least assure that the future federal government will definitely be committed to the ideals of decentralisation.

* The views expressed here are the personal opinion of the columnist.