The stink in Malaysia's arms procurement: Guess who benefited most?

The continued revelations of corruption within the Defence Mininstry have caused much consternation amongst the public. Even WikiLeaks has reported a diplomatic cable between the US Embassy in Malaysia and the United States that alleges corruption in Malaysia’s defense procurement in which Umno politicians, agents, civil servants and military officials routinely receive 30 per cent “commission” on deals.

The US embassy also noted that many government tenders did not follow procurement rules. Instead, there were shadowy agreements without any tendering process, relying on “money politics” where awards were granted with a cut of funds circulating back to the politician or Umno through different channels.

The latest is sapura

The opposition has pointed fingers at Prime Minister Najib Razak who was the defense minister from 1991 to 1995 and 2000 to 2008. In particular, they have pointed to a RM570 million 'commission' - possibly the single largest for one deal - which was allegedly paid to a local consulting company Perimekar, controlled by his close friend Razak Baginda.

In recent months, Pakatan Rakyat has also questioned the inflated costs of several new arms deals proposed by current Defence Minister Zahid Hamidi, which includes the purchase of 30 EurofighterTyphoon jets and 6 naval patrol boats.

And just days ago, Opposition Leader Anwar Ibrahim's PKR had expressed concern at another RM2 billion directly-negotiated government procurement contract, on the basis that it can potentially waste millions of ringgit more of taxpayers' money. The project is called the 'Network Centric Operations' (NCO) for the Armed Forces negotiated between the Defence ministry and Sapura Secured Technologies Sdn Bhd.

"How can the minister of Defence allow such weaknesses in governance to take place before his very eyes?" PKR lawmakers Tian Chua and Nurul Izzah asked in their joint statement.

Najib the biggest benefactor of Malaysia's arms spending

The NCO project is so haphazard it has also irked some of the military personnel themselves, who question the wisdom of the decision to go ahead with the project. But sad to say, the Sapura deal is just another in a long line of highly questionable multi-billion ringgit deals entered into by the BN federal government.

Concern over the wastage of public funds has troubled the country for decades, in fact since the rule of 4th prime minister Mahathir Mohamad who was obsessed by over-sized infrastructure projects. But defence procxurements have been the realm of Najib, who made the really big bucks if the speculation is true that his proxies had collected inordinate kickbacks througout most of the past decade.

The controversial deals linked to Najib include the 2 Scorpene and one Agosta submarines purchase in 2002 worth RM7billion, 18 Sukhoi jetfighters in 2003 worth RM3.5billion, the 12 Eurocopters EC275 helicopters in 2008 worth RM2.3billion, the ongoing RM52billion MRT system for the Klang Valley and a multi-billion ringgit slush fund within the 1MDB project.

So far, there has only been evidence of lip service paid to open tender systems, but it is clear the preferred choice is through direct negotiation. And this is a major cause for concern.

Bitter pill for the ordinary people

Although national security is a serious issue, Malaysians are beginning to insist that the defense ministry be transparent and accountable on procurements that run into billions of ringgit.

At a time, when the economy is unstable and set to slide downward, it would be prudent for the ruling government to start implementing spending cuts to buffer a possible economic backlash.

Minister in the Prime Minister's Department Idris Jala has himself forecast 7 years to go to a possible bankruptcy in 2019. It is no wonder that there is now increasing public pressure on the government to go on an austerity drive instead of splashing big sums on non-essential expensive projects. This is an especially bitter pill for the ordinary folk to swallow, as they are still struggling with huge hikes prices after Najib slashed subsidies on a slew of consumer essentials.

Pundits warn that if the government continues to act in such suspicious manner, through direct negotiations instead of a tendering process, public trust will continue to take a turn for the worse. "They must not forget the fact that they are public trustees, elected by the people to govern the nation and to protect its wealth, not a license to line their own pockets," said one analyst that Malaysia Chronicle spoke to.

Snubbing the opposition and the people at its own peril

But so far, there is no sign of such unscrupulous practise stopping if the Sapura NCO deal exposed by PKR's Tian and Nurul Izzah is anything to go by. None of the Najib administration has even queired the Defense officials involved in the project, nor has the Finance ministry voiced any objection about the pricing, while the silence from the Cabinet has been deafening.

BN lawmakers in Parliament and the civil service are beginning to sound like people conferring on how best to finish spending taxpayers' money in the fastest possible time.

he Opposition has been extremely vocal but totally ignored. Outnumbered, they can't do much but holler and raise attention. To the BN lawmakers, snubbing their rivals is to show the people that the opposition is ineffective. Again sad to say, this is another sign of how short-sighted the thinking has become in the BN.

Most Malaysians are now more aware of corruption than before. They seem to appreciate the efforts of the opposition in highlighting the facts, especially on the toll rate hikes, and increasingly understand that the only way to correct situation is to vote out the BN. Otherwise, a cleanup would never be possible and a situation like what is happening now would prevail until the country really does go bankrupt.

Old-timers even say, if 50 years ago, the ruling government had implemented 'real' democracy, with competing forces in Parliament ensuring check-and-balance and transparency, Malaysians may now even enjoy a monthly average income of RM10,000 and above due to the country's rich petroleum reserves, bountiful oil palm harvests and tin mining of the past.

But it looks more like Malaysia is heading towards another failed state like Zimbabwe or Myanmar.

- Malaysia Chronicle