Reforming Malaysia’s statutory bodies and GLCs

 

From Farouk Abdul Khalid

The government’s announcement of a rationalisation programme for statutory bodies and GLCs marks a significant move to address long-standing inefficiencies within the public sector.

While this initiative is timely, it is not entirely new; discussions about reforming these institutions have been ongoing since the 11th Malaysia Plan (2016-2020).

The question remains: Is this yet another promising blueprint hindered by poor execution, or a cautiously managed approach to a monumental challenge?

Understanding the ‘big why’ for rationalisation

From 2004 to 2015, 20 selected GLCs and government-linked investment companies (GLICs) graduated from a decade-long GLC transformation programme, resulting in high-performing entities that contributed to the nation’s socio-economic growth.

Fast forward to today: how many of these GLCs have maintained or enhanced their performance? Furthermore, have the hundreds of other federal and state-level GLCs achieved similar success?

A recent incident underscores the urgency of this rationalisation effort: the prime minister personally intervened to cancel plans by a ministry and an agency to send 68 delegates to an exhibition in Berlin.

This serves as a wake-up call, emphasising the need to address wastage within the government before it leads to larger setbacks.

As the government embarks on this rationalisation exercise, several critical areas must be addressed to ensure a meaningful impact:

Learning from past experiences

Drawing lessons from previous rationalisation exercises, both domestically and internationally, is essential.

War stories from those who have navigated similar transformations can provide invaluable guidance, helping to prevent past mistakes.

Diverse and competent teams

The success of rationalisation efforts hinges on assembling a diverse team with strong credentials and expertise.

A multidisciplinary approach enriches decision-making by incorporating varied perspectives and innovative solutions to complex challenges.

Agencies like TalentCorp can play a pivotal role in assembling a team of dynamic nation builders.

Leveraging big data analytics

Incorporating big data analytics into manpower planning is crucial in today’s data-driven landscape.

Advanced analytics tools enable government bodies to conduct rigorous evaluations, facilitating more strategic decision-making.

Scenario modelling allows for simulations of various organisational structures, enabling quicker and more accurate assessments of potential outcomes.

Sustainable transformation

Sustainability is paramount in the transformation process.

Frameworks and policies must deliver short-term improvements while fostering resilience and adaptability in an evolving economy.

Legacy Acts and laws should not hinder structural changes, as they are often cited as obstacles by certain parties.

Addressing the human impact of rationalisation

Addressing the human element is critical in the rationalisation process.

Streamlining operations may lead to redundancies, potentially displacing employees, and the government must handle this transition with care.

A poignant example is the massive restructuring exercise of Malaysia Airlines in 2015, which involved cutting approximately 6,000 jobs.

Although the goal was to stabilise the company and reduce costs, the long-term impact of these cuts remains debated.

While the affected employees received severance packages and found new jobs, many faced challenges in the job market and struggled with mental health and financial stability.

This underscores the necessity of minimising workforce reductions when possible and providing robust support, including upskilling, reskilling, and adequate severance packages.

Streamlining should also target significant operational cost savings.

In an era of fiscal responsibility, eliminating redundancies and optimising resource allocation is essential.

Moreover, improving customer experience must be a priority, aiming to deliver faster, more efficient services to the rakyat, investors, and micro, small, and medium-sized enterprises (MSMEs).

As an example, agencies like the Human Resource Development Corporation (HRD Corp) should play a central role in managing the quality and standards of training providers, rather than leaving it to other agencies that are also currently providing training services.

Such efforts could directly increase MSME contributions to the gross domestic product from the current 39% to the targeted 41% outlined in the 12th Malaysia Plan.

In conclusion, the rationalisation of statutory bodies and GLCs in Malaysia presents a valuable opportunity to enhance efficiency, accountability, and service delivery within the public sector.

For meaningful outcomes, the government must focus on three key elements: the right size of organisations for effective operations, the right shape to avoid top-heavy structures that hinder execution, and the right skills to ensure a competent talent pool capable of driving national progress.

In the recent Budget 2025 speech, Prime Minister Anwar Ibrahim announced the rationalisation of eight organisations, signalling an encouraging start.

With continued momentum, the government can seize this opportunity to implement reforms that will ultimately benefit all stakeholders. - FMT

Farouk Abdul Khalid is a Cambridge University alumnus who is passionate about sustainable development and driving Malaysia’s progress towards a high-income nation.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.