December 31, 2010
Friends and Fellow Malaysians, I wish to end this year (2010) with Jagdish Bhagwati’s article on “Getting Corruption Right”. It is my New Year fervent hope that our Government deals firmly with the corrupt in our country. In 2011, we will see two senior politicians, Tun Ling Leong Sik, and Khir Toyo in our courts. More can be expected given the fact that the new year is likely to be an Election Year (both National and Sarawak state elections).
Political temperatures will rise, but I am confident that as a nation of mature and intelligent Malaysians, we will be able to stay sensible, rational, and responsible as we debate issues and discuss the future of our wonderful country, warts and all. –Din Merican
by Jagdish Bhagwati (December 29, 2010)
But several of the MPs had also been taken aback on discovering that when Obama spoke to them, he read from an “invisible” teleprompter. This had misled his audience into thinking that he was speaking extemporaneously, a skill that is highly regarded in India.
Both episodes were seen as a form of corruption: one involved money, the other deception. 
Transparency International and occasionally the World Bank like to rank countries by their degree of corruption, with the media then ceaselessly citing where each country stands. But cultural differences between countries undermine the legitimacy of such rankings – which are, after all, based on surveys of the public. What Obama was doing was a common enough practice in the United States (though one might expect better from an orator of his ability); it was not so in India, where such a technique is, indeed, regarded as reprehensible.
India certainly has corruption, like almost every other country. But India also has a culture in which people commonly assume that everyone in public life is corrupt unless they prove otherwise. Even a blind man will tell Transparency International: “I saw him take a bribe with my own eyes.” Indeed, a distinguished Indian bureaucrat, a man of unimpeachable character, once told me that his mother had told him: “I believe you are not corrupt only because you are my son!”
So, if you ask Indians whether their governance is marked by widespread corruption, they will answer with gusto: yes! But their exuberance biases India’s global ranking relative to more empirically minded countries.
A similar bias arises from the occasional tendency to view political patronage elsewhere as being more corrupt than the same practices at home. For example, when the East Asian financial crisis broke out, there followed a systematic attempt to pin the blame on the affected countries: “crony capitalism” allegedly had somehow crippled their economies! In other words, the acquaintances and benefactors of the East Asian leaders were “cronies,” whereas those of US leaders were “friends”?
In fact, it was clear that the culprits were the International Monetary Fund and the US Treasury, which had encouraged a shift to capital-account convertibility without understanding that the case for free capital flows was not symmetrical with the case for free trade.
But where substantial corruption can unambiguously be found, as it often can, one must recognize that it is not a cultural given. On the contrary, often it is the result of policies that have fed it.
India in the 1950’s had a civil service, and a political class, that were the envy of the world. If that seems shocking today, the loss of virtue must be traced to the all-pervasive “permit raj,” with its licensing requirements to import, produce, and invest, which grew to gargantuan proportions. High-level bureaucrats quickly discovered that licenses could be bartered for favors, while politicians saw in the system the means to help important financial backers.
Once the system had taken root, corruption percolated downward, from senior bureaucrats and politicians, who could be bribed do what they were not supposed to do, to lower-level bureaucrats, who would not do what there were supposed to do unless bribed. Clerks would not bring out files, or get you your birth certificate or land title, unless you greased their palms.
But if policies can create corruption, it is equally true that the cost of corruption will vary with the specific policies. The cost of corruption has been particularly high in India and Indonesia, where policies created monopolies that earned scarcity rents, which were then allocated to officials’ family members.
Such “rent-creating” corruption is quite expensive and corrosive of growth. By contrast, in China, the corruption has largely been of the “profit-sharing” variety, whereby family members are given a stake in the enterprise so that their earnings increase as profits increase – a type of corruption that promotes growth.
In the long run, of course, both types of corruption are corrosive of the respect and trust that good governance requires, which can undermine economic performance in its own right. But that does not absolve us of the responsibility to define corruption properly – and to acknowledge obvious and important cultural differences in how it is understood.
Jagdish Bhagwati, Professor of Economics and Law at Columbia University and Senior Fellow in International Economics at the Council on Foreign Relations, is the author of Termites in the Trading System: How Preferential Trade Agreements Undermine Free Trade.
Copyright: Project Syndicate, 2010.
www.project-syndicate.org
Picture this scenario.
It is now the second phase of providing the 3G services. Nokia and Huawei have performed well. The services were well taken up by consumers. It's time to expand. New tenders must be called. They are called.
The tender committee deliberated on the prospective vendors to expand the services of 3G. The successful vendors in the First phase, Huawei and Nokia participated too. So did other established players. Probably 10-12 were shortlisted.
Now here comes someone, admitting the name of Alcatel. Alcatel says we have the product. But it has no track record. Its product hasn't been tested for its technical integrity and robustness. It didn't get a favorable verdict at the technical stage.
Nevermind. We have been asked to help if we can. That means we have to. Just this time, we set aside the provisions in the colored books. The whispers from beyond the walls of Khazanah are more potent. So, some people insisted Alcatel be given a chance to participate. So it did. It won the contract as vendor to supply the 3G services for the rest of the country. The price was USD 85 million.
A minority objected to this late entry insisting that it must be subjected to the protocols of tender. By that I suppose, it meant, Alcatel must go through a rigorous process of selection and evaluation. Having qualified, they are admitted into the final phase of selection, being assessed by the tender board committee. Assuredly, the person carrying the cause of Alcatel was a member of the tender committee.
It didn't go through such a robust and transparent procurement process, but was admitted in any case. A larger number of board members didn't see anything amiss at this manner of entry. There were whispers that Alcatel's entry has been endorsed right up to the corridors of MOF2. Even though, it was clear, such highhanded admission violated the rules and guidelines ensconced in the multicolored management manuals supplied by Khazanah. The High Priest at Khazanah sayeth- do, so it must be done.
Protestations by minority were easily defeated. The chairman of the tender board put his foot down insisting that Alcatel be considered.
I suppose now TM will grill the chairman of the tender board then. The two fall guys are said to be runners for some board members or to some senior management at TM. If they are runners, they receive instructions. We must go after them.
By the way, I must salute Zamzairani for declaring that investigations into the conduct of TM will be an open book. That book will be much more respected if it leads to direct investigation by the police or MACC. I salute him further, if his statements were made independent of Khazanah's supervision. Hey Zam- did you get clearance from Amok? You mau mati kah? And lose the RM 1.5 million annual income?
Move over to Indonesia. TM has an international arm, TMI. In Indonesia for example TM through its TMI operates it cellular services through ExCelMinIndo. It wanted to offer the same vendor for the Sumatran market. Since Alcatel has already been accepted as the vendor for peninsula Malaysia, why not appoint it as vendor for the Indon market? Senang kerja bukan? If it's good for Malaysia, it must also be good for Indonesian operations.
Those people in Sumatra were asked repeatedly to accommodate the technical compatibility that comes with Alcatel. The CFO was asked to accept the appointment of Alcatel for the end user- Ex Celcom Indo by reporting that Alcatel offered the best in terms of financial acceptability. He refused unless the people here in TM Malaysia request so in writing.
The chief engineer there was asked to report that Alcatel satisfies all the technical requirements and its appointment will therefore be technically justified. . He refused too unless the request from the parent company in Malaysia was done in writing.
In the end, to decide for the end user in Indonesia, TM tender board here approved the award to Alcatel.
What is the relevance of the story above?
The relevance lies in our ability to place what is happening now in its proper context. That context is a procuring regime which is far from what TM has pompously claimed. We have seen how, the procurement regime which consists of certain protocols was often violated to allow selected and preferred and that which has received whispered endorsement to be appointed vendor.
Now now people, the Alcatel people have themselves admitted to bribing the Malaysians, we are now setting up a board-subcommittee to investigate? I am not about to allow the cheap trick in retorting that criminal charges cannot be proffered by a company. Someone commented that on my article on Sime Darby. Then, the most logical step for TM and Axiata is to jointly refer the matter to SPRM so that criminal charges can be taken.
All this setting up a committee is akin to the chisel making noises when the house is already completed. Pahat bising, rumah sudah siap. We the people are reading it more as a CYA ruse- Cover Your Ass ruse. Somebody other than the 2 guys has benefited from the deal. The surest way to get to the bottom of this affair is to get the two jokers to sing like canaries.
It is also strange; the MACC is offering to verify the allegations. Will TM and Axiata or even MACC will then come do the Singapore thing of saying, the version of the story doesn't seem to match with our own internal notes?
The facts are these. Whatever was supplied by Alcatel didn't work and was scrapped. The question is, at that time, was Alcatel evaluated rigorously or was its entry into the business system of TM in Malaysia and also Indonesia, conducted under strict terms of reference of TM's robust and transparent procurement policy.
The way Alcatel was pushed through for the Sumatran market raised serious objections by certain people. It must have been very serious indeed to have led to the resignation of Dato Nurjazlan Mohamed who at that time was a board member of TM and also member to the board audit committee.
So, let us take TM on its "believes that it has a robust and transparent procurement policy and adheres to policy, processes and current best practices". Further, TM added:-
"We take these allegations seriously and we will extend all necessary co-operation where required to the relevant authorities. Through a proposed board sub-committee, we will further conduct a thorough internal investigation to safeguard the integrity of our procurement process and Code of Business Ethics. "TM has a zero tolerance policy towards such improprieties and will take appropriate action in the event that any of our employees were indeed involved," the company said in the filing.
Najib (picture), in his 2011 New Year message, said the government’s plans and programmes would not be successful without the support and cooperation of the people.
“Let’s not be satisfied and just sit back to be mere critics. Let’s mould a better future for the coming generations.
“The power to build lies in the hands of the people. Fulfil this responsibility as best as you can,” he said.
Najib reminded the present generation not to gamble away the future of the coming generations by making wrong decisions.
“This is not the time to experiment, but a time to renew and strengthen the trust in what has been proven to be effective,” he said.
The prime minister said the government always adopted full responsibility in the management of the country, in particular the economy.
“As a government sensitive to the pulse of the people, we will not at all neglect the people’s interests by making a promise or a decision which seems to be popular but is actually to the detriment of the interests of everyone,” he said.
He said any government which promised or formulated popular but irresponsible policies would gain recognition or support in the short term, but in the long term it would be the people who would suffer.
“Learning from mistakes, throughout 2010, we built a strong foundation to ensure that the nation’s potentials and resources can be stimulated and mobilised towards achieving the national vision,” he said.
He identified the Government Transformation Programme (GTP) along with the six National Key Result Areas (NKRA) and the Economic Transformation Programme (ETP) with the 12 National Key Economic Areas (NKEA) as the basis of the New Economic Model, the 10th Malaysia Plan and Budget 2011, which served as a comprehensive roadmap to raise the living standard and quality of life of the people to a higher level.
“All this while, the government, which was given the mandate, has striven with sincerity to meet the people’s needs and national progress to the best of its ability.
“Unfortunately, some quarters have arbitrarily accused the government of being inclined to implement specific projects, particularly mega projects. Such accusations are not true at all,” he said.
Some people, especially the opposition, had criticised the construction of several projects including the North-South Expressway, the Petronas Twin Towers and the Penang Bridge, he said, adding that they were now too embarrassed to admit their mistake because these projects had brought much benefit to the people.
“The question is if their opinions have proven to be wrong in such major matters, how can the people possibly trust any of their promises?” he said, adding that the opposition’s proposed 100-day reform announced recently would only raise expenditure as it did not consider the realities of the national revenue and sources of funds.
Saying he hoped that the people would be able to make their own evaluation, Najib said the government had all along focused on the objective of ensuring sustainable economic growth.
This was because a boost in national wealth would provide for a rise in expenditure and enable the implementation of social justice, he said.
“It is directly proportional, meaning an increase in government revenue will result in a rise in expenditure for the people’s well-being,” he said and urged the people regardless of race and religion to heed the call to strive for the pinnacle of success. – Bernama
Students who join the Civil Defence or Rela cadet corps in school may find themselvesexempted from National Service under a Home Ministry proposal.
The ministry is seeking to recruit some 60,000 students for the two uniformed corps which offermilitary-style training as part of co-curriculum activities for secondary schools.
“The training provided by Rela and the Civil Defence is even tougher than National Service. These two corps are also uniformed groups. Read more AT THIS LINK.
