Poorer Malaysians pay highest price for corruption, say experts

 Tan Peck Leong says Malaysians should see corruption losses not merely as figures, but as schools, hospitals, scholarships and other opportunities they could have had.

Experts say corruption and leakages hit poorer Malaysians hardest because they rely more heavily on public services such as government hospitals, schools, transport and financial assistance.

PETALING JAYA:

Corruption does not send a bill to a poor family, but its price can show up in the hospital queue that never gets shorter, the school that remains run-down, or the scholarship a child never receives, say experts.

That, they say, is why poorer Malaysians can end up feeling the loss of public money far more acutely than the billion-ringgit figures suggest.

Tan Peck Leong.

Economist Tan Peck Leong said sums such as RM100 million, RM500 million or RM1 billion were simply too large for most ordinary Malaysians to imagine, causing the real consequences behind them to be lost.

“Perhaps the bigger question is: ‘What kind of Malaysia did we lose the opportunity to build?’” Tan said.

Tan said the losses should instead be seen in the schools, hospitals, clinics, safer communities and better infrastructure Malaysians could have had.

Citing MACC’s estimate that corruption cost Malaysia RM277 billion in economic output over five years, Tan said that was equivalent to more than four years of the current education ministry budget.

In 2023 alone, more than 10,000 students, or 2.6% of total candidates, were absent from Sijil Pelajaran Malaysia (SPM) examinations, with financial strain being a major factor for many.

“Their life could have been different if this money that we lost from corruption and leakages were channelled to them,” Tan added.

Ahmad Zaharuddin Sani Ahmad Sabri.

Political analyst Ahmad Zaharuddin Sani Ahmad Sabri said the burden fell hardest on Malaysians who had the fewest alternatives.

“The rich may be able to pay for alternatives, but the poor depend on government schools, hospitals, public transport, assistance and opportunities created by the state.

“So when public money leaks, the poorest often pay the highest price because they lose out most on what that money could have provided,” Zaharuddin told FMT.

He said the Tabung Haji case offered a more personal way of understanding the scale of such losses.

The RM12.6 billion in investment losses identified in its recovery plan, for example, was equivalent to the full RM33,300 haj cost for about 378,000 Muassasah pilgrims.

“These are the depositors’ savings. Behind that money are families, and people who saved little by little for years with one dream: to become a guest of Allah,” he said.

Earlier this month, religious affairs minister Zulkifli Hasan told the Dewan Rakyat that Bank Negara Malaysia had issued five warning letters over TH’s financial position between 2014 and 2016, saying its financial crisis could have been contained and a government bailout avoided had the warnings been acted on.

Citing EMIR Research’s estimate of RM4.5 trillion in wider economic and opportunity costs from corruption and leakages over the 26 years from 1997 to 2022, Zaharuddin said the figure was equivalent to roughly 300 years of the current RM15 billion annual STR and SARA allocation.

Nazari Ismail.

Meanwhile, Universiti Malaya economist Nazari Ismail said that when such losses involve public institutions, the government may have to spend more, borrow more, and pay interest on that debt—money that could otherwise go back to the rakyat through welfare and public services.

“When serious leakages increase government spending, the rakyat have to work harder to pay the taxes needed to cover it. The government also has to borrow more, including from the wealthy through government bonds,” he said.

Nazari said such lenders stood to benefit from the borrowing, and could “profit twice” if they had also gained from corruption.

A vote is not a blank cheque

Zaharuddin said, thus, 1MDB and Tabung Haji should be seen as “costly lessons” for voters on the importance of ‘amanah’, or trustworthiness, when deciding who should be given power over public money.

“This is where our democracy must mature. A vote is not a blank cheque,” he said.

He said voters were not merely choosing a government, but also deciding who would be entrusted with billions of ringgit, and who could determine the price of mistakes that present and future generations may eventually have to pay.

“A country does not go bankrupt because its people are not patriotic enough. But it can be damaged when trust is placed in the wrong hands and institutions are too weak to stop wrongdoing or choose to look the other way.”

As of June 30, the government had paid RM42.5 billion in 1MDB debts and commitments, while another RM8.9 billion in sukuk principal and interest remains due when the notes mature in 2039.

Zaharuddin said race, religion and political personalities often commanded more attention because “emotion is easier to sell”, while governance required people to think, understand and scrutinise issues that could appear dull.

“A statement about race can trigger thousands of comments within hours. A religious speech can go viral.

“But who wants to read a 300-page audit report?” he said, adding that there was little point loudly invoking race, religion and patriotism if those same values were not reflected in how public money was managed.

Make corruption harder to commit

Anti-graft watchdogs said voters should therefore demand reforms that make corruption harder to commit, rather than measure anti-corruption efforts by arrests made only after public money has been lost.

Jais Abdul Karim.

Malaysian Corruption Watch president Jais Abdul Karim said Malaysia had made progress, but stronger procurement transparency, whistleblower protection and institutional independence were still needed.

“Transparency without accountability is insufficient,” he said, adding that the public should know what happened, who approved it and what happened to those responsible.

Meanwhile, Transparency International Malaysia president Raymon Ram said citizens should be able to “follow a ringgit of public expenditure from allocation to outcome”, including knowing who made key decisions, what professional advice they received and whether conflicts of interest were declared.

Raymon Ram.

He said Malaysia had historically been too comfortable with “post-scandal accountability”, where investigations and asset recovery came only after the damage was done.

“A mature system should place much greater emphasis on pre-scandal accountability,” he said, citing open procurement, independent boards, empowered internal auditors, whistleblower protection and parliamentary scrutiny as measures to prevent wrongdoing before a scandal erupts. - FMT