Conflict of Interest: Preventing Political Patronage and Corruption in Malaysia

Conflict of interest (COI) and political patronage have dominated our country’s economic and political landscape for decades, permeating every level of government and society. While practices such as government procurement, award of contracts and appointments to certain position are legal due to public policies and laws, they are by no means ethical.

The task to dismantle the six-decade-old issue of COI and political patronage is a monumental one. So deeply entrenched are the way things are done, even the new Pakatan Harapan (PH) government appear to have not escaped from the same old issues.

How did Malaysia get to this stage where COI and political patronage are the norm? The genesis of this issue can be traced to the introduction of affirmative action under the New Economic Policy (NEP), following the racial riots of 1969. The NEP’s primary objective was to achieve national unity through the reduction of poverty regardless of race and restructuring of society to correct the economic imbalances. While the spirit of NEP was to ensure equitable development, the policy’s implementation saw elites, who were politically connected to the ruling party, emerge as the biggest beneficiaries.

COI issues and political patronage was allowed to spread through most sectors of economy. The most obvious example is in the construction industry where Class F contractors are Bumiputera and mostly UMNO members. 1 Contracts for government projects are given to them as a form of reward for ensured support from the grassroots in all parts of the country.

Politicians from the ruling parties were appointed to various positions in government-linked companies (GLCs) and government bodies as a form of patronage and also control by the government over those entities. Many politically-linked companies, especially UMNO-linked companies, were beneficiaries of government projects and contracts starting from the 1980s onwards.

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