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8.5 Community Relations and Emerging Recentralization

There exists a contradictory situation in Malaysian local government where the principles of good governance are endorsed and strongly encouraged by the central government [17–19], but seldom carried out and if so, reluctantly. This is because existing capacities of local government’s administrative and institutional systems are inadequate for operationalizing good governance on the ground. Thus far, the practice by Malaysian local government in managing their community is exclusively an exercise in centralized administration. The dilemma of local government is the need for it to acquiesce to community demands in the face of global change and increasing awareness of the right to participate, but not being prepared to confront the consequences of sharing in decision making, increasing community participation, being more transparent and accountable.

While the traditional relevance and position of local government in Malaysia remains, its approach vis-à-vis the community requires re-orientation in line with global demands for greater decentralization, emerging localism, devolution, and empowerment. Generally, there is a need to narrow the continuing distance between state and society with changing perception and growing demands for empowerment [20]. This is one of the intriguing paradoxes of globalization generating a new interest in the relationship between civil society and government; and as civil society flourishes, there is a weakening of state institutions especially at the national level [21]. Driven by the pressures of society’s changing norms and values and increasing liberalization, local government in Malaysia faces the daunting challenge of responding to public participation and engaging the community in its decision-making process.

Political changes and power transformation that are unfurling within the region has also caught the attention of the Malaysian community. The dramatic but successful struggle for independence in East Timor and the flourishing of democracy and decentralization that transformed every region in Indonesia through the era of reform, referred to as era reformasi [22], to a certain extent captured the imagination of the Malaysian public. In addition, globalization gave rise to the concept of empowerment that was embraced by the local community, and citizens have tried to participate in political and social issues that affect them. Perhaps the recent public rallies and street marches, as mentioned earlier, are conspicuous indicators of the community’s desire to be actively engaged and involved in the process of governance. Inevitably, this brings attention to the issue of local administration and local government’s ability to work with and for the citizens. In enabling local government in Malaysia to meet the demands of the community for transparency, accountability, and participation, it too has to have the power to control its own affairs. However, Malaysian central-local relations reflect the importance of the federal government rather than those of the lower tier governments. While nations around the region subscribe to the process of decentralization and a shift of power from the center to local or district, by contrast, there is a resurgence toward greater central control and dilution of local autonomy in Malaysia.

8.6Process Toward Recentralization and Weakening Decentralization

Recentralization or, in other words, the process of reversing powers from lower tier governments to the federal/central government, began in the 1960s when erosion of local government autonomy gathered momentum with the suspension of local elections in 1965. Local elections were subsequently abolished and the “take-over” process of local government administration by the respective state governments continued, fueled by allegations of maladministration and mismanagement [23].

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Meanwhile, the federal government proceeded with the setting up of a royal commission to look into these allegations in local government, which led to it being subsumed into state administration. But the balance of power arrangement was such that the federal government still managed to maintain its control over local government via its powers over state governments.

The implementation of the Local Government Act 1976 by the federal government set the framework for the restructuring of all local authorities in Peninsular Malaysia, beginning with the Penang Municipal Council. The main reasons for the restructuring were to achieve the objectives of socio-economic development, national unity, democracy, freedom, and efficiency in local government; in fact, the bases of decentralization as characterized by A. F. Leemans [24]. This instrument was used by many state governments to actually diffuse the powers of those local authorities that had posed problems for them in the past. This was the case of the Penang state government that quickly seized the opportunity to implement and use the Local Government Act 1976 toward this end.

However, as events unfolded, decentralization through a restructured local government did not occur but instead became a process for recentralization, as the Royal Commission Report again reiterated that, “In promoting decentralized local government not all central or state governments are fully cognizant of the objectives of decentralization [25].” Thus far, the policy of promoting decentralization has been reluctantly exercised. Using this act, the state government dissolved the Board of Management managing the Penang local council and set up the Penang Island Municipal Council. The state government dismissed all the uncooperative members of the old board and established in its place a new council with councilors appointed by the chief minister that were beholden to the state government. In this manner, the Penang local council became the first restructured local authority in Malaysia that had in place a council that would almost certainly give no opposition. By this example, it was clear then that although the Local Government Act was intended to establish the process of decentralization and to give powers to the restructured local authorities, the immediate effect faced by the Penang council was the reality that the process had made it yet more subservient to the state government, which had effectively assumed overall control. This event demonstrates how an act of the federal government has been used to reduce the powers and autonomy of a local authority. A further contribution to the erosion of local autonomy was when one of the recommendations for local elections to be resumed was not accepted by the federal government.

8.7 Reinforcing Centralization

Advocates of decentralization have pointed out that governments tend to emphasize deconcentration at the expense of devolution when facing challenges from local governments; and Malaysia is no exception [26]. The cut back on local self-government in Malaysia was based primarily on the premise that centralization would hasten socio-economic development and achievement of national unity in a country that is made up of different ethnic groups and largely dissected between the urban and rural areas.

Many a time this is carried out through various policies initiated by the federal government and implemented through its de-concentrated agencies and departments at the state and local levels. It is an on-going process that has helped the federal government to recentralize its powers over the lower tier governments. Indeed, using reasons such as maintaining national unity, achieving uniform growth, and spreading development in the country, central policies rather than state or local policies are initiated and implemented for the nation. In 2006, the federal government initiated

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With the right to local elections taken away, representation is now through the appointment of local councilors. At present, all local councilors in Malaysia are appointed by their respective state chief ministers with biasness toward the ruling party. Thus far, nominating and appointing members of the component parties of the ruling National Front Party to become councilors in local government has become the usual practice. Inevitably, the local councilors become subservient to the state and adherence to its directives is to be expected.

Today, there are 144 local authorities in Malaysia, made up of city halls, city, municipal, and district councils, and a town board (see Table 8.2). In effect, these local authorities provide services to about 84.4% of the population, yet these people do not have the right to vote and are not directly involved in the decision-making process of their local authorities [31]. In the future, with the process of change and globalization, increasing literacy and regional movement toward decentralization, this large population mass and its impact on local government cannot be ignored. Resuming local elections would mean that the citizens will have the right to elect their local councilors, which presently total around 3456 (there are approximately 24 councilors in each of the 144 local authorities as provided for in the Local Government Act). Indeed, the representation by these councilors of the local citizens would be more meaningful if they were duly elected, unfortunately because they are appointed, the word “representative” appears a misnomer in the Malaysian context.

Through prolonged absence of local government elections, it is inevitable that the community now regard the state appointment of councilors as the accepted norm of local representation. They only express that the councilors should be appointed from among the local citizens, but who do not represent any political party [32]. Local autonomy and democracy, which are the basic tenets for local government and decentralization, have been relegated to objectives of least importance as central government is reluctant to relinquish powers.

8.9 Where to Decentralization?

Decentralization is invariably complex and the term can be used and understood quite differently depending on the experience of the particular country. For instance, in parts of Africa, depending on whether they have been influenced by the British or French traditions, decentralization will be interpreted and used quite differently [33]. Until its independence in 1957, Malaysia was under British rule and, consequently, subscribes to the British understanding of decentralization. In this context, decentralization refers to the delegation of government responsibilities from a higher level

Table 8.2 Malaysia: Number of Local Authorities by Type, 2008

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of government to a lower level of government. De-concentration refers to the delegation of higherlevel government duties to lower level units while authority remains with central government. Devolution presumes the assignment of powers and resources to autonomous local government where the use of resources is decided locally and management is accountable to the local leadership.

In Malaysia, the administrative structure attempts a combined approach of decentralization, devolution, and de-concentration, but leaning toward the central powers of the federal government although seemingly encouraging administrative decentralization [34]. In a sense, decentralization of this nature seeks to improve governance and service delivery by reducing delays and bureaucratic processes at different tiers of governments. However, one would also expect that a significant effect of decentralization would similarly be experienced by the community, whereby the process of delegation of powers to citizens is expected to follow. A relationship between government and the people in a democratic environment provides the condition for delegation of powers through participation in public sector activities including electing the local leadership.

In this country, the interpretation and exercise of decentralization is apparently based and justified on the existing relationship between states and between states and the public, as well as due to events that took place when local government reformed. Seemingly, despite these fundamental reforms, there is an alarming lack of concerted and coordinated initiatives to delegate further autonomy to local government. Instead, there is a growing trend toward strengthening centralism and weakening decentralization. In an effort to harmonize relationships between states and local government and between local government and the community, the idea of decentralization has become the link for formal harmony. Formal harmony is perceived through institutionalized policies, rules, regulations, and basically the law. This mechanism weakens considerably when exercised at the third tier of government, i.e., between local government and the community where, as a consequence of institutionalized regulations, formal representation of the community via the process of voting in local government elections is completely absent. It is obvious that implementing administrative decentralization without adequate political reforms and devoid of political decentralization will result in informal discord in society. This supports the notion that the concept of centralization is further reinforced at the expense of decentralization. On the other hand, the implementation of Local Agenda 21 (LA 21) in 2000 by the Ministry of Housing and Local Government and its characteristic “bottom-up” approach actually acknowledges that a relationship exists between local government and its community [35]. Unfortunately, in Malaysia, LA 21 did not achieve political decentralization via formal delegation of powers from local government to the community. The manner in which some local authorities operationalize LA 21 is not dissimilar to a form of guided participation where significant control still remains with local government. Arising from the absence of a formal and legitimate transfer of powers and accountability to the community, local officials instead, become primarily accountable to themselves and local influential elites. Apparently, Africa experiences a similar condition and it appears to be a recurring trend among some of the African nations [36].

Invariably, the absence of direct civic involvement, such as community participation in local government decision making, has created a discord between local government and the public. For instance, the communities’ participation at full council meetings is not encouraged and attendance is by invitation of the local authorities. Criticisms and expressions of dissatisfaction with local government are constantly made through the local media rather than through councilors, as they are not viewed as the people’s legitimate representatives. The emergence of a range of non-governmental organizations, neighborhood and residents associations is also evident of Malaysian citizens’ desire to be engaged and directly involved in the process of local decision making, which is obviously lacking. It can be recognized that the reform in local government set the tone for centralization

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