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compete on a global front if its civil service does not change, prompted many of the reform efforts. The period was also signified by a global recession, and Malaysia was not spared the effects of the recession. In a move to steer the country out of the slump, the government embarked on major policy reforms that were to have radical and far-reaching consequences on the structure and culture of the Malaysian civil service.

However, despite the strides made in public service delivery, critiques have been quick to point out that the efficiency gains have been superficial, and the more deep-seated culture change within the public sector has not really materialized. Complaints received by the Public Complaints Bureau have been on the rise, ranging from issues such as delays in service provision, abuse of power, misconduct of officials, to the more serious problem of corruption. The civil service has recorded a 58% increase in formal complaints from the public, and the Public Complaint Bureau receives an average of 4000 complaints per year [31]. While the figure is high, it must also be noted that the Public Complaint Bureau has made it very easy for the public to lodge their complaints through its website complaint system. Thus, despite the criticisms, the Malaysian civil service has moved on and the government is committed to making it performance driven. The recent establishment of the National Unity and Performance Management Unit under the Prime Minister’s Department to implement and monitor national key performance indicators and national key results areas (N-KRA) is a move toward enhancing performance management in the civil service.

11.7 Reform in the Malaysian Civil Service

Reform in the Malaysian civil service can be viewed from two perspectives. The first involves major government policies, such as Malaysia Incorporated and privatization; while the other is administrative reforms that were aimed at beefing up the service quality and productivity of the public sector. Administrative reforms aimed at improving service delivery are meant to contribute to and support the implementation of major government policies. These include the introduction of quality initiatives such as Quality Control Circles, Client’s Charter, Total Quality Management, ISO 9000, and E-government, to name but a few.

Reform efforts in the Malaysian civil service were largely initiated during the 1980s, influenced by renewed interest in public sector reform in countries such as Britain, New Zealand, and Australia, and the highly influential 1992 book, Reinventing Government by Osborne and Gaebler [32]. The Malaysian civil service boarded the reform train too and consequently subscribed to an extensive privatization policy, as well as policies that are business-friendly such as Malaysia Incorporated and the “Look East Policy,” which seeks to emulate the lessons of South Korea and Japan, for example. It is undeniable that the leadership of Premier Mahathir provided the political will for reform efforts within the Malaysian civil service. Since its independence in 1957, the public sector in Malaysia has been the prime mover in the country’s development. Thus, the period from independence through the 1980s was characterized by institution building and a proliferation of public enterprises and government agencies, as the public sector was entrusted with implementing the country’s 5-year economic plans. However, the global economic recession of the 1980s and the resulting financial constraints forced the Malaysian government to reassess its development strategies in the face of burdening massive public expenditure. There was also general pessimism in the ability and capacity of the government and its affiliate organizations to undertake the task of economic and industrial development of the country. The prevalent belief was that the government bureaucracies were inherently incompetent to perform this task through traditional public enterprises and state corporations. Thus, new directions and strategies were

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formulated to chart the course of the country’s development. This resulted in a shift in the role of the government from one of direct intervention, regulatory and system maintenance, to strategic national planning, development support, and more flexible administration [33].

Consequently, the Malaysian government introduced a number of major policies throughout the 1980s. The “Look East Policy’ was introduced in 1982, which called for the nation to emulate the work ethics of more developed countries in the East, such as Japan and Korea [34]. Another major policy, “Malaysia Incorporated,” patterned after Japan Inc., was introduced in 1983, and this policy had a far-reaching impact on the Malaysian civil service [35]. Malaysia Incorporated stressed the need for closer cooperation and collaboration between the public and private sectors. Under this concept, Malaysia is viewed as a company that is jointly owned by both the public and private sectors. The profits earned are shared by both sectors. Malaysia Incorporated requires the public sector to view itself as facilitators and beneficiaries of a private sector-led economic development, rather than a hindrance to the private sector through bureaucratic procedures and processes [36]. The public sector should provide the right infrastructure and environment for Malaysian businesses to have the competitive edge to compete globally.

The concept behind Malaysia Incorporated was alien to the Malaysian civil service, and the country at large. Critics saw the move as compromising the public sector to the interests of the private sector. The civil service has always been viewed as an independent body that showed no bias in carrying out the policies and programs of the government. Within the civil service too, there was apprehension that Malaysia Incorporated would lead to a diminishing role for the civil service [37].

Critics aside, the implementation of Malaysia Incorporated saw the establishment of a number of public-private sector consultative channels, such as the Malaysian Business Council (MBC) and the Malaysia Incorporated Officials Committee (MIOC). The MBC represents the highest forum for consultation between the public and private sectors, and is chaired by the prime minister. The MIOC, on the other hand, is the highest public-private consultative panel in the civil service, and is chaired by the chief secretary to the government [38]. Dialogue sessions between the public and private sectors are also regularly held in order to obtain feedback from the business community on areas of improvement in public service delivery. Administrative reform efforts, such as quality improvement efforts, Client’s Charter, “paper-less” civil service, and implementation of ISO 9000, have all been attributed to policy implementation of Malaysia Incorporated.

The Malaysian government also joined the privatization bandwagon that took place widely during the 1980s, shortly after and during Margaret Thatcher’s market reform era in Britain. Malaysia introduced its Privatization Policy in 1983, and is among the pioneers in the privatization movement among East Asian nations. As Malaysia was among the first few nations to embark on a privatization policy, the initial stages of implementation were rather ad hoc in their approach. The process and direction was made clearer with the release of the Privatization Master Plan (PMP) in 1991. According to the PMP, privatization was defined as the “transfer to the private sector of activities and functions which have traditionally rested with the public sector.” The definition covers entities already owned by the government and those that would normally be undertaken by the government, such as the building of highways [39]. The PMP identified five major objectives of privatization, which were to relieve the financial and administrative burden of the government, to improve efficiency and productivity, to facilitate economic growth, to reduce the size and presence of the public sector in the economy, and to help meet the nation’s development policy targets.

The civil service experienced massive rightsizing soon after the implementation of the privatization policy. Between 1991 and 1995, a total of 29 government agencies were privatized, involving the transfer of 45,546 public sector personnel to the private sector [40]. By 1999, the civil

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service saw a reduction of 105,000 employees from its payroll. The significant impact was led by the privatization of large entities such as the Telecommunications Department, National Electricity Board, and the Postal Services Department, which together accounted for a reduction of 62,575 personnel, or 63% of the entire reduction [41]. The argument for privatization is for increased efficiency and productivity, with the view that the privatized entities, unencumbered by bureaucratic red tape, will move faster. Table 11.6 shows some productivity and efficiency indicators from selected privatized entities.

The objectives of privatization were timely, given the predicament Malaysia was in. Throughout the 1970s, following the implementation of the ambitious New Economic Policy (NEP), the civil service was entrusted with the role to spearhead the country’s economic development through state-owned enterprises as the private sector was deemed insufficient to bear the burden of responsibility. The dual-pronged objectives of the NEP, which was to eradicate poverty and to restructure the society, also called for a state-interventionist approach. This led to the massive proliferation of the civil service, which impinged into the private sector in a decade regarded as the “golden age” of the civil service [42]. In 1965, the country had only 54 state-owned enterprises, which grew to 656 by 1980, and 1010 by 1985. Unfortunately, rapid growth did not yield commensurate gains. In fact, losses were far too heavy and by 1984, the state-owned enterprise sector deficit had reached

Table 11.6 Efficiency and Productivity Gains Indicators of Selected Privatized Entities

Source: Seventh Malaysia Plan, 1996–2000, Economic Planning Unit, Prime Minister’s Department.

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RM6.8 billion [43]. With a change in climate from public sector-led to privatization sweeping the United States and the UK at the same time, it did not take long for the waves of privatization to reach Malaysian shores, given the quandary the country was in. The lure of efficiency and the workings of the “unseen hands” of market competition saw the country privatizing a whole host of services previously provided by the public sector, from utilities such as electricity and telecommunications, the postal service, garbage disposal, sewerage, and water supply; to building and operating highways, airports, seaports, rail transport, and urban public transport such as the light rail transport system; to the sale of equity and assets of state-owned enterprises ranging from the national airline to the government security printing [44]. In a complete reversal of a public sectorled economic development, the private sector was, in turn, entrusted as the engine of growth of the country’s economic development. Scaling down of economic activities from the public sector to the private sector has allowed the public sector to focus more on policy development and strategy formulation, and in tackling issues that are not attractive to the private sector, but of utmost importance, such as poverty eradication. Thus, a country that was premised on an interventionist role of the state in the 1970s went on to pursue a minimalist path through the various privatization projects that were carried out from the early 1980s onward.

However, the privatization efforts carried out by the government were not without their critics.25 Issues such as conflict between public and private interests, the distributive role of government, and the ability of the private sector to undertake the social and other non-economic objectives of the government have often been cited [46]. Apart from that, the question of supervision and grouses on pricing and charges imposed by privatized entities, and service standards were other distressing issues [47]. Nevertheless, privatization continued to be an essential feature of Malaysia’s economic development strategy. During the Eighth Malaysia Plan period (2001–2005), privatization contributed to the growth and development of the economy, in line with private sector-led growth strategy and the Malaysia Incorporated Policy. During this period, 35 projects were privatized, of which 10 were existing projects and 25 new projects. At the same time, 6249 employees were transferred to the private sector, reducing the government’s administrative burden. Savings in capital expenditure to the government amounted to RM28.6 billion, and savings in operating expenditure was RM126.9 million. Proceeds from the sale of government equity amounted to RM40.5 million, while the sale of assets was RM21.7 million [48]. Privatization was carried on into the Ninth Malaysia Plan (2006–2010) and will continue to be used by the government as a vehicle to facilitate economic growth in line with the role of the private sector as the main engine of growth in the country’s economic development.

Reforming a civil service that is deeply embedded in a bureaucratic culture that has been nurtured for over a century, and one with over a million employees, is without doubt, a gargantuan task. So much so, that a prescription of a “paradigm shift” would be the order of the day. Various reform efforts, right from the simplest measures of wearing name tags and clocking-in system, to efforts aimed at transforming the very foundation of the civil service, such as privatization and Malaysia Incorporated, were all aimed at producing a world-class civil service that is able to face up to the challenges of globalization and a new world order. Malaysia Inc., for example, drastically changed the way the civil service was expected to play its role in national development. Privatization has also allowed the country to progress economically and has reduced the burden of the government in providing services to the public. But beyond the rhetoric, the reality of reform is further than it seems.

Without doubt, the Malaysian public has benefited much from the extensive use of ICT through the E-government initiative, but unfriendly applications and systems failure have also

25For an extensive critique of the implementation of privatization [45].

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