Malaysian case study
Malaysia has been in the spotlight for its corporate governance issues in the past decade. High profile incidents, such as the 1MDB saga and cases of alleged mismanagement in the public sector, have not helped in fostering trust among Malaysians. The new government has pledged to create a better environment for transparency and accountability.
What are the public financial management initiatives that the government is implementing in Malaysia?
Tony Pua Kiam Wee, Political Secretary to the Minister of Finance and Member of Parliament of Malaysia:
Since we have taken over the new government, there has been nonstop work. A lot of effort is being put in to improve the process of government transparency, in terms of improving competency and efficiency, in order to create a better environment, a better government, for the people who have chosen this new government.
Could you please describe the principles of competency, accountability and transparency (CAT) that the government is promoting?
Our mandate is given by the people to clean up the act. And hence it is very important for the new government to focus on being accountable. Being accountable to the public, to Malaysians, for whatever we do. Being competent to ensure that whatever we do actually delivers the result that we intend and being transparent so that no more will scandals like 1MDB happen in Malaysia in the future. And hence this is our little motto: competency, accountability, and transparency - CAT as we call it.
How does the government implement CAT in its policies?
I think very simply, in the past, a lot of mega contracts have been awarded directly by the previous companies. We want to change that culture. We want to ensure that an open tender environment is present for all these contracts to ensure that the taxpayers’ money is actually used properly.
How can digitalisation help the public sector in applying PFM reform initiatives?
We intend to use technology where applicable to ensure transparency, and reduce corruption. For tenders, obviously, we want to improve transparency via better access to information and definitely the digital side of the economy helps us in ensuring that the best people who are able to do a project gets to know about it and are able to participate in these projects.
What’s an example of how CAT makes a difference for citizens?
The previous government signed a contract to build an MRT system for nearly 40 billion ringgit, that's $10 billion. The project is nearly 40% complete. When we came in, we actually reviewed the contracts and discovered that they have been overpriced. And we negotiated on these contracts. And if they were unwilling to reduce their price of these contracts then we were going to cancel the contracts and then reopen the 10 contracts by the vendor to obtain the best price for these contracts. Finally, we are able to save a further 8.8 billion ringgit, that's about $2.2 billion, on this project alone.
What would you like to say to financial professionals working to implement PFM reform in Malaysia and around the world?
What makes a difference between an accountant that would be able to deliver good financial management versus an accountant who can’t is not the technical skills, but his or her ethics. If a good accountant, technically good accountant wants to be able to ensure good financial practices. He will ensure that any wrongdoings get reported and disclosed accordingly.
Aaron Saw, Head of Policy and Technical, ACCA:
The government has a lot of focus on ethics and prudent use of taxpayers’ money for the country's growth and for the effective delivery of public services. I think Malaysia is heading towards a better and brighter future with good public financial management