Malaysia is one of the most corrupt countries in the world (Gomez). Executives working for big corporations say that fraud is very common there. Besides, there is a difference between practices claimed by companies and how they are actually applied (Gomez). According to Ernst and Young Survey, 39% of people believe that bribery and corruption occurs frequently in Malaysia (Gomez). Moreover, respondents of the survey state that these illegal practices have recently increased because of the hard economic situation and competition. Anti-bribery and corruption policies do not have significant effects. This paper will discuss the causes, effects, implications and possible responses to the corruption in Malaysia. Recent statistics demonstrates that the country has all chances to reduce its corruption levels. However, the country has all chances to reduce the corruption levels as Malaysia’s corruption perception indexes have improved recently and the government continue to introduce new measures against corruption.
According to the researches, such aspects as power, moral values and opportunity cause corruption in Malaysia. For inhabitants of this country, power means that individuals in privileged position can do everything they want. Power encourages people to behave corruptly. Besides, power in combination with opportunity encourages humans to corrupt actions. Some individuals that have “power in Malaysia, abuse their positions”. They use their positions, encouraged by the opportunity provided, to engage in corrupt practices. In particular, many politicians have been holding power for many years. During this time, they have done many corrupt acts without any punishment. This made them believe they have power to behave in illegal way. Normally, power with position arrives if a relative, friend or business partner in the project supports the person. Overall, power is followed by such negative acts as “bribery, conflict of interest and exploitation”. Apart from that, power could be subdivided (depending on the context) into political power, authority power and controlling power. Political power is associated with political impact. Authority power occurs when individuals can do everything with their position. Moreover, they have authority to demand. Controlling power denotes restricted separation of duties. All these subcategories of power lead to corruption.
Power is strongly connected with opportunity. If individuals have an opportunity to do something, they use it. Therefore, opportunity is believed to be one of the most important causes of corruption. Usually, opportunity is available when one person possesses some kind of power. In Malaysia, the opportunity for doing corrupt acts is mainly present in the government. Thus, politicians have a wide range of opportunities in such area as “procurement of projects”. Therefore, political power is considered a significant instrument for usinf opportunity to engage in corrupt activities.
Another cause of corruption in Malaysia is “lack of moral value”. People with power often possess such characteristics as selfishness, avarice and temptation. At the same time, they do not have enough moral principles and honesty. Some of these causes of corruption clearly could be found in any country. However, not all countries have all of them. For example, politicians could have power and lack of moral values but no opportunity. In Malaysia, politicians have all three factors. They have a significant power to do what they want. People in privileged position have also many opportunities for acting corruptly without being punished. Finally, they do not feel any moral restrictions for behaving immorally.
Corruption causes many negative effects in Malaysia. First, it has a negative impact on the country’s social, economic and political life. Transparency International publicizes corruption ranking each year, and it demonstrates that developing and underdeveloped countries have a high level of corruption. This means that corruption directly affects the economy. For instance, it leads to problems in business. Companies that are already on the market have to pay bribes to people with power to be able to operate without any challenges. This raises the cost of doing business up to ten percent. Foreign companies are afraid of coming to Malaysia because of high risks. In fact, there is a certain interdependence between the amounts of investments and country’s place in corruption ranking of Transparency International. The thing is that if the country has low position in the ranking, this leads to its isolation, decreased investments and deterioration of the nation’s reputation. Malaysia took the 53rd place in 2013, which is not a good result. To some extent, the country’s place is the corruption ranking is an indicator for business in deciding whether it is reasonable to bring investment to a certain country or not. As Malaysia holds the low position in the ranking, this means that the country constantly loses potential investors.
Corruption also leads to income inequality and poverty. Households with low income and businesses are supposed to pay greater part of their income in bribes, comparing to households with middle and high income. Bribes are considered a regressive tax for poor people and businesses because they have to give bigger proportion of their income than rich people. In addition, people with low income face the necessity of paying bribes more frequently than people with high income do. This occurs because unprivileged individuals interact with public institutions more often. Therefore, it becomes more difficult for Malaysia to deal with the poverty level in the country. Poor people cannot improve their financial position since they have to pay many bribes. Other related problems are low literacy levels, high mortality rates and worse general human development results. For example, people with low income cannot afford to have proper nutrition, health care and education. As a result, they cannot make a good professional career or improve their social status. Usually, they are supposed to work on low-paid positions. Businesses cannot offer higher salaries and better working conditions due to spending significant costs on bribes.
Apart from that, corruption negatively affects public services. The corrupt government may reduce the tax revenue, so the country has fewer finances for delivering public services to population. Thus, Malaysia spends less money on healthcare, education and social protection than developed countries. At the same time, it has one of the highest social protection indexes in Southeastern Asia (0.155) (Handayani). Only Singapore spends more on social protection (social protection index reaches 0,169) (Handayani). This could be explained by the fact that Malaysia is a country with upper-middle income. Increased spending on order, law, defence and energy follows reduced spending on education, social protection and healthcare. In particular, the government of Malaysia reported about their attempt to modernize the country’s armed forces.
Therefore, the corruption has the greatest influence on the country’s economic growth and development. However, the effects of corruption are not always direct. Besides, corruption could have positive impact, particularly it may help to deal with institutional drawbacks and ease trade and investment. At the same time, it has a negative impact on the country’s overall economic growth because corrupted nation lacks transparency and equal rights for all businesses. For example, not all companies are able to get access to the government’s institutions in order to facilitate their operations. Other problem is that poor people have to pay more bribes than rich ones. This leads to income inequity as well as limited spending on social protection, education and healthcare. As a result, inhabitants of Malaysia have low trust in state authorities.
Malaysia has already launched anticorruption reforms. However, researchers believe that these measures cannot be real because they damage the foundation of the leading party’s access and monitoring of power (Lopez). In addition, most of inhabitants have contradictory attitudes towards patronage and corruption. Nevertheless, the country has managed to reduce corruption levels over last few years. The first anticorruption reforms began in 2009 when the Prime Minister of Malaysia had brought in a zero tolerance policy for corruption (Lopez). A wide range of measures that helped to implement anticorruption policy followed this policy.
The main reason of slow reduction of corruption in Malaysia is dependence of the country’s Anti-Corruption Commission. The Department of the Prime Minister controls the commission because it provides financing. The Commissioner has limited rights because his position is not secured by the Malaysia’s Constitution (Lopez). Despite finding the main reason for ineffectiveness of anticorruption reforms, is the fact that it is quite difficult to improve the situation. The thing is that Anti-Corruption Commission cannot become completely independent. There are two obstacles. First, the country’s ruling party will not allow doing this because it is a “patronage machine” (Lopez). The difference between patronage and corruption is insignificant, so it is difficult to determine it. For instance, ex-Prime Minister accused the current Prime Minister of giving bribes to all the PMs of UMNO (Lopez). However, it was impossible to determine whether this situation was the case of corruption or bribe patronage. Second, the attitudes of Malaysians towards power and corruption slow down the process.
Therefore, the real fight against the corruption in Malaysia would start only after changing the views of Malaysians towards corruption and patronage. They should realize that both concepts are negative for their country. This would change their attitude towards Barisan Nasional, the country’s leading party. In particular, they would stop giving most of their votes to this party (the party was not a leader only during elections in 2013). Only the idea of losing popularity among Malaysians might encourage politicians to start effective reforms. Today, state officials are not motivated to do anything because they have many benefits due to corruption.
In conclusion, the recent surveys demonstrate that Malaysia has the high level of corruption. Malaysians believe that this occurs due to such aspects as opportunity, power and weak moral values. This means that individuals in privileged positions have enough power to do what they want. Besides, they have opportunity to act corruptibly. It is particularly common for people working for government. Weak moral values mean that Malaysian politicians are selfish and greedy. They are not restricted by any religious and moral norms. The corruption primary affects the country’s economy because corruption level is an indicator for investors. The national image of Malaysia is also negatively influenced. Apart from that, the country has fewer resources for providing public services. The inequity and poverty increases, which also leads to reducing trust in institutions. Businesses need to spend money on bribes, which does not allow them to improve salaries and working conditions for the labour forces. The current anticorruption reforms do not bring significant outcomes. The real results would appear only after changing attitudes of Malaysians towards patronage and corruption.