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By Neil Khor.
Centrally-controlled finances and economic development policies can only take Malaysia so far. Fifty years into our nation building programme, it is certainly time to rethink the old developmental model. Decentralising power can unleash a wave of innovativeness that will benefit all levels of government. THE RECENT spat between the Penang Chief Minister and the State Development Officer heated up an issue that most people think about but dare not discuss – more autonomy for Penang. Always the bellwether state, Penang holds the potential for being a new model of development for Malaysia.
The best way to make Penang a sustainable and liveable state is to grant its people more sovereignty in determining the type of development they need and the freedom to aspire along diverse paths into the future.
The state has a higher per-capita income than the rest of Malaysia and is responsible for almost 30% of the total value of national exports. Lacking natural resources, Penang has been reliant on its people and foreign direct investments to modernise. But the centralism practiced at the federal level to “spread” wealth across the board has resulted in the unnecessary stunting of strong economies like that of Penang.
Whilst wealth is concentrated in the Klang Valley around Kuala Lumpur, it is now time to look for a different model of wealth creation – one that does not take away from the country’s many centres of growth but instead strengthens them. Like Kuala Lumpur and now, the Iskandar region in Johor, places such as Penang also need enough space in which to work out the type of development best suited to them.
Currently, the politicking is certainly excessive, with three to four layers of bureaucracy administrating a small physical space. Under such conditions, it would be strange if Penang had been able to live up to its full potential. However, Penang can learn from success stories like the Basque region in northern Spain, which recently underwent a great process of rejuvenation. One way to go would be to give fiscal autonomy to Penang, allowing it to collect taxes and manage its own developmental budget. Development that hinders growth
Two examples can show how the present system does not work for Penang. The first involves the uncontrolled development that has been taking place in the state, which does not follow the Structure Plan and Local Plan. Developers will naturally want to maximise profits, but a series of uncontrolled projects has led to unsuitably high population density in places such as Batu Ferringhi and Tanjung Bungah. For one thing, road access had not been properly considered before construction was allowed.
The second example involves swift-breeding in George Town. Although the state government has clearly stated that swift breeding is not suitable for heritage buildings and incessant complaints have come from property-owners in the town, there is still little remedying action being taken. High density development may be suitable for the Klang Valley, but not for Penang. Similarly, swift-breeding may be acceptable in some urban centres but not in a Unesco World Heritage Site like George Town.
In both cases, the red tape thrown up by three layers of government makes the implementation of policies a slow and inefficient process. Federal agencies have to be consulted, and these tend to make decisions that are categorical in nature. In short, the decisions are not only slow in coming, they are also unnecessarily unimaginative.
There is fear that fiscal autonomy for places like Penang will threaten federal unity. However, the present reality is that we are not so much a federation but a union, where state governments have little power to push for development that is suited to local conditions. Allowing more resources mgenerated by the citizenry to be managed mand used at the local level will enhance Malaysia’s rate of development and project innovativeness. Penang’s role in national development
There are three key areas where increased autonomy for Penang will help national development. Firstly, allocation of resources should be based on the amount of income generated by a state or region. Penang’s success as a manufacturing hub since the 1970s was partly due to its superior infrastructure as compared to the rest of the region.
With little investment in infrastructure – we should over the last decades have upgraded public transport without being held back by the national car policy – Penang will not be able to leap into a more knowledge-centric economy. In short, the right to impose an infrastructure-upgrading tax, for example where citizens contribute one ringgit to be matched by the federal government, will supply the state government with seriously useful resources.
Secondly, the state government should be given more autonomy over land matters.
Although land matters already fall under state government purview, there is a lot of overlap. Once the state government agrees on a particular Local Development Plan after consultation with the public, exceptions to the rule should not be granted easily.
Obviously, the federal government should keep out of land matters, and even when construction on federal land is involved, the state and local governments should have the final say.
Lastly, autonomy does not mean handing over power to the elected state government alone. Instead, it means wider participation by locals in the decision-making process. Local government elections have to be constructed in such as way that politicking is reduced; and candidates must stand as individuals and not as representatives of any political party. They should preferably be born in the state or are rate-payers. With autonomy comes greater responsibility.
Under the present system, a state government can always pass the buck to the federal government; and the latter can then plead ignorance or claim a misunderstanding.
The local government now, comprising appointed and not elected councillors, is only accountable to itself. In a democracy, we need all three branches of government to be responsible to us, the people who eventually have to pay in taxes and blighted futures. ** Republished with permission.This article first appeared in Malaysiakini on August 2, 2010 as “Autonomy for Penang in National Interest". It was later republished in the September issue of the Penang Economic Monthly, a publication of the Socio-Economic and Environmental Research Institute (SERI) in Penang. To contact SERI, call 604 228 3306. Neil Khor is a co-author of Non-Sectarian Politics in Malaysia: The Case of Parti Gerakan Rakyat Malaysia (2008).
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