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Abstract
This paper utilises a political lens in considering the cause for the production of corruption and the role of political leadership. Specifically, the notion of personalisation of power as advocated by Slater (2003) is adopted to portray how the adoption of neoliberalism ideology by an aspiring autocratic leader results in the weakening of the infrastructural power through three strategies: packing, rigging and circumventing. We use Perwaja Steel as a case study to demonstrate the modus operandi of corruption in a state-owned enterprise in Malaysia.
Notes
1 Refer to Transparency International; CPI measures the perceived level of public-sector corruption in 183 countries and territories around the world.
2 Malaysia was ranked as the 53rd in 2013 Transparency International website, 2011 (accessed from https://www.transparency.org/cpi2014/results on 6 March 2015).
3 Cited in Islam message of peace, available at https://islammessageofpeace.wordpress.com/2014/04/29/riba-is-haraam-for-the-one-who-takes-it-and-the-one-who-pays-it-and-it-is-haraam-to-help-with-it-in-any-way-whatsoever/.
4 For a good summary and overview of the literature on the definitions, consequences and causes of corruption, see Everett, Neu, and Rahaman (2006), Tanzi (1998) and Andvig, Fjeldstad, Amundsen, Sissener, and Søreide (2000).
5 BN or the National Front Party was formed in 1973, replacing the Alliance Party which was formed in 1957. It consists of three communal political parties: the Malaysian Chinese Association (MCA), Malaysian Indian Congress (MIC) and the secular United Malays National Organisation (UMNO). There two political opposition parties before 1998 are the Pan-Malaysian Islamic Party (PAS) and the Democratic Action Party (DAP).
6 Tunku Abdul Rahman (1957–1969), Abdul Razak (1969–1976), Hussein Onn (1976–1981), Mahathir Mohammad (1981–2003), Abdullah Badawi (2003–2009) and Najib Razak (2009 to present).
7 His ascend to power was just after Margaret Thatcher was elected Prime Minister of Britain in 1979 and Ronald Reagan was elected President of the United States in 1980, both of whom are known to be the champions of neoliberalism doctrine.
8 This term is used to refer to the highly free and developed economies of Hong Kong, Singapore, South Korea, and Taiwan.
9 Before 1969, the ruling party adopted a liberal agenda with minimal state intervention which resulted in excessive accumulation of wealth by the Chinese ethnic group. Frustrated with unequal wealth distribution coupled with violation of Islamic principles in social and political policies, sparked the May 13 ethnic riot in 1969 (Hooker and Othman, 2003). Following the riot, Abdul Razak introduced the New Economic Policy (NEP), a 20-year social re-engineering and affirmative action plan to eliminate the identification with economic function as well as to increase enterprise ownership by the bumiputra (indigenous group).
10 Gini coefficient: a measurement used to evaluate income inequality where 0 indicates perfect equality and 1.0 indicates perfect inequality (Worldpress.org).
11 He was the former Finance Minister, deputy PM and UMNO deputy president who was punished and removed from government office in 1998 and imprisoned by Mahathir for sexual impropriety allegations and other corruption charges. He is currently serving a 5-year-term after being implicated again for sodomy charge under PM Najib's administration.
12 Mahathir and Daim instructed the Finance Minister, Anwar Ibrahim to suspend KLSE rules to allow the leading crony UEM-Renong conglomerate a bailout. That move caused the stock market capitalization to fall by RM 70 billion, or 20%, in 3 days in November 1997 (Jomo, 2003). These policy divergences between Mahathir and Anwar had caused the latter a heavy price. In 1998, Anwar was imprisoned for 5 years on sodomy allegation.
13 Hicom owned 51%, Nippon 30% and Terengganu state government 19%.
14 He is a Singapore-born Chinese entrepreneur who became a successful and prominent businessman in Malaysia. He came to Malaysia at the age of 23 and managed United Motor Works (UMW) set up by his father. The company became the country's largest engineering group. He established strong friendship with Mahathir who supported his business through major government contracts. In 1987, he helped rescue a haulage and logistic company set up by Mahathir. He was nicknamed Mr. Fixit as he is often called upon to help the political elites when their businesses are in trouble (The Staronline, June 25, 2008).
15 UMNO is a major shareholder of the bank.
16 In an interview after being released from conviction, he revealed that he had received a letter from a senior official asking him to resign due to ill health.
17 Payments for projects, constructions of plants, purchasing of raw materials and services that include technological consultancy (The Malay Mail, 3 August 2004).
18 He was a former engineer with Malaysian Telecommunication Department who retired in 1971 and started a family control company, Sapura Holdings, which bought UMW from Eric Chia.
19 The Circular: is a strict financial guideline which requires companies in which the Government owns at least 51% equity, to keep the MOF informed on projects, tenders, and purchases at the initial stage of negotiations.
20 The tender committee needs to approve all contracts or purchase of RM 15 million or above.