Malaysia has dropped in its ranking in a leading international transparency watchdog’s anti-corruption study, being deemed as having a very high risk of corruption in its defence spending and operations.

NONE According to Transparency International - Malaysia (TI-M), Malaysia dropped from its previous position within the D- band or “high” risk, to E, labelled as “very high” risk, in the study undertaken by the NGO’s UK counterpart, placing Malaysia in the same group as countries such as China, Afghanistan, Rwanda and even Singapore.

Calling on the  government to practice heightened transparency, TI-M, in a statement, suggested that the Performance Management and Delivery Unit (Pemandu) introduce integrity pacts for the procurement of defence-related materials, among others.

“TI-M urges the parliamentarians from both the ruling party and the opposition to push for greater transparency and set aside the Official Secrets Act (OSA) 1972 and introduce the Freedom of Information Act,” it added.

It said that cross-party committees and external expert groups should be formed in order to strengthen parliamentary scrutiny of defence procurement.

To date, there is no oversight over defence purchases, not even in the bipartisan Public Accounts Committee which oversees all other government spending not classified as official secrets.

It also urged the prime minister to table annual defence budgets for parliamentary debate, as was done in Japan, where defence purchases are audited annually by an independent party and submitted to Parliament.

Defence budget much greater than subsidy cut savings

According to TI-M, the cloak and dagger nature of defence procurement in Malaysia could not only lead to corruption, but also purchase of outdated equipment which could cost lives.

azlan It said that under the 10th Malaysian Plan, RM23 billion has been allocated for defence and security, and this “enormous” amount should be spent through open tender instead of direct negotiations.

“In contrast, the savings from the latest withdrawal of subsidies due to RON95 petrol and diesel by 20 sen a litre, the government will save RM1.1 billion for the rest of the year and RM3.3 billion next year full year.

“There is always a high risk of corruption in the defence sector because the amount of money involved in contracts is enormous, which can allow corrupt individuals to hide money in these contracts,” it said.

It added that arguments that defence buys should be kept under wraps for security reasons do not hold water as countries which are superior militarily are ranked among the lowest in corruption risks.

These include Australia and Germany which topped the TI-UK’s Government Defence Anti-Corruption Index  as “very low” corruption risk countries, while South Korea, Austria, Sweden, Taiwan, United Kingdom and United States ranked as “low” corruption risk countries.

Most countries vulnerable to defence corruption

According to TI-UK, 70 percent of the 52 countries assessed have high to critical risk of corruption in government defence procurement, exposing themselves to the “danger and waste” that corruption brings.

NONE The Index measures risk of corruption on five fronts - political risk, financial risk, personnel risk, operations risk and procurement risk.

The study found that more than half of the countries had no independent oversight of defence purchases, while 65 percent lack legal requirements to ensure justification of secrecy.

Many also lacked oversight of businesses owned by military institutions, which give rise to conflict of interest.

Thirty five percent of countries were also found to have no restrictions of the use of agents in procurement.

“Just seven countries strongly control and limit the use of agents, or forbid them altogether,” it found.

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