Patronage is not king - yet

M Santhananaban

Modified 16 Jan 2019, 5:09 am

LETTER | I refer to the erudite piece by the eminent academic Terence Gomez (above) which raises the question as to whether the former prime minister’s mantra “Cash is king” has given way to a new “Patronage is king” ethos.

In most democracies, including the US, the patronage or the spoils system prevails with hundred of appointments being handed to persons with political affiliations, donors to political causes, friends, family and associates of the top political leadership.

Political appointees (as they are called) are placed in various high-level positions including the headship of federal and state agencies, ambassadorships and directorships of corporations and regional and sometimes global institutions.

These appointments will draw people from various professional backgrounds including law, accountancy, banking, business, education, politics, sports and other public service fields and are usually for a fixed term and are often dependent on the tenure of the head of government making these appointments.

Competence or transparency often seems to be a consideration but is largely a secondary concern in these appointments although some level of expertise, loyalty and strength of character is essential. On the surface, they seldom meet the criteria of being purely merit-based.

In Malaysia, the current government has inherited a system where some of these appointments are not only prestigious but also carry relatively lucrative incomes and perquisites. To its credit, in this new government, the prime minister has delegated the powerful finance portfolio (held by the previous prime minister) to another cabinet minister and there is an ongoing review of the high allowances at some of the GLCs.

Newly-appointed persons in some of these companies are also there on relatively more modest terms. The question that we should be asking, which Gomez has persistently asked, is whether our government should be in business to the extent it is owning almost 45 percent of the equity of listed companies as an appendage of a politicised administration?

We should also be concerned about the near monopolies that some of these GLCs enjoy. Although since 2011 the number of politicians on the boards of these companies has declined, Gomez is now concerned about appointments under the current government.

George A Akerloff and Robert J Schiller in their Animal Spirits (2009) caution that the appropriate role for government is to set “the stage to give full rein to the creativity of capitalism. But it should also countervail the excesses of our animal spirits.”

The situation that the current government inherited was a difficult one with a bloated bureaucracy and several newly created agencies with overlapping roles.

Time, technocratic talent and time-honoured patience are needed to gradually come out of it even with the will to do so. Perhaps more time is needed for the reforms to take effect.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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