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How political financing is done in other countries

KINIGUIDE One of the thornier aspects of running a democracy is political financing - how money is raised and spent for political purposes.

Thanks in part to the fallout of the 1MDB scandal, there is now a renewed push to introduce new laws that would formalise and regulate how this is done.

Prime Minister Najib Abdul Razak - who himself was implicated in the 1MDB scandal but was subsequently cleared of wrongdoing by attorney-general Mohd Apandi Ali - established the National Consultative Council on Political Financing (JKNMPP) in August last year.

The committee published a report making 32 recommendations in Sept 30 this year, including a new law dubbed the Political Donations and Expenditure Act (PDEA).

Its chairperson Paul Low is now in the process of consulting various political parties on the new law, and the process is slated for completion by the end of the year.

What’s at stake in this new push? And how are other countries dealing this issue? If you have ever wondered about these questions, this instalment of KiniGuide is for you.

To provide some basis for comparison, we will also be citing country rankings on the 2015 democracy index, which is the latest available version of the index compiled by the Economist Intelligence Unit based in London.

There are 60 questions in the democracy index questionnaire used to measure the health of a country’s democracy, including one on whether political financing in the country is transparent and well-accepted.

Why should we care about how political financing is done?

As with most things in life, running a political machinery costs money. Whether it is just to keep the lights on at a service centre or to run a nationwide election campaign, money is needed.

In democracies, most of a party’s funding usually come in the form of donations from individuals and sometimes corporations. This is widely regarded as a part of one’s freedom of expression - that is, to express one’s political belief or affiliation by contributing financially.

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