What Ails Our Society - Tan Sri Harun Hashim

During the colonial era, society was divided roughly into three maingroups:

Rural folk who comprised padi planters, fishermen, and plantation and mine workers;The public sector who comprised government officials - that is, officersand subordinate staff (clerks, technicians and the manual group); and The private sector who comprised Chinese and Indian shopkeepers and businessmen, European expatriates mainly in trading houses and banks, and local professionals like doctors and lawyers.

The economy was agricultural and mining. Life was simple - placid, even - and pleasant. Everybody went about his or her daily tasks. There was little interference between the groups. Government regulations were kept to a minimum. Government officials, especially the officer corps, were regarded as the cream of society. They were the best-educated and held political power. Inevitably they had to work closely with British expatriate officers.

This elite group with close connections to the Malay Rulers was practically westernised; they adopted English lifestyles in dress, club membership, dining and dancing. Socially, they also mixed well with the expatriate private sector.

After independence, a new group emerged - namely, the politicians. With political power in the hands of the politicians, the government officer class were practically marginalised, social-wise, except for the very few at the top and the highest ministry level. Then came industrialisation, which created the corporate sector. The social circle had moved to the corporate world, which dominated upper-class society and had become international and cosmopolitan. It was a circle made up of the captains of industry, politicians, diplomats, royalty and a sprinkling of senior civil servants.

Political patronage and the nouveau riche Conspicuously affluent lifestyles - mansions instead of bungalows, luxury cars, yachts, even private jets that bring corporate leaders all over the world to the extent that their wives shop only in London, Paris, New York and Tokyo, with frequent family holidays abroad - has rubbed off on politicians, royalty and senior civil servants, who really could not afford such luxuries but still greatly aspired to them.

This scenario is the negative side of Malaysia Incorporated. The corporate figures attending to (or accompanying) the prime minister on foreign trade and investment promotions overseas invariably pick up the tab - but charged to their expense account, of course - [thereby placing] politicians and civil servants [under an obligation to them].

As far as the corporate world is concerned, this is business and that is how the game is played. If you do not do it, the other fellow will. Relatives of politicians in power overnight became directors and chairman of companies. This is really influence peddling and one need only look at Indonesia to see the consequences of such a practice.

Power given to ministers to allocate shares to individuals in the name of uplifting the bumiputera community is abused. Once allocated, banks lend money to pay for the shares that are subsequently sold when the price increases, to repay the bank loan with a handsome profit for personal disposal.

The so-called bumiputera shares are sold in the open market and snapped up by non-bumiputeras, [defeating] the intention of bumiputera ownership. That is why the target of 30 per cent equity ownership by bumiputeras has yet to be achieved. The practice has created a new group of nouveau riche who have become millionaires without having to provide any capital to begin with, [relying on] family connections or political influence.

A carefully-structured, fair and open government tender system in awarding contracts practised since colonial times has been abandoned in favour of privately negotiated contracts. Whilst the practice can be forgiven initially [as its intention was] to create bumiputera entrepreneurs, it has persisted for too long and deprived other aspiring entrepreneurs of the opportunity to make it on their own. The idea was to [help the Bumiputera] acquire expertise, hopefully [enabling him] to make his first million; thereafter he should be able to prosper on his own.

In the course of events, the same group of bumiputeras were awarded more and more contracts and business opportunities through privatisation, preventing the creation of a much larger group of experienced bumiputera contractors and entrepreneurs. The same scenario appears in the appointment of chairman and directors of companies. A very select group of men has been appointed to a large number of companies. The New Economic Policy has actually created a new breed of management professionals of bumiputeras who have worked their way up from junior executive positions but have been denied the top prize at the expense of good corporate governance.

It can be said that by and large, corporate figures today owe their success and prominence to having close links with politicians in power under a system of political patronage. In the course of time, such a system eventually created a strong business and commercial lobby in the corridors of power, with politicians losing the power to make independent decisions for the good of the country. In plain language, the umbrella protects you from the sun and rain but once the umbrella is lost or broken, then you are at the mercy of the elements. As a matter of survival, therefore, the umbrella or patron must be kept intact or preserved at all costs.

For example, the American gun-manufacturing lobby is so strong that the US has been unable to make a law to control possession of firearms although [guns are killing] schoolchildren. The defence industry lobby is so strong that it has resulted in an irrational US foreign policy [that perpetuates or creates] wars all over the world.

Or just look at the Philippines, Indonesia and Pakistan: When the political patron falls, companies just go bankrupt and their directors prosecuted for corruption. Their political patrons are prosecuted for abuse of power and corruption, and their ill-gotten gains repossessed by the State. Drugs and decay Until the early 1980s, the lifestyle of the upper class was at best upper-middle class, with the exception of Sultans, who lived in the Istanas provided and maintained by the State. Even their allowance was modest, with only one ruler in receipt of a monthly allowance of RM25,000, the others much less. Millionaires [then] lived modestly, too.

As a nation, we are proud to have created a fast-growing, middle-class egalitarian that came from the rural population that had achieved social status, having benefited from tertiary education. Indeed the son of a padi planter or rubber tapper becomes middle class upon graduation from university, getting a job and owning a car on hire-purchase. [In the past], the gap between the rich and poor was not large. But since then, the gap has gone to extreme proportions, similar to the situation in the Philippines, Indonesia, India and Pakistan, which have existed for a very long time. Indeed, the poor have become poorer and in spite of the government's efforts to eradicate poverty, the actual number of persons below the poverty line keeps increasing although they have decreased in percentage terms. Such a society does not createstability.

During the Vietnam War, the Vietcong weakened the US Forces by introducing them to drugs, [targeting] enlisted personnel on short-term national service. This fact alone accounts for the widespread use of drugs in the US after the Vietnam War and has persisted ever since.

On the invitation of the US Ambassador to Malaysia, I met the chairman of the Presidential Commission who was on a visit to KL to assess the drug problem, in particular, the source of drugs from this region. I suggested to him that the problem could be easily solved by denying supply from its source. Opium is grown in the so-called "Golden Triangle" of Thailand, Myanmar and Laos. It is an annual crop. A quantity is required for medicinal and surgical purposes. All that needs to be done is to purchase the entire crop, slip out to the US the quantity required for medical purposes and dump the rest in the Pacific Ocean.

Such an exercise will cost the US government less than maintaining the Drugs Enforcement Agency (DEA). The chairman, an incumbent state governor, said that then the DEA would be out of a job. In the report, he had merely recommended a more efficient DEA! In 1968, when I was with the Anti Corruption Agency (ACA), I reported to the government that the Communist Party was targeting young Malays in upper secondary schools and colleges, supplying them with drugs in order to destroy Malay leadership.

At the same time, it provided them with funds for their war against the legally-established government. My recommendation was that the menace should be nipped in the bud before it went out of control. The government held the view that the instances reported were isolated cases and no real danger will ensue. [But] in spite of the death penalty [imposed on offenders], the drug problem has gone from bad to worse, costing taxpayers millions of ringgit to eradicate the problem and [causing] untold misery [to] thousands [of people]. It took the government 10 years to acknowledge in Parliament the sources and causes of the drug problem as stated inmy report!

In 1967, when I was appointed to establish the ACA, the prime minister, Tunku Abdul Rahman, gave me a free hand to prevent corruption from spreading in the country. I was allowed to choose and pick officers for the agency from the public service and the police, and [had] unlimited funds from the Treasury. There was no interference from the government in the workings of the agency. Even the Attorney-General was not allowed to interfere with prosecutions of corruption cases. I made all the legal decisions in my capacity as a deputy public prosecutor and the management of the agency as the Director-General. By the time I was appointed a High Court judge in March 1971, the problem had been brought under control. Corruption can only be prevented, even eradicated to a large extent, if there is political will.

As it is now under the new corruption law, the Director-General has no legal power. All corruption cases must be referred to the Attorney-General and prosecuted subject to his written consent. It is a notorious fact from history and even in recent times, that corruption is the cause of the downfall of governments, military coup d'etat of elected governments and even revolution by the people. Education, housing and healthcare concerns The influence of the West through the mass media, films, songs and lifestyles, coupled with the decline in the practice of religion in the cities, has greatly affected our youth.

Over the years, about half of the rural population have migrated to urban areas in search of employment, attracted by the city lights. Not all found jobs but remained in the cities, nevertheless. They become drug addicts and resort to crime to pay for drugs. They live in squatter areas because of inadequate housing. The city-born from well-to-do homes, too, [can succumb to] juvenile delinquency. Loneliness forces them to look for company outside the house. This is because most married couples in the cities are both employed and not at home for most of the day, even in the early evenings. The children are left to their own devices, which affect not only their studies but social behaviour as well.

The squatter problem has been with us for a long time now. Much has been done but there has been an over-reliance on private sector development and house ownership that many cannot afford. Squatter settlements are the source of crime and social discontent. We had an excellent public healthcare system easily accessible to the rich and poor alike. Not any more. The rich are supposed to go to private hospitals whose only objective is to make profit for the shareholders, even to the extent of compromising on adequate and proper medical treatment for the sake of high turnover of patients.

The poor go to government hospitals, but here again, due to privatisation of various support services like laundry and waste disposal, maintenance costs have gone up. At the same time proposals for corporatisation with a view to privatisation is a constant threat hanging over the heads of government hospitals. We can take pride that more than 99 per cent of children of school-going age are in school although we do not have a compulsory schooling system. The school system consists of six years of primary, three years of lower secondary, two years of upper secondary and about two years of pre-university. Degree courses range from three to five years. This education system, however, has not produced thinking Malaysians.

Challenges ahead as can be seen social ills arise out of a combination of several factors. The challenges for their future management are many butexciting. It is necessary to look at the political establishment itself for [solutions to] our social problems because without political will and an appropriate political system, not much can be done until the system collapses completely. A revolution [in its wake] is something we all want to avoid.

First, the politicians themselves:

They should all have a minimum education of not less than a first degree from a university. 

Politics should be a career starting from local authority level, then state administration and finally national level.

Politicians should be sufficiently well-paid [to ensure that they can work full-time at it and] make it their career.

They should, of course, have entered other occupations first before entering politics full-time so that they have acquired the experience of earning a living. In our context, the question arises whether our adoption of the Westminster model is truly appropriate.

There should be elections to local authorities as the present system [by appointment] is not working.

There should be a review of the system of election to the Dewan Rakyat and elections to the Senate. Education, healthcare and housing should be the responsibility of the government and not left entirely to the private sector.

The first nine years [of a schoolchild] should be [spent] locally, going to the same school until the age of 15 years so that he grows up in the home environment under parental care, absorbs the culture of his community and practices his religion. Upper secondary and pre-university should be combined at college level where students are streamed for the job market or further academic advancement at university level - with emphasis on quality.

Government hospitals should be retained and operated as in the past. As the majority of people hospitalised are working people, the funding can come from Socso under a compulsory employer-employee contribution system. Public housing for rental at subsidised rates should be built in urban areas to cater for migrants from rural areas and the poor urban; to resettle squatters and abolition of squatter settlements.

Local authorities and mayors need to be fully elected. They should be made responsible to administer schools, hospitals and housing, subject to Federal policy and laws.

The civil service should be permanent, professional and impartial.

There must be a clear division between political masters in the ministry making policy decisions and the civil service implementing thepolicies.

The management of corporations, companies and banks should be left entirely to professionals, right up to the top management. No more political appointees to be chairman or president.

All government contracts have to be awarded by open tender. Let every private commercial organisation prosper on its own.

Government involvement should be confined to providing infrastructure like industrial sites, roads, railways, ports, electricity, water and telecommunications.

In agriculture, there should be land reform projected towards food production on a commercial basis for self-sufficiency in food.

For example, padi lots can be amalgamated to become a commercial venture with the present land ownership converted to shares of the company. Those who work will be paid wages in addition to dividends of their shares. Mechanisation and modern planting methods are to be used to increase production. Farmers should enjoy a lifestyle comparable to urban dwellers, if not better, no longer the peasants of yesterday.

There is no objection to people becoming millionaires and even billionaires. The tax-structure should be such that it should not reach a level of diminishing returns. Therefore, the graduated system of taxation on income should level off at one million ringgit, after which a flat 10 per cent rate applies. In a fair distribution of wealth system, taxes levied should be spent on education, healthcare, housing and poverty eradication. In particular, every citizen should have free access to hospitalisation when needed without the poor having to appeal for donations for various types of surgery.

Drug addicts should not be prosecuted and sent to prison. They will only contaminate others, including prison wardens who are lured into corruption by supplying drugs to addicts. Drug addicts are sick and should be treated and [confined], preferably in isolated areas like former police jungle forts. Possession of ganja should not be made a capital offence if the person is not a drug addict. A 10-year maximum prison sentence will more than suffice. No mercy however, should be shown for hard-drug traffickers.

The eradication of corruption in the public and private sectors should be everybody's concern. The corrupt should be looked upon as enemies of the public. We do not want corruption to be a way of life. The ACA should be independent, reporting directly to the Parliament.

The 15th century of Christianity marked the revival of that religion. Islam today is in the 15th century of the Hijrah. A strong revival of Islam has swept across the world. This is a force that cannot be ignored. In this country, it has gathered its own momentum during the last 30 years. It has enveloped Malay professionals in spite of their western education overseas.

The government has been directly involved in building mosques all over the country, the Islamisation of banking and insurance and the spread of Islam to the world. It took the initiative of establishing an International Islamic University in Malaysia.

The propagation of Islam is no longer the preserve of the ulamas in the kampungs. Indeed, today's ulamas are better-educated, holding university degrees. They speak English, Arabic, Malay and other languages as well.

The government [may have] embarked on a policy of the revival of Islam, but in the process it has unleashed a force that has gathered momentum and there is no turning back. We all have to live and deal with this aspect of our society, both by Muslims and non-Muslims.

Just look at the number of city Malay women with covered heads, the Halal signs on food products in supermarkets, restaurants and five-star hotels, the Qiblat signs in hotel rooms. In a very short space of time, the mosques have been filled to capacity with Muslims of all ages during Friday prayers, compared with the congregation of old people and pensioners only as late as the early 1970s. When the Shah of Iran was asked whether he had an ulama as a Member of Parliament, he replied: "Yes, one, but that is one too many!" Whilst belief in God and observance of moral values should be the cornerstones of our society, extremism of any kind should be checked by enlightened education, knowledge and understanding.

Tan Sri Harun Hashim is a former ACA Director-General and Supreme Court judge.
(This speech was the keynote address at this year's CEO Dinner Forum organised by the Malaysian Institute of Management on Dec 6 in Kuala Lumpur. 21 December 99)