Decentralisation offers solutions – and snags

De·cen·tral·i·sa·tion: the dispersion or distribution of functions and powers; specifically: the delegation of power from a central authority to regional and local authorities.

With the term “decentralisation” broadly defined, we can start looking at what the decentralising of public goods – i.e. education, policing and healthcare – can mean for Malaysia. This was an issue that was thoroughly explored during the “Federalism in Malaysia: Design and Practice” conference organised by the Penang Institute in September. Whether decentralising public goods will be for the better or worse, one thing is certain – true federalism ensures the appropriate distribution of power.

Quick fact: Malaysia is a federation of 13 states established on September 16, 1963 – a date every Malaysian should know by now thanks to the declaration of it as a public holiday by Prime Minister Datuk Seri Najib Tun Razak in 2010. Power for both East and West Malaysia rests in Putrajaya – the nucleus which dispenses a “one size fits all” type of governance. A highly centralised government has certain drawbacks; state governments have limited choices in what it can do for its citizens due to financial and constitutional constraints. In the case of Penang, between 2001 and 2008, the state received only three per cent of the tax revenue collected from the state by the federal government (to the tune of RM25.7bil).

The enormous fiscal centralisation that has occurred in Malaysia can be seen in the fact that in 2013, the budgets of all 13 states in Malaysia combined were equivalent to only six per cent of the federal budget.

For a good example of the limits state governments have on issues that are well within their territory, one just has to take a look at Penang’s traffic system: transportation falls under federal purview, and calls to extend and build another runway for Penang International Airport, which has reached maximum capacity, have been falling on deaf ears. The same goes for daily commuting – the state is powerless in deciding what routes local buses should take. And while we may not want to go to the extent of decentralising transportation to the point of Australia’s railway system – which has different gauges throughout its different provinces – a degree of autonomy in local issues should do more good than harm.

Education

Education is a federal matter, as provided for in the Ninth Schedule of the Federal Constitution. Hence, for almost all levels of education, the federal government, through Parliament, the Cabinet and the Ministry of Education, is the main provider, although there is increasing participation for profit by private providers, be these individuals, corporations, universities or colleges from overseas – especially at the tertiary level.

The education sector does receive the biggest allocation, with RM54.6bil or 21% of total allocation in Budget 2014 (the sum was increased to RM56bil in the recent Budget 2015), but surprisingly, despite this behemoth education budget – which is higher than in most developing countries – we are still lagging behind high-performing education systems like Singapore and South Korea. Until we buck up, Malaysia’s competitiveness will surely slide, as will the students’ ability to compete in the labour market.

While a centralised education system may be necessary for the creation of a common Malaysian identity and shared vision through the use of a common medium of instruction and the teaching of a homogenous and standardised curriculum, over-centralisation has led to significant gaps between planning at the national macro-level and delivery.

“There will be a conflict between national and state-local needs,” reveals Dr Toh Kin Woon, senior research fellow at the Penang Institute. “At the national level, it may be agreed that perhaps our future generations ought to be inculcated with certain common values such as patriotism so that we can grow to love and defend the nation; this would require the contents to be in the hands of policymakers at the central level.”

But at what cost? “There’s a need for harmonisation and standardisation across the entire nation, but overdoing that would mean you stifle local interests,” Toh discloses. “For example, in Sabah and Sarawak, the indigenous population might have their own linguistic and cultural needs, which are closely linked to the environment. Unless you understand that, you probably would not have a syllabus or curriculum that would fulfil those needs. In that sense, decentralisation would help because if, for example, curriculum design is done at the local level, they would probably understand these needs better and would therefore end up having a more accommodating curriculum design.”

Thus, in theory, decentralisation helps to raise the standards of education by increasing the relevance and innovativeness of the curricula through matching curricula content to local interests, improving the quality of input, broadening the range of options available to students and parents, improving learning outcomes through better support from local education authorities and the community (e.g. expanding infrastructure), enhancing competition between different localities, and reducing inequalities in access to education of quality.

Policing

“Federations have police systems that range from the very fragmented and decentralised, like in the US where most police duties are delegated to the municipal forces, to state-centric law enforcement systems such as in India and Australia, to nationally centralised systems such as in Spain and Nigeria,” says Nicholas Chan, a socio-political research analyst at Penang Institute. “Notwithstanding global trends on community policing – where even countries with a very centralised police force, like France, have been undergoing a lot of decentralisation – Malaysia is one of the very few federations in the world that have no sub-national police forces, aside from Russia and South Africa – two countries that are not the best to be compared with due to their record of human rights abuse.”

The centralised system of the Royal Malaysian Police holds the IGP responsible for overseeing not just the headquarters in Bukit Aman, but also 14 contingents, 148 police districts and 837 police stations. It has its roots in the British colonial period in 19th century Malaya with the introduction of the Charter of Justice in Penang in 1807, which established a system for the administration of justice with clear laws to be enforced by the police. Through the Japanese Occupation and the Malayan Emergency, the police was formally involved not just in law enforcement but also in administrative affairs and population control, and the end result is what we have today.

And the outcome, more often than not, is police impartiality in favour of partisan and communal interests. Having monopoly over the state security apparatus often allows the situation to tip in favour of the federal government during inter-governmental or inter-coalition conflicts – the prime example being the intrusion into the Penang state assembly by Umno Youth leaders earlier this year, despite police presence in the area.

With a more decentralised, statebased police force such as in Australia (albeit maintaining law-making powers for criminal law under the federal parliament), Malaysia may see fairer policing when the subject is brought closer to the hearts of electorates through measures of accountability and perception of police effectiveness directly impacting the electoral performance of office-seekers. On top of that, with localised recruitment practices, the police force stands to benefit from an increased sentiment of familiarity through individuals motivated to serve their communities, and from the potentially wider range of ethnic participation (smaller, municipal-based police forces have seen an impressive increase in minority participation, as in the Toronto police[2].).

It is undoubtedly not a one-stop solution, but decentralisation has the potential to enable contextualised solutions to meet the needs of the policed community, which are often demarcated by spatial, geographical, socio-cultural and contextual differences.

Health

Malaysia’s public healthcare is universal, fairly comprehensive, highly subsidised and centrally administered. Policy and planning lies within the Ministry of Health (MoH), and is conducted mostly top-down with some bottom-up inputs and monitoring or evaluation. The MoH implements its plans through its state and district offices, hospitals and health centres. Health facilities get fixed annual budgets, with standard line-item budgets and specified performance indicators and targets. Local managers have little discretion in policy and budgetary matters, or even the hiring and firing of staff.

Dr Chan Chee Khoon, academic consultant at University of Malaya, presented his paper on decentralising healthcare, drawing attention to the conflicts that arise when that happens:

The state is currently juggling its role as funder and provider of public sector healthcare, regulator and investor in for-profit healthcare, which opens up room for serious conflicts of interest. Public sector healthcare is underfunded and faces a chronic shortage and continuing loss of senior experienced staff, affecting quality of care and ability to curb private sector fees. Health ministers have urged those who can afford it to use private healthcare so that the government can conserve its modest resources for the “truly deserving poor.” This seductive logic fosters a two-tiered healthcare system: priority care for the rich and underfunded public sector for the rest.

An alternative scenario of more progressive taxation to improve universal access to quality care on the basis of need seems to be off the radar screen, hobbled in part by public scepticism over unaccountable stewardship of public finances. In the meanwhile, regulatory conflicts of interest have not been addressed. There is also little evidence that the state’s ownership of for-profit healthcare enterprises translates into cross subsidies, or a price restraining role such as envisaged for the National Heart Institute (IJN) beyond cosmetic corporate social responsibility initiatives.

“There’s another dimension of decentralisation – devolution through privatisation,” adds Chan. “In some ways it’s a bit of a misnomer, because when you outsource, let’s say hospital support services to three concessionaires, it’s like (moving from) a monopoly to an oligopoly, or decentralisation. It’s worth pondering whether our scope of decentralisation should extend to the privatisation of the healthcare sector.”

According to Chan, the decentralisation of Malaysia’s healthcare system through privatisation is already happening – not to the extent of existing clinical services in the public sector being privatised, but by default not increasing expenditure in the public sector. “We are miserly when it comes to public sector expenditure. It comprises only about 2.3% of GDP out of about 4.4% – just slightly more than the private sector.” Chan has his apprehensions though. “I’m not totally sold on decentralisation. I think we need to adopt a more nuanced attitude towards it.”

Conclusion

Decentralising power comes with its own set of problems, but if properly done, it could result in a more-adjusted education system, fairer policing and a peachier healthcare system should funds be appropriated wisely. However, given the current government’s clutch on monopolising power, the devolution of public goods can only be wishful thinking.

Source: Penang Monthly. Date: January, 2016

http://penangmonthly.com/decentralisation-offers-solutions-and-snags/