Interpreting the Study on Effectiveness & Transparency of Government Aid to Malaysian SMEs

The study on the Effectiveness & Transparency of Government Aid is a report by Transparency International Malaysia & Merdeka Center, a relevant mouthpiece for the government to table the aid schemes disbursement of various economic stimulus packages announced, with full transparency in the upcoming parliament sitting. 500 participants interviewed for the study represented the industry sectors (services, manufacturing, agriculture, construction) whose GDP contribute to our economy, were impacted by the pandemic first & then the hit-&-miss management of its many crises. These had been owners of about 25% small & 75% medium enterprises (SMEs). They were aware of government aids at the federal level as they were publicised through the media channels & the majority of them knew how to apply for such assistance. However, they were not aware of assistance offered at the state level too & therefore did not benefit from state assistance without first applying for it. In reality, only 89% of the participants were eligible to apply for the mixed bag of aids (grants, deferment of licence/ permit renewal, utilities/ rent) that were announced throughout 2020/21.

But there were key issues that were highlighted in the report, ranging from the challenges & effectiveness of aid disbursements, confidence in the federal government's aid approval processes, happenstance bribery, to the recipients' misuse of aids received.

One third of the participants experienced an OK aid application process. The other two thirds' efforts were stifled by somewhat similar challenges. If they had to recall the challenges faced, they cited:

i) unclear procedures

ii) rigid criteria

iii) limited quota for assistance

iv) red tape

v) non-transparent selection process

vi) bribery & corruption

After having been subject to the said challenges, 63% of them thought that the aid approval process was fair. Most of the participants seemed equivocal about the adequacy of transparency, integrity & accountability attributes that presented between the available aids purported to the public & the aid processes (application, approval).

Bribery & corruption during disbursements of aids was observed by the participants. The majority of them had not been intimidated into offering or promising bribes in order to get the aids they applied for. But of the handful who were attempting corruption had involved parties who were either the official institutions assisting on the government aids (officers of banks, government agencies, local authorities) or unofficial individuals (some were PEPs).

Much of the corruption took the forms of bribery with cash, intermediary commissions through `personal connections’ & projects or contracts being offered. As cash was found to be predominantly the bribery undertaking in this study, the amounts reported were anything between less than MYR1,000 & above MYR100,000. Well, corruption could materialize throughout the entire aid funding system, ie. during the aid application & the approval, as well as after receiving the aids. This was prima facie in that some participants were able to use the aids received in contradiction to their save-the-business rationale, ie. funding personal expenditure, breaching the conditions of the funding criteria & submitting false information to obtain approval.

1) The SMEs in this study may be projecting the need for increased integrity & transparency onto the government but the SMEs themselves were not so promising in the case of having abused the trust deposited with them along the proper use of aids.

2) The concept of corruption amongst some of these representative SMEs is still under-grasped, as nuanced by their understanding that bribery in significant values is corruption, but offering grease payments (duit kopi) to expedite their applications or returning favors for approved applications by promising benefits or giving tokens of what could be of value to a receiver of passive bribery, is not corruption.

3) The participants were ambivalent of the corruption crisis we see day-to-day in Malaysia – only 42% thought that there is less corruption now, 11% did not have an opinion. Bribery is still reveled as intrinsic in much of how inter-dependent relationships function beneficially that it has perpetuated cultural entitlement. According to a report by RasuahBusters, there is a moral deficit amongst a particular generation of people for relying on bribes as they succumb to a materialistic lifestyle. Somehow, people do not yet see that there is a willful enforcement of anti-corruption laws.

We are already mid-way through with executing the National Anti-Corruption Plan 2019-2023, but with the optics above, is this paper merely a symbolic statement? Therein lies the need to review the NACP milestones as well as the disjointed courses of actions, refine what has been working as affirmative actions & rethink processes to encourage enforcement solidarity amongst relevant regulators, ie. the assurance on protecting whistleblowers from retaliation needs to be institutionalised. The burden to battle corruption is on the government as much as it is on the people.

Can we at least hope that a Public Accounts Committee audit into the aid disbursement processes provide a cathartic release for Malaysian SMEs?

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