Decentralisation or Recentralisation? Trends in Local Government in Malaysia

Local government in Malaysia occupies the third and lowest level after federal and state governments. Under the Malaysian federal constitution (paragraphs 4 and 5 of the Ninth Schedule), local government is the responsibility of the states, but the federal government also exercises considerable power and influence over local government, especially in peninsular Malaysia. The dynamic of the Malaysian federal system is such that it has shifted the balance of power to the centre.Local government accounts for only 1% of GDP. There are 144 local authorities divided into cities (major administrative and commercial centres), municipalities (other urban areas), and districts (chiefly rural areas). Executive powers rest with the Mayor (cities) or President, supported and/or overseen by a system of committees. Currently, local councils in Malaysia are not elected: councillors are appointed by the state government for 3-year terms (with the option of re-appointment) and in most cases come from the ruling coalition.


Introduction
Local government in Malaysia occupies the third and lowest level after federal and state governments. Under the Malaysian federal constitution (paragraphs 4 and 5 of the Ninth Schedule), local government is the responsibility of the states, but the federal government also exercises considerable power and influence over local government, especially in peninsular Malaysia. 1 The dynamic of the Malaysian federal system is such that it has shifted the balance of power to the centre.
Local government accounts for only 1% of GDP. There are 144 local authorities divided into cities (major administrative and commercial centres), municipalities (other urban areas), and districts (chiefly rural areas). Executive powers rest with the Mayor (cities) or President, supported and/or overseen by a system of committees. Currently, local councils in Malaysia are not elected: councillors are appointed by the state government for 3-year terms (with the option of re-appointment) and in most cases come from the ruling coalition. 2

Dynamics of Inter-government Relations
The Malaysian federal constitution, which came into force when the nation obtained its independence in 1957, outlines the framework of the relationship between the three levels of government. It was conceived to strike a balance between the need for a strong central government at the federal level, the rights and powers of the states, and the expectations and needs of the local level (Sheridan and Groves, 1987). However, the division of powers between levels of governments reveals a central bias. While each state is recognized as an independent tier of government exercising legislative and executive powers within constitutional limits, federal laws take precedence over those of the states if for any reason there happens to be conflict or inconsistency. It has been observed that "in practice the states have little real autonomy. Although some federal functions have been decentralized, most decision-making remains at national level" (Morrison, 1994).
The  Malaysia, 1996 Historically, state-local relations in Malaysia were problematic, with intermittent federal interventions whenever the occasion demanded, especially in financial and political matters (Norris, 1980;Phang, 1997;Garzia-Jansen, 2002). State governments were seldom in a position to offer financial assistance to their local authorities, which therefore came to rely extensively on federal funding. This further enabled central government to reinforce its control. 1960 to ensure uniformity of local government laws and policies in peninsular Malaysia. Section 95A of the federal constitution provides that after consultation with state governments the NCLG can "formulate policies for the promotion, development, control of local government throughout the federation and for the administration of any laws relating thereto."

Current Position of Local Government
State and local governments in Malaysia now operate within a framework of being politically, financially and economically subordinate to the federal government. Whilst previous moves for reform, such as the 1976 Royal Commission of Enquiry to Investigate into the Workings of Local Authorities in West Malaysia, have proposed redistributing responsibilities between tiers of government and greater community participation, local government remains tightly controlled from the centre with limited revenues and only a minor role.
As a result, the local government system has serious difficulties meeting the challenges of a changing global environment and of a community that has become more aware of local government's inability to deliver what it wants. As a consequence, local government's perception of what is being 'delivered' may often not match that of the community. There is a gap between 'demand' and 'supply' both in service delivery and in judgements of local government's performance. Increasingly communities are focusing on the need for more efficient and effective provision of services by local government, and for more public participation.
Rhetorical support for decentralization has not been translated into practice and local government continues to function from a position of weakness. Indeed, recent research suggests an emerging neo-centralism: there is a growing tendency for central government, under the pretext of providing better services to the public, to remove traditional functions of local government and privatise them (Phang and Beh, 2006;Kuppusamy, 2001). This approach means cutting back on local autonomy and strengthens an apparent trend towards re-centralization in the federal-local government relationship.
At the same time, local government autonomy and capacity has been further constrained by the delegation of burdensome services from central government.
Two current examples are highlighted here. The first involves the central government's objective of reducing urban poverty, in pursuit of which local government has been given a major role. Secondly, the need to address a rise in the nation's urban crime rate has also been linked to the role of local government, which has therefore had to engage in crime prevention activities. These additional responsibilities have severely taxed local government's financial and human resources. As a consequence, its performance is generally considered poor and its PHANG: Trends in Local Government in Malaysia CJLG May 2008 4 relationship with the public is fragile. Yet local government has never been mandated to carry out these services in the first place, and its pleas for more and better infrastructure, personnel and finance are oftentimes ignored.

Consequences for Participation and Service Delivery
Local government in Malaysia thus operates within a centralized political system that does little to encourage autonomy or public participation at the local level. While the federal government exhorts application of the principles of good governance such as transparency, accountability and participation, local government's subordinate position within the government hierarchy stymies or curtails its ability to engage freely with the community. Local government faces constant criticisms over delays, poor attitude, weak enforcement and displaying arrogance.
Such problems are not confined to local government. When the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) conducted a week's survey on how to improve the public service delivery system, it received nearly 700 emails of criticisms and suggestions from the public (The Sun, 2007). As far back as 2000, the Complaints Bureau of the Prime Minister's Department had received complaints regarding weaknesses in government administration including slow and ill-mannered public counter services (New Straits Times, August and September, 2000).
In response to such problems, the Ninth Malaysia Plan 2006-2010 highlighted the urgency of improving the local government delivery system: The Government commits to improve the quality of public services as it is a fundamental prerequisite toward achieving the National Mission. Towards this end, the Government will continue to reduce bureaucratic red tape, especially at the local authority and district levels (Malaysia, 2006). This is indicative that for a nation to deliver services efficiently and effectively, effective leadership at the local level is essential. The government appears anxious to bridge the perception gap between the demands coming from the community and what local authorities are currently delivering.

Addressing the Weakness
While much depends upon local government, it cannot be denied that central agencies too are responsible for effectiveness in service delivery. The civil service has to re-examine its work manuals and try to reduce burdensome procedures. "Public organizations are identified as rigid bureaucratic cultures which are shaped by their own internal interests, and are therefore not responsive to the needs or preferences of those who receive public services: ordinary citizens." (Minogue, 1998) Clearly, cutting back complex bureaucratic procedures is one of the proclaimed objectives of the New Public Management philosophy to which Malaysia is committed. This is evident in various government reports espousing the need for excellence in service delivery and performance (see unpublished reports of Ministry of Finance, 2006;Ministry of Housing and Local Government and Economic Planning Unit, 2006;Ninth Malaysia Plan, 2006).
A number of research projects have been carried out, some in collaboration with the relevant ministries, to address the issue of public dissatisfaction with local government service delivery and seek measures to improve its performance. For instance, a recent report of the Ministry of Finance discussed work culture and monitoring mechanisms, as well as questioning the calibre of local leadership that has been responsible for a decline in the quality of service delivery (Ministry of Finance, 2006). Prior to this, the National Institute of Public Administration had reported to federal cabinet on how local authorities can improve their functions and services by following a prescribed format (National Institute of Public Administration, 2004). This was followed closely by a report of the Ministry of Housing and Local Government and the Economic Planning Unit on necessary local government reforms (Ministry of Housing and Local Government, 2006).
Various studies have revealed that current adverse perceptions of local government are not solely the result of a weak service delivery system, but can also be attributed to the absence of a transparent method for public participation and consultation. The community wants to be involved in the decision making process of its local authority, and hesitates to accept decisions which appear autocratic and are viewed as 'top-down' directives (Ministry of Housing and Local Government and Economic Planning Unit, 2006;Phang, 2006;Kaur, 2005). In response, in 1998 the Ministry of Housing and Local Government supported a national program for implementation of Local Agenda 21 (LA 21), highlighting the need to expand community participation and involvement in the work of local government. However, the initial enthusiasm for this program was not sustained and not all local authorities embraced LA21 or actively promoted public participation (Ministry of Housing and Local Government, 2002). Nevertheless, LA21 did generate a number of promising initiatives and associated research (Kuppusamy, 2006;Kaur, 2005;Noor Hazilah, 2003), whilst various non-governmental organizations and voluntary groups have renewed calls for better community participation and transparency.

Conclusion
The current situation in Malaysia highlights the traditional top-down approach to local administration (Phang and Ahmad, 2001). However, global influences and growing community awareness are now challenging the practice of centralized administration, and local government leadership is being forced to reappraise its role and contribution in local affairs. The

PHANG:
Trends in Local Government in Malaysia CJLG May 2008 6 community seeks empowerment and to reinforce its right to be consulted in the decision making process of its local council. Nonetheless, it seems unlikely that federal and state governments will accede to calls for greater devolution of powers, or to change the current system of appointment of councillors. This lack of political decentralization strains the relationship between citizens and their local councils: implementing administrative decentralization without adequate political reforms will result in formal harmony but informal discord. In the absence of a legitimate transfer of powers and increased accountability to the community, the local leadership may instead become primarily accountable to itself and to local elites (Phang, 2006).
The system lacks the necessary link between decentralization and participation through democratic representation (Gaventa, 2004).
Under such circumstances, questions arise as to the viability of local government within the federal system and its capacity to sustain challenges from an increasingly aware community. Its weakness in sources of finance, service delivery and community participation have given local government a negative reputation. Without elected councillors, further attempts at local government restructuring to make local government more transparent, accountable and efficient may well fail.
It seems likely that decentralization will remain elusive with powers remaining consolidated at the centre.