THE Malaysian government’s announcement of a rationalisation programme for statutory bodies and government-linked companies (GLCs) marks a significant move to address longstanding inefficiencies within the public sector. While this initiative is timely, it is not entirely new; discussions about reforming these institutions have been ongoing since the 11th Malaysia Plan (2016-2020). The question remains: Is this yet another promising blueprint hindered by poor execution, or a cautiously managed approach to a monumental challenge?
Understanding the big why for rationalisation
From 2004 to 2015, twenty selected GLCs and government-linked investment companies (GLICs) graduated from a decade-long GLC Transformation Programme, resulting in high-performing entities that contributed to the nation’s socio-economic growth. Fast forward to today: how many of these GLCs have maintained or enhanced their performance? Furthermore, have the hundreds of other federal and state-level GLCs achieved similar success?
A recent incident underscores the urgency of this rationalisation effort: the Prime Minister personally intervened to cancel a ministry’s application to send 68 delegates to an exhibition in Paris. Such examples highlight the programme’s primary objective: eliminating duplicative functions across various organisations. This serves as a wake-up call, emphasising the need to address overlapping roles within the government before they lead to larger setbacks.
Key areas for consideration
As the government embarks on this rationalisation exercise, several critical areas must be addressed to ensure a meaningful impact:
1. Learning from past experiences
Drawing lessons from previous rationalisation exercises, both domestically and internationally, is essential. War stories from those who have navigated similar transformations can provide invaluable guidance, helping to prevent past mistakes.
2. Diverse and competent teams
The success of rationalisation efforts hinges on assembling a diverse team with strong credentials and expertise. A multidisciplinary approach enriches decision-making by incorporating varied perspectives and innovative solutions to complex challenges. Agencies like TalentCorp can play a pivotal role in assembling a team of dynamic nation builders.
3.Leveraging big data analytics
Incorporating big data analytics into manpower planning is crucial in today’s data-driven landscape. Advanced analytics tools enable government bodies to conduct rigorous evaluations, facilitating more strategic decision-making. Scenario modelling allows for simulations of various organisational structures, enabling quicker and more accurate assessments of potential outcomes.
4. Sustainable Transformation
Sustainability is paramount in the transformation process. Frameworks and policies must deliver short-term improvements while fostering resilience and adaptability in an evolving economy. Legacy acts and laws should not hinder structural changes, as they are often cited as obstacles by certain parties.
Addressing the human impact of rationalisation
Addressing the human element is critical in the rationalisation process. Streamlining operations may lead to redundancies, potentially displacing employees. The government must handle this transition with care. A poignant example is the massive restructuring exercise of Malaysia Airlines in 2015, which involved cutting approximately 6,000 jobs. Although the goal was to stabilise the company and reduce costs, the long-term impact of these cuts remains debated. While affected employees received severance packages and found new jobs, many faced challenges in the job market and struggled with mental health and financial stability. This underscores the necessity of minimising workforce reductions when possible and providing robust support, including upskilling, reskilling, and adequate severance packages.
Streamlining should also target significant operational cost savings. In an era of fiscal responsibility, eliminating redundancies and optimising resource allocation is essential. Moreover, improving customer experience must be a priority, aiming to deliver faster, more efficient services to the rakyat, investors, and micro, small, and medium enterprises (MSMEs).
As an example, agencies like the Human Resource Development Corporation (HRDC) should play a central role in managing the quality and standards of training providers rather than leaving it to other agencies that are also currently providing training services. Such efforts could directly increase MSME contributions to GDP from the current 39% to the targeted 41% outlined in the 12th Malaysia Plan.
Conclusion
The rationalisation of statutory bodies and GLCs in Malaysia presents a valuable opportunity to enhance efficiency, accountability, and service delivery within the public sector. For meaningful outcomes, the government must focus on three key elements: the right size of organisations for effective operations, the right shape to avoid top-heavy structures that hinder execution, and the right skills to ensure a competent talent pool capable of driving national progress.
In the recent Malaysia Madani Budget 2025 speech, the Prime Minister announced the rationalisation of eight organisations, signalling an encouraging start. With continued momentum, the government can seize this opportunity to implement reforms that will ultimately benefit all stakeholders. – October 31, 2024
Farouk Abdul Khalid is a Cambridge University alumnus passionate about sustainable development and driving Malaysia’s progress towards a high-income nation