Why GLCs cannot be totally insulated from politics
Raymond Lim, Malay Mail Online
In political theory, which I am now pursuing as part of my Philosophy, Politics and Economics (PPE) course in England, one aspect of great interest to me is government enterprises, or what is commonly known as government-linked companies (GLCs) in Malaysia.
There’s an ongoing controversy in Malaysia about whether lawmakers should be allowed to helm such entities, given that some of these companies are resource-rich and MPs may be tempted to take advantage of these companies for political purposes.
Before we go into the merits of MPs helming GLCs, let’s understand why the latter exist in the first place. Rightfully, governments should not be involved in businesses. Governments ought to play a regulatory role and foster a robust business environment and that’s about it.
But most GLCs come into being because there are certain businesses that should not be left entirely to balance sheets considerations. Yet, these are often businesses best left to to private enterprises than to be run by a behemoth bureaucracy.
Take the provision of utilities like electricity and water. If left to their own devices, these companies would have raised the tariffs that reflect actual market rates and operational costs. If that were done, the poor in this country would be severely affected.
This is where politics tamper with business considerations whether by way of appointing politicians into GLCs, informal “advice” by the government or the government holding “golden shares” such as in Tenaga Nasional, Malaysia Airports or Telekom Malaysia.
I’d venture that political presence in GLCs, so long as they do not adversely affect the interests of the people and the corporations themselves, is not just acceptable, but necessary.
Due to the nature of their work, politicians have their ears closer to the ground than conventional corporate captains do. They receive text messages in the middle of the night about water cuts or sloppy service from government-linked airlines.
They are in a far better position to ensure that government-linked companies carry out their operations in a way that ultimately benefit the main stakeholders: the people, who elect the government that these companies are linked to.
But this come with one important caveat: politicians in GLCs need to walk a fine line between corporate and community considerations and yet resist the temptation to enrich themselves or their cronies.
Let me close by using the analogy of local elections and GLCs. A large segment of the Malaysian public wants the Third Vote restored as this would allow the element of accountability. Local authorities affect the public in the most direct way, such as in garbage collection and business premises licensing.
Right now, there’s little the public can do with sloppy services offered by local authorities because the councillors are all appointed. But if councillors are elected, then local governments would need to buck up if councillors want to be re-elected. Put another way, injecting direct political participation into local authorities creates accountability.
Similarly, if GLCs are headed by politicians who are at the mercy of the electorate, whether personally or by way of being linked to the ruling government, then there’d be an added element of accountability and a better feedback mechanism between the people and these entities.
