LAST week the World Bank launched its latest bi-annual Malaysia Economic Monitor or NEM. It is two-pronged in objectives.
One is to report on Malaysia’s economic prospects amid global trade spats, economic slowdown and geopolitical tensions. The other is to outline measures to revitalise the public service.
There are many good points in the NEM. The World Bank reiterated, as this newspaper has highlighted many times over, the significant role the public service plays in promoting the competitiveness of the private sector and, consequently, economic growth and shared prosperity.
The NEM especially singles out the central role of the public service in strategising the economy to achieve high-income and developed-nation status which the bank estimates Malaysia will achieve by 2024.
While acknowledging that the Malaysian public service has performed well vis-a-vis other developing nations, the NEM records that it fell short when compared with the Organisation of Economic Cooperation and Development or OECD, a rich-country club.
The latter comparison has irked the Malaysian Trades Union Congress which contends that the comparison is unfair. But the World Bank has a point. We need to benchmark ourselves with the best. Only that way can we unleash the true potential of the public service.
The World Bank delves on attracting the best talent to the public service. We contend that the public service is largely staffed with the best talent possible for its pay structures. However, administrative strictures and culture, and the demands of fiduciary accountability make it perform sub-optimally. Highlighting these administrative constraints and their resolution would have offered a better perspective to talent management in the public service.
The NEM also stresses that meritocratic recruitment that fairly reflects population diversity is a prerequisite for accelerated economic growth. To loosen the centralised nature of human-resource management, the World Bank suggests competency-based recruitment with individualised compensation.
Additionally, the World Bank advocates career promotion through open advertisement and selection as in the OECD countries of the United Kingdom and New Zealand. Relatedly, the World Bank could have revisited the proposal that the government had toyed with a decade ago. That was to place ministry secretaries-general on fixed-term contracts, with compensation tied to a set of rigorous performance targets. The proposal was a non-starter given union disapproval of the gross inequity in pay structures that it would have occasioned.
Security of tenure in the public service is just dessert for the public servant who toils, for the better part of his life, for salaries that fall far short, especially at senior levels, from the levels enjoyed by his private-sector counterpart. Despite an exit policy, life-time employment has resulted in the service carrying unproductive workers.
Suggestions on how advanced countries such as Australia and New Zealand have moved from life-time employment to contractual employment would have been helpful. In such a scenario a civil servant can be fired easily for a legitimate reason.
In line with public perception, the World Bank observes that the public service is expanding. The logical conclusion to this enlargement is an ever-burgeoning pension bill. Pensions gobble up a sizable chunk of public expenditure.
The Edge, a weekly newspaper, calculated in 2017 that the pension bill grew at a compound annual growth rate of roughly 12 per cent over the past decade. If unchecked, pension payments will spike to RM64 billion by 2027. This amount is equivalent to about two-thirds the current wage and retirement payments. Although the Retirement Fund Inc., or KWAP, that now manages pension payments has eased the pressure on public finances, a contributory-pension scheme for new entrants can also rein in the beast.
In highlighting targeted subsidies as a means to reduce public expenditure, the World Bank could have championed user-charging. User-charging requires public services to be priced close to the full cost of service provision. One stark example is outpatient care that can now be obtained for a paltry sum of RM1; a negligible price against some RM1,300 that the government incurs per patient in providing emergency and trauma services. However, user-charging should not compromise the principle of inclusiveness. The rates could be half the full-cost and should exempt the poor.
In an era of Internet of things and artificial intelligence, the NEM rightly underscores the importance of welcoming new technologies in service provision. Admittedly, to paraphrase Robert Frost’s simple poem on Stopping by Woods on a Snowy Evening, the public service has miles to go before it sleeps in digitalisation and automation.
The World Bank records the commendable strides the public service has made in electronic government. Nevertheless, highlighting the significant achievements it has made in its migration towards a digital government would have done the public service proud.
The writer, a former civil servant, is a professor at the Putra Business School