Corruption will render military into ‘non-fighting machine’ as new threats emerge
AS a middle power located in a reasonably peaceful region, Malaysia traditionally has not prioritised defence spending, compared with healthcare and education. Beginning in the 1990s, the Malaysian government began purchasing new defence assets to improve the military’s operational capacity. The recent financial controversy surrounding the RM9 billion littoral combat ship (LCS) project, however, is just one example in a series of the misappropriation of public funds under the pretext of meeting the nation’s defence needs.
Our territorial security is now at risk as the scandal has jeopardised the Malaysian Armed Forces’ (MAF) long-term plans. The navy’s western fleet said in October that it will be difficult to defend the country without the six LCS and the second batch of eight littoral mission ships (LMS). Malaysia now lags rivals Singapore and Indonesia in terms of naval assets – despite implementing a 15-to-5 fleet transformation programme (newer but fewer ships to reduce logistical issues) in 2015.
Price of graft
Transparency International (TI) recently released its 2022 government defence anti-corruption index. Out of 82 countries, Malaysia was placed in band D, the high-risk category for corruption in the defence and security sector.
Some of the negative impacts of corruption on a government system are first, dishonest officials may not award contracts to the most effective supplier, which reduces overall bureaucratic effectiveness. Dishonest suppliers may block the admission of new ones, creating monopolies. Second, public funds might not be used in the most effective way, as corrupt officials will award projects based not on merit, but bribes received. It also dampens entrepreneurial spirit, as corruption impacts on investments and how human resources are allocated. Last, corruption raises the overall cost of government spending by acting as an unnecessary “tax” on transaction costs.
MAF has long been seen as guardian of the country’s security and territorial integrity. First with its sterling service post-independence during the communist insurgency, followed by the Indonesia-Malaysia Konfrontasi and thereafter, proudly flying the flag in United Nations peacekeeping operations in Bosnia Herzegovina and Somalia, among others.
Unfortunately, MAF has become a shadow of its former self, facing challenges meeting the changing regional security landscape on all four fronts – strategic, geopolitical, security and economic. This is primarily because of failure to replace assets acquired 25 years ago.
Such is the case with the navy. It once fielded 16 combatant ships with missile capabilities but because of obsolescence of armaments and the aging of equipment, the navy’s annual requirement of 5,000 ship days at sea is increasingly difficult to maintain. For example, the last major combat ship – Korvet Kelas Laksamana – was purchased in 1997. The high operational and maintenance costs of these outdated ships directly impact on the navy’s ability to maintain its presence and Malaysia’s sovereign rights, which span 569,845 km² of economic exclusive zone areas and 65,035 km² of territorial waters.
On 2 December 2019, Malaysia declared itself as a “maritime nation with continental roots” in its first defence white paper, acting as the fulcrum connecting the Indian and Pacific Oceans, a key section of the Indo-Pacific geopolitical framework. Because of its past fighting the communist insurgency, Malaysia became entrenched in an army-centric mindset despite the country being surrounded by three large bodies of water: to the north and west by the South China Sea, east (Pacific Ocean) and south (Celebes Sea).
The navy and air force each has about 15,000 personnel, while the army 80,000. The latter also receives double the budgetary allocation to the detriment of the other services. When coupled with past government failures in meeting the men and material requirements of the military, it has resulted in the MAF’s weakening over time.
It comes to no surprise that Australia’s Lowy Institute reported that Malaysia posted the largest drop in overall score of any country in the region in its annual Asia power index report – which measures resources and influence to rank the relative power of Asian states. We are now at the lowest ranking in terms of military capability, coming in at 16th out of 26 for 2021.
To stop the backsliding and equip MAF to meet the challenges ahead, the new government should carry out the following. First, implement the Freedom of Information Act as the current framework on information is tightly regulated by the Official Secrets Act 1972. This statute generally exempts all classified information from being disclosed for any purpose. The passing of such an FOI act should put a stop to the current practice of secrecy, so that defence policies and defence budgets are subjected to public scrutiny and debate.
Second, there is still little effective oversight of the Malaysian defence sector. It is time to revitalise and extend the term of the Special Select Committee on Security beyond the customary two-year shelf life. This will give it the long-term mandate to provide oversight of the policies, administration and budgets of the defence services. The committee should also work with the Malaysian Anti-Corruption Commission to reduce the misappropriation of funds.
Third, set a higher benchmark for future defence contracts, especially when it comes to meeting the needs of the end user. Case in point being the recent allegations of kickbacks in the tender for 18 light combat aircraft (LCA). Fighter jet manufacturers had to meet five requirements, including air-to-air refuelling capabilities, deployment of missiles beyond visual range, 30% local content and supersonic performance.
Several front-runners allegedly lacked the aerial refuelling capability needed to keep their aircraft in the air for lengthy flights. Some did not have integrated secure communication tools like a data link that exchange critical combat information about targets and threats. Both are essential to contemporary air war strategy and necessary for the end user.
MAF continues to face significant risks of political machinations and bureaucratic corruption. There is also no clear anti-corruption strategy in the National Defence Policy and portions of the annual defence budget are often set aside for unknown purchases. Delays or non-deliveries arising from the misappropriation of public funds will continue to handicap the military.
Like education, defence requires long-term planning as it takes years to construct and deliver assets like LCS. By implementing the suggestions, the government will be able to eliminate the problem of graft on national security.
This article was also published as “Make defence spending reforms a priority” in The Edge Markets on 16 March 2023.