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Opening speech by Penang Chief Minister Lim Guan Eng at the Inaugural Conference of the ASEAN Coalition for Clean Governance at the E&O Hotel, George Town on Monday, 25th June 2012: Opening speech at the Inaugural Conference of the ASEAN Coalition for Clean Governance The ASEAN Coalition Of Clean Governance Seeks To Establish A System That Ensures Policies Are Made For Public Interest Through The Essential Mechanism That Establishes Institutions Which Builds Integrity In Leadership And Decision Making, Effective Internal Controls To Check And Punish Corruption As Well As Rewarding Whistle-Blowers. On behalf of Penang Institute as well as the state government of Penang, allow me to start by wishing everyone a warm welcome both to Penang as well as to the inaugural conference of the ASEAN Coalition for Clean Governance. Organising a conference in the midst of the month-long internationally renowned George Town Heritage Fest with the theme “What enables clean governance in democracies? ASEAN perspectives.”, is appropriate. After all George Town future as a UNESCO World Heritage City is inextricably intertwined with its survival linked to clean governance. Clean governance is an issue that is very close to my heart. It is one of the reasons why I am here as the new Penang Chief Minister and one of the critical reforms in my administration which will decide whether I will still be around. Therefore, it is important to understand the correlation between development and clean governance. History is rife with numerous examples throughout the world where weak governance, corruption and abuse of power have resulted in grinding poverty and the widening wealth inequality and income disparity. When a government is corrupt and inefficient, it is almost a certainty that its economic development will be unbalanced, inequitable and even unfair; with its socio-economic distribution skewed in favour of the cronies. Clean governance can be broadly defined as a system that ensures policies are made for public interest through the essential mechanism that establishes institutions which builds integrity in leadership and decision making, an effective internal control to check and punish corruption as well as rewarding whistle-blowers. More specifically, we need to understand whether clean governance is relevant in the Asean context to engender social, political, economic and sustainable development. It is for this reason that the Penang Institute has organised this conference today by bringing together leading proponents of clean governance from around the region with the aim of raising awareness of clean governance, discussing its enabling factors, setting up institutions, exchanging experience and more importantly establishing a culture of clean governance throughout ASEAN. Ladies and gentlemen, Extraordinary Times Should Not Forget The Importance Of A Return To Basic Principle, Of Doing Not Only The Right Thing But Also Doing It Right. We are gathered here in extraordinary times. The global picture today is one that would have been unrecognisable just a decade ago. Today we see totalitarian governments and once-untouchable dictatorships being toppled one after another like dominos. Meanwhile, the Western economies are teetering on the edge of a meltdown, consumed by the weight of a crunching debt crisis that offers little room for optimism. We are now living in extraordinary times. The effects of the global economic crisis are already obvious. ASEAN economies will not be spared and is expected to face weakening exports and a slowdown in FDI. As a result, economic management has become an increasingly challenging effort. In these extraordinary times, some say we require extraordinary ideas and extraordinary efforts. However we should not forget a return to the basic principle of not just doing the right thing but also doing it right. ASEAN countries are bound together not only by geography and economy, but also by cultural and political values. In that sense, this great economic challenge that we are facing is a collective dilemma, and must therefore be met by collective leadership and collective action. The need for clean public institutions When I talk about leadership, I am not only talking about economic leadership. While that is important, I would like to suggest that there is also a need for ethical leadership. In other words, in such dire times, the only way to ensure protection for the people is to ensure that public institutions are strong, resilient and most importantly, clean. The pillar of a society is its public institutions, which can be defined as the “rules of the game” which govern the interaction within and between governments, markets and society. Now, imagine if the rules of the game were not firm, or if the enforcement of the rules were lax. You would have irresponsible parties taking advantage of the system in order to enrich themselves and worse, to suppress the rights of others. This is how a corrupt and oppressive society is formed. Former World Bank President James Wolfensohn summarised it well by saying, “The causes of financial crises and poverty are one and the same... If countries do not have good governance, if they do not confront the issue of corruption, if they do not have a complete legal system which protects human rights, property rights and contracts... their development is fundamentally flawed and will not last.” In other words, the relationship between public institutions and the socio-economic development of a society is a symbiotic one. Good and clean governance will result in positive socio-economic development. Conversely, ineffective public institutions and weak governance will facilitate corruption, misguided allocation of resources, arbitrary justice and excessive government intervention. This will in turn reduce economic competitiveness, deter private sector investment and prejudice the distribution of wealth. Freedom is empowerment True development is not merely material but must also refer to the accessibility and availability of opportunity to a society. In other words, a truly developed society is one where its people are empowered with the freedom to fulfil their aspirations and capabilities. In this, I am guided by the great economist for the poor and Nobel Laureate Amartya Sen, who questions the fundamental assumption of development economics by arguing that development should not be measured primarily by wealth or income. According to Sen, poverty is not merely material but should also be seen as the “deprivation of basic capabilities”, which he defines as human freedoms. In other words, development is a process of expanding the instrumental freedoms of individuals, which he encapsulates in five elemental forms:
Political freedoms encompass basic human rights, such as freedom of expression, freedom of the press and freedom of information. It also significantly refers to public participation, checks and balances, the need for democratically-elected bodies at all levels as well as institutional respect for the rule of law. Economic facilities are defined as the availability of access to economic resources, markets and female participation in the workforce, while social opportunities refer to education, health and other community facilities that allow individuals to gain better agency. Transparency guarantees are meant to ensure a mechanism for seeking justice, the prevention of corruption, abuse of power and conflict of interest through public disclosure of information. Lastly, protective security talks about the need for the state to provide a social safety net to mitigate deprivation and poverty caused by epidemics, natural disasters and war. These five forms of human freedoms as described by Sen are complementary and interrelated concepts that encompass processes as well as opportunities. They are both a fundamental aspect, as well as an enabler to achieving development. In other words, they are not only the means but also the ends. More importantly, we must understand that Sen’s hypothesis is centred on the idea that freedom is empowerment. By providing the instruments of freedom to an individual, we will enhance the ability of individuals to fulfil their own potential and capabilities. It is this collective empowerment of individuals that will in turn lead our societies to true development. Institutionalising freedom through clean governance If we make development our objective, and we recognise that freedom is both the means and the ends to development, then it follows that we must build public institutions that embrace the universal of truth, accountability and transparency. After all, Sen’s parameters of human freedom entail the fulfilment of basic human rights, political equality, socio-economic justice, equitable access to opportunity, fairer distribution of wealth, integrity in leadership and commitment to the rule of law. Thus, the only way to crystallise these parameters of freedom is to institutionalise them through the instruments of democracy. In other words, freedom can only be guaranteed and protected by clean, efficient, accountable and transparent public institutions. I would hence like to suggest that public institutions should conform to a universal framework of good governance as described by the United Nations Development Programme (UNDP). This framework contains five principles, which are:
It is critical to recognise that public institutions must be democratically legitimate and participatory in nature. All men and women should have a voice in decision-making, either directly or indirectly. Such participation can only be built by honouring basic rights such as freedom of association and speech. At the same time, governance must be guided by a strategic vision that is both forward-looking and cognisant of the complexities of its local history and society. Institutions and processes must also be robust and responsive in order to serve its stakeholders effectively. Very importantly, they must also be accountable and transparent. Decision-makers are ultimately responsible to the public, and must therefore ensure that the public have direct access to sufficient information. Lastly, governance of public institutions must be fair and provide equality regardless of gender or skin colour. Above all, it is imperative that institutions are guided by the rule of law. However, we must also ensure that the law is responsive to freedom, justice and the tenets of human rights. These five UNDP principles of good and clean governance must act as our guide if we wish to achieve development without compromising on freedom and democracy. CAT governance: the Penang experience Penang’s commitment towards clean governance is exemplified by CAT of competency, accountability and transparent administration. CAT has managed to arrest the graceful decline of Penang over the 18 years prior to 2008. Based on CAT principles, we became the first state in Malaysia to introduce open competitive tenders for all public procurements and supplies. To the outside world, this is normal practice. However, it was ground-shattering in our country. We were immediately subject to a barrage of criticisms from various quarters who felt that their rice bowls were threatened. By implementing open competitive tenders, we effectively eliminated the opportunity for corruption. Previously, contractors had to seek out “middlemen” for projects. Now, everything is done online through our e-Procurement system. Where previously the road to a government contract required political connections, it now only requires an internet connection. In addition, we disclose fully the contents of government contracts signed with the private sector. We have also passed the Freedom of Information Enactment which allows disclosure of government contracts for public scrutiny. What’s more, we have also taken steps to engage the public on the state government’s proposed projects and plans. To top it off, we have also become the first state in Malaysia to have the entire state executive council (EXCO) including the Chief Minister make a full public declaration of assets. And more recently, we have sought to empower more decentralised decision-making by passing the Local Government Elections Enactment, as part of our commitment towards participatory governance. Our efforts are bearing fruit. In the last four years, we have turned the state’s finances around with surplus budgets for every single year since we took over. More importantly in an era of high debts, we have successfully reduced state government debt by 95 per cent, from RM630 million when we took over to just RM30 million today. For all our efforts, we have garnered accolades not only from the Auditor-General’s annual reports, but we have also become the only state government in Malaysia to be praised by global anti-corruption watchdog Transparency International. However, praise alone does not mean anything if it is not translated into real achievements. For the first time in Penang’s history, we managed to become the number one investment location of the country in 2010. Over the last 2 years, Penang contributed towards nearly 30 per cent of Malaysia’s total foreign direct investment (FDI). For a state with only 6 per cent of the country’s population, we are certainly punching way above our weight. George Town is now the most livable city in Malaysia in 2011. And to prove that it was no fluke, we followed up by repeating this feat this year. Last but not least, CAT governance is not only about clean governance but also about providing democratic space and fostering a culture of freedom. For example, we established the first Speaker’s Corner in Malaysia, where one can not only enjoy freedom of speech, but also freedom after speech. We allow people to speak their minds, even when it is often used to speak out against us. More importantly, we also believe that it is incumbent upon the state to provide economic facilities and social opportunities for the people. As such, we embarked on a string of people-centric social welfare programmes that have seen Penang become the first state in Malaysia to eradicate hardcore poverty and on our way to wipe out poverty completely by 2015. In addition, we also go to great lengths to ensure that the downtrodden are taken care of by giving cash aid to senior citizens, single mothers, the disabled, schoolchildren, newborn babies, subsidised dialysis treatments and even free bus services in the inner city and across our famous Penang bridge. This is all part of our commitment to ensure that our people enjoy freedom from want. The Penang Declaration Of Clean Governance: laying future foundations It is my hope that our conference today will mark the beginning of a strong movement for clean governance in ASEAN. It is especially important in current times to ensure clean governance of our public institutions and freedom of our people. To do this, we must be aware of the collective aspirations of our people. We must be responsive to their needs and engage them on their wants. Above all, freedom must be institutionalised. And so, at the end of today’s proceedings, we hope to launch an important document, titled “The Penang Declaration”. It is a document that symbolises the commitment of the participants here today in acknowledging the principles of clean, accountable and transparent governance, and the universal values of truth, freedom and democracy. It also recognises the need for clean governance and the rule of law in order to attain socio-economic development and progress, as well as the necessity of building public institutions. The Penang Declaration will reaffirm the five principles of good governance as described by the UNDP, as well as to encourage the implementation of public declaration of assets, open competitive tenders and the disclosure of government contracts. Perhaps significantly, the document will also call for an important element of the anti-corruption process, which is the need for whistle-blower protection. In addition, our coalition will also bear no tolerance for corruption and abuse of power by insisting that powers of prosecution in corruption cases must be independently-wielded. Finally, the Penang Declaration is a pledge to embrace cultural and social transformation in governance and integrity to engender inclusive, equitable and participatory social, political, economic and sustainable development for the people of ASEAN. Conclusion Ladies and gentlemen, The Penang Institute would like to thank everyone for attending the day’s proceedings, especially our distinguished speakers who are great leaders in their own countries. We have guests from Thailand, Indonesia, Singapore, Philippines and Laos. It is indeed a proud day for Penang and the Penang Institute. I am certain that everyone here today shares our desire for improvement in governance, and I hope that the establishment of this ASEAN Coalition for Clean Governance will be the first step of a collective journey towards this ideal. As such, I thank you all once again for taking this important step together with us. Together, we will face the scourge of corruption and abuse of power by advocating, encouraging and implementing clean governance. We do this because it is our responsibility to. In the words of Edmund Burke, “the only thing necessary for the triumph of evil is for good men to do nothing.” And remind ourselves that cleanliness is next to holiness! With that, I wish all of you a happy conference ahead. *Lim Guan Eng, Penang Chief Minister
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