Family ties lubricate Malaysia wheels of power by Michael Backman The Age August 10, 2005 I've long written that Malaysia is more modern and sophisticated than it gets credit for. But it's a position that sometimes embarrasses me. Events of the last few weeks are a case in point. Malaysia has a car industry it doesn't need — certainly not on economic grounds — and Proton, the national car, is profitable because it is heavily shielded from imports. Former prime minister Mahathir Mohamad, Proton's special adviser since he left office, has been strident in taking up the company's cause. Malaysians need an approved permit to import cars, the number of which has tripled in recent years. Last month Mahathir questioned why so many permits had been awarded. The imports were hurting Proton, he said, and he called for the list of permit holders to be made public. The responsible minister, Rafidah Aziz, claimed that, in fact, she wasn't responsible. The permits had always been granted with the prime minister's knowledge and, in any event, Mokhzani, one of Mahathir's sons, was a recipient. She added that Proton was shoddy and should become more competitive rather than hide behind government protection, a view with which most Malaysians would concur, at least on the first point. Some in the government then accused Rafidah, ironically one of Mahathir's strongest supporters during the decades in which he was in power, of being rude to the ex-prime minister. She responded in a press conference that Mahathir was like a father to her. Then she burst into tears, not so much a polite dab-of-the-eyes-type cry, but a full-throttle howl. She has nothing to do with any permit holder, she claimed. "The Koran is my witness," she said dramatically, laying her hand on the said book. Prime Minister Abdullah Badawi decided that the list of permit holders could be published. It emerged that the single biggest holder for this year was none other than Mohamed Haniff Abdul Aziz, a former senior officer in Rafidah's ministry. Rafidah's niece Annie and her husband Zulkifli Ishak had also been allocated 199 permits this year and 850 last year. Many other well-connected individuals had been given permits, too. Customs director-general Halil Abdul Mutalib weighed in to further explain the policy to an increasingly appalled public — but how the system really works was made clear to all with the revelation that a company owned by his own son had been awarded permits. In total, at least a fifth of all new permits had been allocated to ex-officials or to the families of officials. Many permits, which are handed out free, are not even used by those allocated them, but are sold on — typically for windfall profits of up to $US14,000 ($A18,300) per permit. It must be said that Rafidah, who has served as Malaysia's Trade Minister for 20 years is hard- working, capable and knows her way around the minutiae of international trade like no one else. But this was not the first time that Rafidah's family has been seen to benefit from government patronage. Back in 1993 it emerged that her son-in-law had been awarded a huge share allocation under a government scheme that provided for quotas of new shares to be allocated to ethnic Malays. Rafidah responded by naming relatives of other officials who had similarly benefited. But this should not be taken as corruption or nepotism for the few. In Malaysia, the bucket of government largesse is sloshed around so much that literally millions of Malaysians benefit from government-awarded privileges. It is explicit government policy. Former finance minister Daim Zainuddin once told me that the thing that took up most of his time in office was approving licences and contracts: he had to ensure that the distribution and balance was just right to keep everyone on side. But what's missing is transparency. The reference by Rafidah to Mahathir as a father was telling. That is how government leaders in South-East Asia like to run — as families. It helps to avoid scrutiny. After all, who wants to openly criticise their father? But respect is no substitute for openness. No longer is such third-world nomenclature appropriate for a modern world, and certainly not for Malaysia. Its ministers, instead of acting like capable and accountable professionals, all too often operate like sycophantic family members grouped around some village headman. Prime Minister Abdullah declared it was time for the practice of giving permits to "certain" people to stop. Possibly he thinks it is time for Rafidah to go, but she isn't likely to of her own volition. The permit system will be discussed by cabinet, several members of which are outraged by the matter. Rafidah will have a 25-page briefing paper on the system. No doubt she'll also have a file many times thicker detailing the licences, permits and contracts awarded to the families of her cabinet colleagues. She's not the world's longest-serving trade minister for nothing. In an unrelated matter, Malaysia's High Court has come up with one of its silliest decisions yet. It dismissed an application by two London-based casinos to register a judgement in Malaysia to recover almost $US2 million in gambling debts from a former chief minister of Malaysia's Sabah state. It did so on the grounds that profiting from gambling is contrary to Malaysian national philosophy, notwithstanding the fact that Malaysia is home to the Genting Highlands Casino, the biggest casino in Asia. If an Indonesian court made a decision like that, you'd assume the judge had been bribed. ends