PETALING JAYA: Economists and anti-graft crusaders are emphasizing the importance of implementing rent-seeking legislation in Malaysia to address the shadow economy and combat economic corruption. Rent-seeking refers to the practice of using manipulative strategies to achieve financial gains without contributing back to the economy. Some examples include lobbying for government grants, subsidies, or tariffs, engaging in piracy, and eliminating competitors. These activities not only undermine the economy but also raise costs for consumers and discourage genuine entrepreneurial endeavors.
Dr Yeah Kim Leng, an economics professor at Sunway University, estimates that Malaysia’s shadow economy ranges between RM300 billion and RM600 billion, comprising 15%-30% of the country’s 2023 gross domestic product (GDP) based on current prices. He points out that implementing rent-seeking legislation, along with promoting transparency and competitive bidding in government procurement contracts and project awards, demonstrates the current administration’s commitment to eradicating corruption and rent-seeking activities.
Dr Shankaran Nambiar, a senior fellow at the Malaysian Institute of Economic Research (MIER), stresses the importance of transparency and good governance, particularly in government procurement. He emphasizes the need to improve procurement policies and processes to ensure the selection of the best bid at the lowest price. Dr Nambiar suggests conducting procurement electronically and sharing information among relevant stakeholders, with mechanisms in place to review decisions and allow for appeals.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid believes that enacting rent-seeking legislation is timely and necessary to ensure fair and transparent opportunities are granted only to qualified individuals. Similarly, former Transparency International Malaysia president Datuk Seri Akhbar Satar asserts that after 60 years of independence, it is high time to consider implementing this policy. He highlights the detrimental impact of the rent-seeking system on legitimate and competent Malay businesses, who may go bankrupt due to the unfair advantage gained by the “Ali Baba” practice. Akhbar emphasizes the need for tougher laws and enforcement to make the system harder to manipulate, including posting government contracts online for increased transparency and accountability.
In summary, these experts agree that rent-seeking legislation is essential to combat the shadow economy, eradicate corruption, and promote fair and transparent economic practices in Malaysia. By implementing such legislation and fostering transparency and accountability, the government can ensure equal opportunities and protect businesses from unfair practices.
Credit: The Star : News Feed
