Malaysia’s ruling government, under Barisan Nasional, has come under heavy criticism for corruption and cronyism. In response, the government has launched a wide array of anti-corruption bodies and policy efforts to stamp down on graft, or to at least appear publicly to be addressing the problem.

Malaysia

Malaysia only 53rd overall

These efforts, however, have paid off in only a 1 spot bump for Malaysia. The country is currently ranked at 53rd out of 177 nations, up from 54 from a year ago. Malaysia does come in as the third-least corrupt country in the region, easily beating out the Philippines (94), Thailand (102), and Indonesia (114). Singapore comes in at number 5 globally and has maintained its reputation as one of the least corrupt countries in the world.

Malaysia has taken numerous steps to combat crime. The government has set up a special agency and court to hear corruption cases, though so far its effectiveness has not been proven. Critics have also criticized the government for not using a competitive bidding process and open tenders when awarding government contracts. Many believe that these contracts are given out to cronies, who then repay politicians with financial rewards and other favors.

While Prime Minister Najib has made fighting corruption a cornerstone of his policies, he has long been rumored to be involved in illicit deals himself. French courts are currently investigating the sale of two Scorpene submarines, based on the allegation that bribes were paid to Malaysian officials. French courts are examining massive transaction fees, totaling hundreds of millions of dollars, and a purported $1 billion dollar request from Najib himself during the dealings. A Mongolian model was later killed in an incident believed to be linked to the deal.

Critics have argued that the situation could actually be far worse. Illicit capital outflows, which is the total amount of money illegally taken out of a country, were estimated to be the second highest in 2010. Money is generally taken illegally out of a country when it is earned illegally through criminal means. 2010 saw a massive spike of illicit outflows to $64 billion dollars, far above the annual average of $28 billion dollars.

Malaysia’s problems go beyond corruption

With oil revenues running out and costs rising, Malaysia now faces numerous budget problems. As finances tighten, graft and corruption may become more difficult to fight, while the financial impacts will become exaggerated. While the next round of elections are almost five years away, opposition parties have been blasting Barisan Nasional for their handling of the government and the high levels of corruption. As such, the issue will likely become even more important and visible in the years to come.