A recently conducted survey found that 80% of Malaysia’s top business persons believed that corruption increased between 2010 and 2012. The survey, conducted by professional services firm KPMG, found several other disheartening trends, suggesting that despite pledges by Barisan Nasional to fight corruption, the situation remains dire.

Malaysia Bribery Corruption

Some 90% of business leaders believe that corruption is a major problem in regards to doing business in Malaysia. Such a high level of recognition does indeed suggest that corruption itself is prevalent. When corruption is widespread, it often discourages foreign investments from companies who simply don’t want to deal with the headaches caused by bribing and other illegal activities.

71 percent of respondents to the survey also claimed that bribery and corruption is an “inevitable cost” of doing business in the country, while 64 percent claimed that business couldn’t be conducted without paying bribes. These negative outlooks come despite the government’s pledge to up the fight against graft and the culture of corruption found in Malaysia.

It should be noted that KPMG received responses from only 10% of Malaysia’s 900 listed companies, which could call into question the accuracy of the survey.

Efforts to curb corruption in Malaysia appear to be failing

The ruling government under the Barisan Nasional coalition has promised to fight corruption and Prime Minister Najib has made it a cornerstone policy. At least on paper, the government has taken several important steps towards increasing transparency and oversight.

One of the first major moves made Prime Minister Najib when he was first elected was to establish the Malaysian Anti-Corruption Council (MACC) to combat corruption and increase transparency. The MACC was seen as an improvement over its predecessors, but critics charge that it is still failing to do its job.

Critics charge that the MACC is biased in its treatment of key issues, and often overlooks charges against well-connected individuals. Others contend that the MACC lacks the proper “teeth” to effectively carry out its mission.

The MACC recently hired a key leader from Transparency International- Malaysia (TI-M), Datuk Paul Low, who garnered considerable international and national respect in his role at TI-M. Interestingly, however, Datuk Low’s hiring appears to have actually caused more damage to TI-M’s reputation than improvements to the MACC’s reputation.

TI-M’s new leader, Datuk Akhbar Satar, has also been heavily criticized for his ties to the government. Datuk Satar was a member of the MACC’s predecessor, the Anti-Corruption Council (ACA). The ACA was widely viewed as a corrupt and incompetent agency, resulting in it being replaced by the MACC.

Government drops charges against high-profile former minister

The Malaysian government has come under increasing pressure to charge high-profile individuals linked with corruption, but few cases have made their way through the court system. On several occasions, well-connected officials have had charges dropped against them, often under rather questionable circumstances.

Former transport minister Chan Kong Choy was recently acquitted on charges of cheating when the government dropped charges against him. The charges centered around public development projects and the undisclosed use of bonds, among other things. The dropping of charges has solicited negative reactions from the general public and the Opposition.

Corruption to be key issue in next election

No matter who is at fault, or if corruption is truly on the rise, it will remain a key issue in the years to come. Charging that the ruling government is corrupt itself and incapable of reducing corruption on a national level has become a key tactic for the Opposition. Opposition leader Anwar Ibrahim has long charged that BN is incapable of eradicating or even reducing corruption.

The past election cycle turned out to be the most contentious one in the nation’s history. Chinese voters have flocked to the opposition, but perhaps more surprisingly, so too have middle class Malay voters, whom BN has previously relied on for support. Middle class and urban of all three of Malaysia’s major races (Indian, Chinese, Malay) have been shifting towards the Opposition, and the perceived corruption problem is often cited as one of the major reasons for the shift.