PETALING JAYA, June 17 — Malaysia should chart its own path when it comes to finding the right formula for good governance instead of simply copying the guidelines provided by global financial entities such as the World Bank.
Khazanah Research Institute senior adviser Jomo Kwame Sundaram added that development could be undermined if the government were adopt practices wholesale from countries that had success rates, attributing them to historical and cultural differences within the local society.
“Governance indicators did not help us distinguished from developing countries that are doing well like China or Malaysia during the early and mid-90s and countries in the doldrums like Sub-Saharan Africa.
“You can’t tell them apart by looking at good governance indicators. If trying to reform a country, you must recognise specific challenges involved in that country. Simply introducing best practices don’t make sense, as best practices comes out of a particular context.
“You can abstract all you want in intellectual fashion but you won’t achieve the desirable outcome. What is needed is an appropriate governance approach. You need to recognise what reforms are needed.
“You can have lots of good governance indicators but it doesn’t have much guidance on what is necessary, what to prioritise and achieve. So good governance must be approached like crossing the river by feeling the stones,” he said at the Malaysian Economic Convention 2019 here.
Jomo added that widely used measurements such as the World Bank’s reports are not contextually accurate and can be very difficult to replicate as each government is different and it is designed to serve the needs of a different people.
However, the senior economist did not dismiss the guidelines outright, saying that Malaysia can learn from it, especially from countries facing a similar situation but the nation must also be aware and understand the historical context and conjunction behind another country’s success and apply reforms and good governance according to the domestic requirements.
He warned that there is the real danger of transposing another country’s success story and best practices as it might undermine local development.
Historically, the literature and most arguments on good governance was taken from the lessons gleaned in sub-Saharan Africa in the late 1980s and 1990s where the nations there faced development slumps.
Jomo observed that data from China and South Korea, nations with poor good governance indicators but strong development was not taken by the World Bank, leading to a very biased view on whether or not good governance can lead to good development.
“You find that most arguments on good governance take mostly from sub Saharan Africa instead of taking China and Korea which has done well despite bad governance indicators.
“Invariably major governance indicators are subjective measures, and it is the subjective measures of foreign investors. It isn’t what the domestic investors are thinking about and they make up 90 per cent of investors in most countries.
“This is true from how World Bank’s Doing Business Report — the most cited publication of the World Bank, have all kinds of biases but no one talks about the biases,” he said.
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