PRIME Minister Datuk Seri Najib Razak will go down in history as the creator of the Performance Management and Delivery Unit (Pemandu) and 1Malaysia Development Bhd, which were established as agents of change to transform the fabric of the Malaysian economy and civil administration.
Pemandu's task is to transform the government and consequently the economy, while 1MDB's role is to act as a catalyst for high-impact projects that will raise the Malaysian economy to a whole new level.
While their objectives are almost the same, the two organisations have very different standards for disclosure of their operations, progress of development and display of end-results.
Pemandu has a voluminous tell-all annual report detailing the progress of the various key economic areas and the pipeline of investments that may come into the economy in the future, making it the only agency to collate information on future projects coming into Malaysia. Apart from future projects, there is so much information in the annual report that what Pemandu does with its supposedly huge budget does not draw scrutiny.
Meanwhile, 1MDB's annual report is not as easily available as that of Pemandu. For a copy, one has to go to the Companies Commission of Malaysia (CCM) and view it from the system there. If a printed copy is needed, a fair bit has to be forked out at the counter.
Why is 1MDB, a federal-sponsored investment arm, not making available its annual report and yearly state of accounts on its website?
Most government agencies disclose a fair amount of information on their websites and even hold annual media conferences to explain the utilisation of funds and returns. Khazanah Nasional Bhd and the Employees Provident Fund (EPF) hold annual briefings to reveal their performance.
In this respect, there has been little forthcoming from 1MDB. This is something that needs to be rectified, considering that it is being funded with guarantees from the federal government. Based on its 2010 annual report, a pertinent question that 1MDB has to answer is why the RM3.49 billion investment was converted into a RM4.14 billion loan.
The investment was through a joint venture with PetroSaudi International (PSI) for oil and gas projects in the Caspian Sea. The loan is to be repaid in 2021.
Apart from the PSI loan, 1MDB is taking the lead in the development of government land in prime areas in Kuala Lumpur. Some 70 acres in Jalan Tun Razak is being shaped into a financial district called the Tun Razak Exchange, while the old airport in Sungai Besi, renamed Bandar Malaysia, is being converted into a mixed-use development. 1MDB has also gone extensively into the energy sector, buying up power plants to beef up its steady cash flow.
The crux of the matter is that the functions of 1MDB and Pemandu are to a large extent already being carried out by existing federal-government agencies.
1MDB is a smaller mirror of Khazanah, which has extensive interests in the property development and energy sector. Khazanah is the largest shareholder in Tenaga Nasional Bhd, the dominant electricity provider in the country.
As for Pemandu, to a large extent, its work is already being done by the Malaysian Industrial Development Authority (MIDA) and various other agencies established to encourage domestic and foreign investments. These agencies include the authorities responsible for developing the corridors and even the likes of Halal Development Corp and Multimedia Development Corp.
When it comes to getting official approval for incentives and licences, everything is centralised at MIDA. So, by virtue of MIDA's authority to approve licences and incentives, its numbers when it comes to committed investments are far more reliable. For instance, in 2012, approved investments from various segments of the economy totalled RM162.4 billion. Whether the approved investments turn into reality is another matter.
However, what MIDA has been unable to do is to remove the red tape at the state and federal levels to get the projects moving. This is Pemandu's greatest asset. It has managed to get the mass rapid transit (MRT) project off the ground and Dialog's multi-billion-ringgit petroleum terminal project in Pengerang beyond the planning stages.
For years, these projects could not get moving but Pemandu, led by Datuk Seri Idris Jala, who has the ear of the prime minister, managed to get them off the ground.
Going forward, this is a role best suited for Pemandu — handling high-profile projects that cannot get going due to a lack of political will. The key is to get a non-politician with ministerial status to lead a downsized Pemandu. It would be equally effective and reduce the overlap between the various agencies in the civil service.
As for 1MDB, it is here to stay for a long, long time. It will be up to the newly elected set of leaders to figure out a way to justify, rationalise or untangle the PSI investment that has turned into a loan. This will cast a shadow over Najib long after the general election.
M Shanmugam is managing editor at The Edge Malaysia
This story first appeared in The Edge weekly edition of Apr 08-14, 2013.