This article first appeared in Forum, The Edge Malaysia Weekly on March 13, 2023 - March 19, 2023

As a middle power located in a reasonably peaceful region, Malaysia traditionally has not prioritised defence spending, compared with healthcare and education. Beginning in the 1990s, the government began purchasing new defence assets to improve the military’s operational capacity. The ongoing financial controversy surrounding the RM9 billion littoral combat ship (LCS) project, however, is just one example in a series of the misappropriation of public funds under the pretext of meeting the nation’s defence needs.

Our territorial security is now at risk as the scandal has jeopardised the Malaysian Armed Forces’ (MAF) long-term plans. The navy’s western fleet announced last October that it will be difficult to defend the country without the six LCS and the second batch of eight littoral mission ships (LMS). Malaysia now lags behind rivals Singapore and Indonesia in terms of naval assets — despite implementing a 15-to-5 fleet transformation programme in 2015. (Under the programme, the Royal Malaysian Navy aims to reduce its assets from 15 classes of vessels to just five.)

Transparency International (TI) recently released its 2022 Government Defence Anti-Corruption Index. Out of 82 countries, Malaysia was placed in band D, the high-risk category for corruption in the defence and security sector.

Some of the negative impacts of corruption, according to experts, are first, dishonest officials may not award contracts to the most effective supplier, which reduces overall bureaucratic effectiveness. Dishonest suppliers may block the admission of new ones, creating monopolies. Second, public funds may be used to award projects based not on merit but bribes. It also dampens entrepreneurial spirit, as corruption impacts investments and how human resources are allocated. Finally, corruption raises the overall cost of government spending by acting as an unnecessary “tax” on transaction costs.

The MAF has long been seen as guardian of the country’s security and territorial integrity. First with its sterling service post-independence during the communist insurgency, followed by the Indonesia-Malaysia Konfrontasi and thereafter, proudly flying the flag in United Nations peacekeeping operations in Bosnia Herzegovina and Somalia, among others.

Unfortunately, the MAF has become a shadow of its former self, facing challenges meeting the changing regional security landscape on all four fronts — strategic, geopolitical, security and economic. This is primarily because of failure to replace assets acquired 25 years ago.

Such is the case with the navy. It once fielded 16 combatant ships with missile capabilities. But because of obsolescence of armaments and the ageing of equipment, its current annual requirement of 5,000 ship days at sea is increasingly difficult to maintain. For example, the last major combat ship — Korvet Kelas Laksamana — was purchased in 1997. The high operational and maintenance costs of these outdated ships directly impact the navy’s ability to maintain its presence and protect Malaysia’s sovereign rights, which span 569,845 sq km of economic exclusive zone areas and 65,035 sq km of territorial waters.

On Dec 2, 2019, Malaysia declared itself a “maritime nation with continental roots” in its first defence White Paper, acting as the fulcrum connecting the Indian and Pacific Oceans, a key section of the Indo-Pacific geopolitical framework. Because of its past fighting the communist insurgency, Malaysia became entrenched in an army-centric mindset, despite the country being surrounded by three large bodies of water: the South China Sea, Pacific Ocean and Celebes Sea. Therefore, the navy and air force have about 15,000 personnel each, while the army has 80,000. The latter also receives double the budgetary allocation to the detriment of the other services.

It comes as no surprise that Australia’s Lowy Institute reported that Malaysia posted the largest drop in the overall score of any country in the region in its annual Asia Power Index report — which measures resources and influence to rank the relative power of Asian states. We are now at our lowest ranking in terms of military capability, coming in at No 16 out of 26 for 2023.

To stop the backsliding and equip the MAF to meet the challenges ahead, the new government should carry out the following. First, implement the Freedom of Information Act as the current framework on information is tightly regulated by the Official Secrets Act 1972. This statute generally exempts all classified information from being disclosed for any purpose. The Prime Minister’s Department is now finishing up the policy study necessary to write a Freedom of Information bill. The passing of such an Act should allow public scrutiny and debate of defence policies and defence budgets.

Second, there is still little effective oversight of the defence sector. It is time to revitalise and extend the term of the Special Select Committee on Security beyond the customary two-year shelf life. One of Dewan Rakyat Speaker Datuk Johari Abdul’s top priorities is the re-enactment of the Parliamentary Services Act and upgrading the parliamentary select committee to give parliament more authority. This will give it the long-term mandate to provide oversight of the policies, administration and budgets of the defence services.

Third, set a higher benchmark for future defence contracts, especially when it comes to meeting the needs of the end user. Case in point being the recent allegations of kickbacks in the tender for 18 light combat aircraft (LCA). Fighter jet manufacturers had to meet five requirements, including air-to-air refuelling capabilities, deployment of missiles beyond visual range, 30% local content and supersonic performance.

Several front runners allegedly lacked the aerial refuelling capability needed to keep their aircraft in the air for lengthy flights. Some did not have integrated secure communication tools like a data link that exchange critical combat information about targets and threats. Both are essential to contemporary air war strategy and necessary for the end user.

MAF continues to face significant risks of political machinations and bureaucratic corruption. There is also no clear anti-corruption strategy in the National Defence Policy and portions of the annual defence budget are often set aside for unknown purchases. Delays or non-deliveries arising from the misappropriation of public funds will continue to handicap the military. Like education, defence requires long-term planning as it takes years to construct and deliver assets like the LCS.

Jamil A Ghani is public sector engagement manager at the Institute of Strategic and International Studies (ISIS) Malaysia

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