Malaysia - Corruption

Since there is a lot of international news lately with corruption in Malaysia related to 1MDB and the seizure (by the US justice dept) of roughly 1bil USD in assets linked to people involved with it, I thought I would do a quick article on corruption in the country.

Transparency international ranks Malaysia at 54/168 out of the countries that they review. Local perception is corruption is widespread and can be seen at all levels. At the lower levels, we have individuals expecting cash handouts from politicians when they are campaigning. Slightly higher in the government sector, we have police officers who are always ready to settle traffic violations under the table for 50RM or so, instead of the 150-300RM ticket. Higher in the corporate or government sectors, we have procurement people and managers who expect vendors to bribe them in order to get their company to buy the vendor's products or services. Even higher than that, we have larger scale corruption on large government projects. The most recent example: 1MDB.

1MDB was set up as a government investment fund that was supposed to improve the economic situation of Malaysia and improve the infrastructure. What the people have gotten is billions in missing money, billions in bad loans, shutting down media outlets who were reporting the story early on in the timeline of events (The Edge [business news], The Malaysian Insider), murders of certain individuals "in the know", the anti-corruption investigation agency was raided by the police, and the replacement of anyone that would even consider investigating or prosecuting anyone involved. So internally, there is little hope, yet there are many countries around the world that are investigating and seizing assets. The wall street journal even have a special coverage section on their website to cover the major news on this story. 1MDB is just one of many high profile scandals over the last few decades.

So where does that leave us? Overall Malaysia has a lot of problems that are obvious to the people here, but there isn't enough political force to change. The locals will freak out if there is a rumor of pig being in anything they might eat, yet many have little concern about the lawfulness of their earnings (or paying bribes). For the average employee at a company, you won't encounter many problems as long as you aren't buying or selling products. As for the traffic police, they don't get out much to enforce anything. When you see them, its at road blocks pulling over a few cars and trucks here and there. The concern for the average person is how all of this will affect the future. A few million missing from a project here and there is much different than the whole nation being indebted for many billions that the tax payer will need to cover or risk other economic fall out. For any potential businessman that wants to come here, do some further research and expect some disappointments. That isn't to say there isn't good opportunity here, and some honest business. Just be aware.