Kuala Lumpur, 29 April 2020 – IDEAS congratulates the Malaysian government for improving its transparency index in the 2019 Open Budget Score (OBS). The OBS evaluates the level transparency, oversight and public participation in budget practices of 117 countries. The 2019 transparency index is measured by evaluating the content and publication of eight budget documents in 2018. The 2019 OBS, which was released today by the International Budget Partnership (IBP), saw Malaysia’s transparency score improves from 46 in OBS 2017 to 47 in OBS 2019.
The new score is a recognition of a commitment of the previous Pakatan Harapan in improving budget transparency and oversight. In its short-term in office, the coalition has improved the capacity of the legislative body for budget oversight by establishing the Parliamentary Special Select Committee in Budget. This committee has met several times to deliberate on government finances including debt and liabilities since early last year. In fact, the government tabled the 2019 Budget Mid-year Review Budget to this committee in August 2019. Another important improvement is the disclosure of government guarantees and contingent liabilities in the Fiscal Outlook Report. The latest Fiscal Outlook even has a section evaluating Malaysia’ debt sustainability. IDEAS hopes that this section will stay as a permanent feature in the Fiscal/Economic Outlook document. Since early this year, the public can also access the Supply Act passed by parliament in the Treasury Website.
Most of these developments took place since early 2019 and unfortunately happened after the research period for this release of the Open Budget Survey.
To account for these positive developments, IDEAS carried out an interim evaluation of Malaysia’s budget documents published in 2019, which was reviewed by IBP. Based on this interim evaluation, the initiatives taken by the Pakatan Harapan would increase Malaysia’s Open Budget Index by an additional five points. In fact, if the Mid-Year Report tabled to the Budget Committee is published to the public, the transparency score could go even higher, and reach 56 by the next round of the OBS.
This a significant improvement that the current government should continue to work on. Budget transparency will not only help in ensuring effective allocation of budgetary resources and implementation of government policies but also in promoting public trust towards the government.
We also want to highlight that the crisis requires even a higher commitment from the government to budget transparency because resources should be allocated more effectively during this time. IDEAS applauds the establishment of LAKSANA to implement and coordinate the current economic stimulus and the prompt reports that the Minister of Finance provides on the implementation. But we also reiterate our earlier call to disclose funding resources and its impact on Malaysia’s debt level. We hope that the government will update us on this information in the next parliamentary session.
While congratulating the government on this achievement, the OBS 2019 score also reminds us that Malaysia still has to work harder to improve its budget oversight and public participation mechanisms. We have not made a significant leaf in these two elements this year and this underlines the importance of continuing parliamentary reforms that we have started last year.
Malaysia is close to joining the group of countries that provide sufficient levels of budget transparency – scores of 61 and above. By publishing documents and information that the government already produces by the end of 2020, Malaysia can reach that important benchmark in the next round of OBS. This may only seem like a few points on the Index, but it will be a critical step for the government to show us their commitment to the transparent and accountable use of our public resources. IDEAS is committed to continue supporting the government to achieve this benchmark.