Bloated Malaysia Civil Service Presenting Headache for Najib
(Bloomberg) – United Malays National Organisation, has for decades propagated policies that provide favorable access to education, jobs and housing for Malays and indigenous people, known collectively as Bumiputeras.
Malaysian Nor Mohamad loved her job with a major Western tech company. But she gave it up after two years, tired of bickering with her parents who felt she’d be better off in the public service.
“It’s boring but stable,” said the master’s degree holder, who is in her thirties and asked not to be fully identified, citing government policy. “Even though I’m not so in love with the job, I’m thankful that in this economic situation there’s no bad impact to my career.”
Malaysia’s civil service employs 1.6 million people, or about 11 percent of the labor force. The jobs provide stability and security, including for ethnic Malays who are the majority of the population. Now the bloated bureaucracy presents a challenge to Prime Minister Najib Razak.
Najib, whose ruling coalition Barisan Nasional has been in power for nearly 60 years with the help of the Malay vote, has pledged to gradually narrow a budget deficit the country has been running since the Asian financial crisis. The commodity-driven $296-billion economy is expected to grow at the slowest pace in seven years in 2016, with lower oil prices eating into revenue.
But trimming the public workforce to improve the government’s coffers is difficult. While Najib has survived a year of political turmoil over funding scandals, he needs the support of Malays to win the next election due by 2018. His party, the United Malays National Organisation, has for decades propagated policies that provide favorable access to education, jobs and housing for Malays and indigenous people, known collectively as Bumiputeras.
“The civil service in Malaysia is intricately jived in with the ethnic policies” of the government, said Jayant Menon, an economist at the Asian Development Bank. “This is a form of ensuring not just employment, but relatively attractive employment.”
Malaysia’s civil service relative to population is large, at more than double the average in the Asia-Pacific region by some measures, according to Menon. The cost of maintaining it is draining resources at a time government revenues are falling.
Salaries, pensions and gratuities account for about a third of the budget every year, the biggest expenditure item. The government doesn’t regularly publish data on the size of the public service.
