Dr Wolfgang Sachsenröder during his presentation (Credits: ISEAS – Yusof Ishak Institute)
The spiralling costs of election campaigns in recent years has not been met by increases in available funding to political parties. In Indonesia and Malaysia, party membership fees are nominal and public funding is rare and insufficient. In these nations donations have become the biggest source of income for political parties and successfully fundraising has become commensurate with political success. Donations to politicians and parties are largely unregulated or, if regulated, unenforced. With a more informed public, the transactional nature of these donations is increasingly seen as corrupt, provoking debate into how the political and party funding systems should be reformed.
From left to right: Dr Lee Hwok Aun and Dr Wolfgang Sachsenröder (Credits: ISEAS – Yusof Ishak Institute)
Illustrating his talk with incisive political cartoons Dr Sachsenröder told of how money politics happens on many scales with parties adopting ‘creative solutions’ to financing from accepting individual bribes and internal party payouts to the pervasive links between public listed companies and government backed investment companies. The practice of “budget scalping” is prevalent across Southeast Asia, sometimes causing a loss of 30 – 40% of allocated funds. Even very recently, politicians have been embroiled in more elaborate and alarming cases of scalping of public funds. Infamous cases such as the 1MBD scandal in Malaysia, the 2014 Rudi Rubiandini bribe scandal and Setya Novanto scalping cases in Indonesia have drawn heavy criticism from the electorate. This leads to high suspicions among voters, with over 45% of the those surveyed seeing political parties as corrupt in a 2014 survey for the Malaysian Corruption Barometer. This percentage can only have increased since the latest revelations in the case against former Malaysian Prime Minister Najib who is facing several charges of corruption.
The audience during the seminar (Credits: ISEAS – Yusof Ishak Institute)
To reduce such cases of malfeasance, regulations and enforcement on party funding must be implemented. Dr Sachsenröder shared examples of regulations from other countries such as Germany which help to combat the problem. One such requirement is that political parties must submit yearly reports on income, expenditure and assets to parliament which are then published. This kind of regulation could be implemented in Malaysia, and while it does exist in Indonesia, its implementation needs to be strengthened. He also outlined the need to consider remodelling the sources of party financing to draw more from membership fees, and for public funding of parties to be increased.
Dr Sachsenröder has previously held tenures at ISEAS – Yusof Ishak Institute as a Visiting Fellow and Associate Fellow from 2009 to 2014.