It needs to keep them happy so that they will vote for the ruling party in the next general election. This will mean retaining the 1.6 million civil servants, with payouts and bonuses.
The danger is that if the government, as Prime Minister Najib Razak has said he would do, retains the civil servants and does not cut back on the numbers, the nation will incur greater domestic and foreign debt.
Second Finance Minister Johari Abdul Ghani had said in February that the government burden in paying civil servants had increased from RM22 billion in 2003 to RM74 billion in 2016. In 2003, the pension of civil servants was RM5.9 billion, but it soared to RM19 billion in 2016.
Johari said that in the years to come the amount would continue to increase and the government’s income would gradually decline.
The report claimed government coffers were fast diminishing, giving as example the missed payment of US$650 million to the International Petroleum Investment Co (IPIC) by state investment fund 1MDB on July 31.
It said Najib could borrow from local banks to tide him over, but if he were to do that it would have the effect of “crowding out” other genuine borrowers, and the interest rate would spike.
This will lead to a vicious cycle in the economy and prompt living costs to rise.
The SCMP report said one of the reasons Malaysia was stuck in the middle income trap was the massive size of its civil service.
While such a large service had the effect of buttressing the government, and making Malaysia more stable, it also hampered efforts to transform the government, making Malaysia more stagnant, said the report.
It warned that if the civil service was not reduced, it might result in a government financial meltdown.
Najib, the SCMP report said, was caught in a trap, as reducing the size of the civil service would reduce his chances of winning the general election. Especially so, the report added, as 90% of civil servants were Malay.
That explains why Najib has taken to reassuring the civil service not to worry about any reduction in headcount. The problem has been passed down to future leaderships to tackle.
Malaysia has one of the largest civil services in the world. Johari had said in February that the ratio was one civil servant to 19.37 people based on the country’s current population of 31 million people,
In comparison, the proportion of civil servants to the national population in other countries such as Singapore is 1 to 71.4 people; Indonesia 1:110; Korea 1:50, China 1:108, Japan 1:28, Russia 1:84 and United Kingdom 1:118, according to a recent survey.
The SCMP noted that even though opposition parties, such as the DAP, had voiced concern over the size of the civil service, not even they were prepared to address the issue head on.
This is because they, too, are scared of losing votes, especially in the current situation where both the Barisan Nasional and opposition parties need the votes of the Malays.
The report quoted DAP strategist Liew Ching Tong as saying that if the Malay votes were to dip by 15%, the opposition would gain another 34 seats in parliament. This would immediately deny Najib a simple majority of 112 seats.
The report said, there were tell tale signs that the civil service might back the opposition in GE14. In support of this, it said leaks against the Najib government have turned from a trickle to a torrent over the last five years.