eBusiness Weekly
Clive Mphambela
“The challenge for governments across the world is to efficiently and effectively turn political ambitions into policy; policy into practice; and the engagement of front line public service professionals into results for and with citizens.” World Bank (2014)
“People may deliver what you expect. People will deliver what you inspect.” Dato’ Sri Idris Jala, CEO, PEMANDU.
The above two quotes virtually sum up what is in fact a perennial challenge for many countries, Zimbabwe included. We have no shortage of good ideas, excellently crafted economic programmes and great strategies, but we have usually faltered on the implementation front.
Whilst this in itself is not a comfort, Zimbabwe is, however, not alone in that boat. As the above statement in the World Bank Report 2014 points out, it is often very difficult to turn well meaning politics into practical policy.
The CEO of Malaysia famous Performance Delivery Unit, aptly points out that the institutional framework for monitoring programme implementation can be far more important than the actual design of the programme itself.
Delivering on policy promises is very often derailed by implementation challenges. Delivering on the expectations of citizen hinges critically on the implementation capabilities of the State. While there is no question that good policies are necessary for achieving development outcomes, there is increasing recognition and acceptance by economists that good policies by themselves are not sufficient to deliver economic and social outcomes. Good policies need to be “effectively implemented”.
The challenges for governments of enhancing implementation capability continue to receive a great deal of attention from policy makers, the international development community, and academic researchers.
However, there are no ready-made solutions. Different countries around the world are now exploring innovative ways in which to enhance the quality of policy implementation.
To address this challenge, a sizeable number of countries have introduced what are now known as performance delivery units (DUs) to tackle the pressing programme implementation challenges that governments face in their efforts at responding in a better way to their citizens’ needs and attempts to deliver on key policy priorities.
One such unit that stands out is Malaysia’s Performance Management and Delivery Unit (PEMANDU) introduced on 28 January 2010 by the Malaysian Prime Minister Najib Tun Razak. The programme was intricately tied to Malaysia’s Vision 2030, which was aimed at turning the country into a developed and high-income nation by 2030.
As an institutional innovation, the Performance Management and Delivery Unit
(PEMANDU), was established for making, monitoring and revising Malaysia’s ambitious plans for reform which involved multilevel coordination between public and private actors and also among various government and quaisi government entities. PEMANDU enhanced Malaysia’s institutional capabilities which were turn-key to implementing its new industrialisation policies and improving the overall performance of the government.
PEMANDU offered the Malaysians, a change management framework for designing and implementing economic and social programmes in a manner would allow for flexible and continuous process for adjusting plans to unforeseen circumstances, while holding all decision makers accountable.
Whilst PEMANDU originated in Malaysia, the methodology has been adopted in various forms in countries such as Tanzania, India, and South Africa as a possible means to renovate governance and deliver economic growth and social transformation.
From inception, PEMANDU has helped in the robust design, facilitation and implementation of the Malaysian National Transformation Program (NTP), which was basically a set of very high-level strategic priorities of the Malaysian government, which were broken down into smaller but very concrete interventions.
The NTP was implemented by individual government ministries, departments, and agencies (MDAs), while PEMANDU helped to track the implementation process monitor, and de-bottleneck the process.
It is not surprising that PEMANDU became the largest and one of the most prominent DUs in the world, with many countries looking to learn from its experience.
The Historical underpinnings of PEMANDU are rooted in developments that have taken place since the country’s independence in 1957, whence the country has been governed by Barisan Nasional. The party’s fourth Prime Minister, Tun Mahathir Mohamad, who led Malaysia for two decades, from 1981 to 2003, undertook an ambitious range of industrial-policy initiatives.
The two most prominent ones were focused on the attraction of foreign direct investment (FDI) in export oriented manufacturing, especially the development of a large electronics capability pole in the
Penang region, and in Malaysia’s efforts to develop “national champions” in mass manufacturing and heavy industry, notably in the steel and automotive industries, which saw the birth of the Proton car company.
The country’s foray into electronics was far more successful than its efforts in the steel sector as the industry’s inability to move up the value chain from automobile assembly severely hobbled the development of this sector in the late 1990s and early 2000s, amid the emergence of China.
However, the seeds of PEMANDU had been planted and fertile ground for its success had been prepared. Central to the later success of PEMANDU was the fact that in the pursuit of his industrial policy and other programmes, Mahathir heavily centralised decision-making, relaxed the grip of the civil service on policy, but successfully managed to help the government to build extensive links with and among the private sector. He termed this strategy “Malaysia Inc.,” and he was its undisputed chairman.
However, critics argue that at worst, it is these links became sources of damaging capture of the state by corporate enterprise. However, on the positive side, at least on the margins, the capacity of private-sector organisations to self-organise and engage in policy dialogue with government officials was significantly strengthened, creating the strong foundations for the public-private interchange, that would later underpin the success of PEMANDU.
Malaysia’s experience with PEMANDU is thus best understood in the context of the country’s broader development journey and public sector performance culture. Malaysia’s public sector development, which pre-dates PEMANDU, has created an enabling environment that set the stage for PEMANDU.
Since the country’s independence in 1957, Malaysia’s public sector focused on solving development challenges facing the newly-independent country, including providing services to eradicate poverty and build up infrastructure to enable the diversified growth of its economy.
The focus has been on results from the very beginning. This performance orientation created elements of a performance culture. As the public sector developed, it also gave rise to an institutional ecosystem for performance management and it is these elements provided the foundations on which PEMANDU could build.
PEMANDU’s effectiveness in driving performance emanates from its design features and methodology, as well as how the unit worked with service delivery agencies and outside stakeholders.
For example, the concept of “Labs”, a unique signature of the PEMANDU innovation, broadened ownership of the National Transformation Process amongst a wide spectrum of stakeholders with diverse interests.
Through a rigorous monitoring and reporting process of key performance indicators (KPIs), acceptable incentives to drive delivery of results were created at all levels. PEMANDU also managed to attract the best talent from the private sector, which was infused into the public sector with the result that innovative zeal and drive was enhanced.
The process by which PEMANDU established goals in its first year or two have been studied at great length by researchers and scholars.
The system ensures that programs are formally divided into “national key economic areas” (NKEAs) and “strategic reform initiatives” (SRIs). In development economics parlance, these can be translated simply to read “vertical” initiatives, focusing on specific industries or areas, and “horizontal” initiatives, focusing on cross-cutting reforms.
The NKEAs were chosen for their potential contribution to the Gross National Income-GNI targets. A mix of global and national average growth rates for each sector of the economy was applied to its then-existing GNI, aiming to arrive at a possible aggregate-income contribution. The sectors were then vertically ranked according to their level of contribution, with the largest eleven being chosen, plus the geographic area of Greater Kuala Lumpur (GKL), for a total of 12 NKEAs. This process naturally led to the selection of a mix of the large sectors dominating Malaysia’s economy, and smaller or mediumsized ones that had posted strong growth in Malaysia itself or globally. The large sectors included, in particular, “the big three” of palm oil, oil and gas, and electronics, which together account for 64 percent of Malaysia’s exports, 28 percent of its GNI and 9 percent of employment. The smaller or medium-sized sectors ranged from tourism to healthcare.
The list was rounded out by essential services, namely wholesale, retail and financial services. Each NKEA was then scrutinized in a process of sustained stakeholder engagement, to validate their targets and to break them down into “entry point projects” (EPPs).
The central step in this process was convening “Labs”—one for each NKEA. In a full-scale Lab, a dozen or more key stakeholders are assigned full-time for nine weeks to collectively devise an action plan to realize the NKEA goal. Labs are designed to be non-hierarchical, anchored by quantitative analysis, and stubbornly focused on the pursuit of solutions. As PEMANDU officials sometimes put it, “You are locked in a room, and you don’t come out until everyone agrees on a plan with quantified targets.”
Managing such a process is a complex craft and failure is costly. Because of the technical demands and high stakes in the first few years, the Labs were facilitated by top-end independent management consultants, and they required substantial financial budget that could only be committed by waiving standard public-procurement rules. Today PEMANDU has internalized its capacity so that most of its teams are capable of running Labs of varying formats themselves.
The writer is an economist. The views expressed in this article are his personal opinions and should in no way be interpreted to represent the views of any organizations that the writer is associated with.
