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ANSWER SHEETS.

Q1. Decentralization refers to the transfer of power and responsibility from the central

government to regional or local governments. It aims to improve efficiency, effectiveness, and

responsiveness in service delivery and decision-making. Decentralization can take different

forms, including deconcentration, devolution, and representative local government.

Deconcentration involves the transfer of administrative and decision-making functions from the

central government to its regional or local offices. Devolution, on the other hand, transfers

political, administrative, and fiscal powers to elected sub-national governments. Representative

local government involves the establishment of democratic local councils that are elected by the

people to make decisions on their behalf.

Many developing or emerging nations operate a system of deconcentrated administration,

which is mainly characterized by bureaucratic control and centralization. In such a system,

regional or local officials are appointed by the central government, and their decisions are

subject to approval by higher authorities. While deconcentration has some advantages, it has

limitations in terms of democratic representation and accountability.

Adding a system of representative local government to deconcentration can address some

of these limitations. Representative local government can provide a democratic voice to local

communities and promote accountability and transparency in decision-making. Local councils

can also mobilize local resources and respond to local needs more effectively than centralized

bureaucracies. This can enhance public participation, improve service delivery, and promote

development at the local level.

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Malaysia is an example of a country that has undergone significant decentralization

reforms, including the establishment of representative local government. In 1976, the

government introduced the Local Government Act, which provided for the creation of local

councils that are elected by the people. Since then, local government has played a critical role in

service delivery and community development in Malaysia. The local councils have been able to

mobilize local resources, respond to local needs, and promote public participation in decision-

making.

However, Malaysia's decentralization process has not been without challenges. Some

scholars argue that the central government still retains significant power and control over local

government, limiting its autonomy and effectiveness (Abdul Rahman Embong, 2017). In

addition, there are concerns about the capacity and resources of local councils to deliver services

and promote development effectively (Wan Mohd Nor Wan Daud et al., 2019). These challenges

highlight the importance of ongoing efforts to strengthen local government in Malaysia and other

developing countries.

In conclusion, adding a system of representative local government to deconcentration can

enhance democratic representation, accountability, and local development. Malaysia's experience

shows that such a system can be effective in improving service delivery and promoting

community participation. However, there are still challenges to be addressed, including ensuring

local government autonomy and capacity building. Overall, decentralization should be viewed as

a continuous process of improving governance and public service delivery.

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Q2. Local government is an essential component of any country's administrative system, and

it is responsible for providing services at the grassroots level. The primary purpose of local

government is to facilitate grassroots development by ensuring that basic services such as

healthcare, education, infrastructure, and social amenities are provided to the local community.

In Malaysia, the local government system is made up of two tiers, namely, the Local Authorities

(LAs) and the Local Councils (LCs). The LAs are responsible for urban areas, while the LCs are

responsible for rural areas (Hashim, 2014).

This essay seeks to examine the extent to which local governments in Malaysia have

played their role efficiently and effectively in servicing their local community. It will first

provide a brief overview of the local government system in Malaysia. Then, it will discuss the

challenges faced by local governments in Malaysia in fulfilling their role in facilitating

grassroots development. Finally, it will evaluate the effectiveness and efficiency of local

governments in Malaysia in providing services to their local community.

Overview of the Local Government System in Malaysia

The local government system in Malaysia is made up of two tiers, the Local Authorities

(LAs), and the Local Councils (LCs). The LAs are responsible for urban areas, while the LCs are

responsible for rural areas. The LAs are further divided into three categories, namely, City

Councils, Municipal Councils, and District Councils. The LCs, on the other hand, are divided

into three categories, namely, Land Development Boards, Land Offices, and District Offices

(Hashim, 2014).

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The LAs and LCs are responsible for providing various services, including waste

management, public transportation, environmental management, social services, and

infrastructure development. However, the extent to which these services are provided efficiently

and effectively varies from one local government to another.

Challenges Faced by Local Governments in Malaysia

Local governments in Malaysia face several challenges in fulfilling their role in

facilitating grassroots development. These challenges include inadequate funding, lack of human

resources, weak institutional capacity, and limited autonomy (Khalid & Rahman, 2015).

Inadequate Funding: Local governments in Malaysia rely heavily on central

government funding to provide services to their local communities. However, the amount of

funding allocated to local governments is often insufficient, and this makes it difficult for local

governments to provide adequate services to their communities.

Lack of Human Resources: Local governments in Malaysia often face a shortage of

skilled personnel to manage and implement development projects. This shortage of human

resources makes it difficult for local governments to provide quality services to their local

communities.

Weak Institutional Capacity: Local governments in Malaysia often lack the institutional

capacity to manage and implement development projects effectively. This weakness in

institutional capacity is often due to the lack of skilled personnel and inadequate funding.

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Limited Autonomy: Local governments in Malaysia often have limited autonomy, and this

makes it difficult for them to make decisions and implement development projects effectively.

The central government often controls the budget and decision-making process, limiting the

autonomy of local governments.

Evaluation of the Effectiveness and Efficiency of Local Governments in Malaysia

Despite the challenges faced by local governments in Malaysia, there have been some

positive developments in the provision of services to the local community. For example, the

implementation of the Local Agenda 21 (LA21) in Malaysia has helped to enhance the

effectiveness and efficiency of local governments in providing services to their communities

(Hashim, 2014).

The LA21 is a global action plan that aims to promote sustainable development at the

local level. In Malaysia, the LA21 has been implemented by local governments to improve the

quality of life of the local community by promoting sustainable development. Through the

implementation of the LA21, local governments have been able to engage with the local

community, identify their needs, and develop strategies to address these

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Q3.

One key way in which citizen participation can improve decision-making is by increasing

transparency and accountability. By involving citizens in decision-making processes, local

authorities can demonstrate that they are accountable to the public, and that they are committed

to making decisions that reflect the needs and concerns of the community. This can help to build

trust between citizens and local authorities, and can encourage greater participation in local

decision-making processes (Gan, 2013).

Another way in which citizen participation can improve decision-making is by bringing a

wider range of perspectives and ideas to the table. By involving citizens in decision-making

processes, local authorities can tap into the knowledge, expertise, and experience of the

community. This can help to identify issues and solutions that may not have been considered

otherwise, and can help to ensure that local decisions are more inclusive and representative of the

community (Abdullah & Lee, 2012).

Participatory budgeting is one example of how citizen participation can improve

decision-making in Malaysia. Participatory budgeting involves citizens in the decision-making

process for how public funds are spent. Through participatory budgeting, citizens are able to

identify and prioritize local projects, and allocate public funds accordingly. This can help to

ensure that public funds are spent in a way that reflects the needs and priorities of the

community, and can help to promote greater transparency and accountability in local decision-

making processes (Mohamed, 2017).

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Community-based planning is another example of how citizen participation can improve

decision-making in Malaysia. Community-based planning involves citizens in the development

of local development plans, and allows them to have a say in how their neighborhoods are

developed. This approach has been used in Malaysia to develop community development plans,

which involve citizens in identifying local issues and developing solutions to address them. This

can help to ensure that local development plans are more inclusive and representative of the

community, and can help to ensure that local development is aligned with the needs and

priorities of the community (Abdullah & Lee, 2012).

In conclusion, citizen participation can play a vital role in improving the decision-making

process of local authorities in Malaysia. By involving citizens in decision-making processes,

local authorities can promote greater transparency and accountability, bring a wider range of

perspectives and ideas to the table, and ensure that local decisions are more inclusive and

representative of the community. This can help to build trust between citizens and local

authorities, and can promote greater participation in local decision-making processes.

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Q4.

a). Local government finance is always a challenge due to various reasons, including the

increasing demand for public services, limited resources, and the ever-changing economic

environment. In the Malaysian context, there are several principles that local governments can

follow to manage their finances effectively. In this answer, I will discuss and examine five

principles in local government finance in the Malaysian.

Prudent Financial Management

Prudent financial management involves ensuring that local governments use their

resources efficiently and effectively while minimizing waste and avoiding unnecessary

expenditures. This principle is essential in local government finance because it helps to ensure

that resources are used for the intended purposes and that taxpayers' money is not wasted.

In the Malaysian context, prudent financial management is one of the fundamental

principles of local government finance. The Federal Constitution of Malaysia provides for

financial prudence in the management of public funds (Government of Malaysia, 1957). Local

governments are also required to comply with financial regulations and guidelines set by the

Ministry of Finance and the Auditor General's Office (Local Government Act, 1976).

Revenue Generation

Local governments require adequate resources to provide essential public services to the

community. Revenue generation is, therefore, a critical principle in local government finance.

Local governments can generate revenue through various means, such as property taxes, fees,

and charges, grants, and subsidies from the federal and state governments.

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In Malaysia, local governments generate revenue primarily through property taxes,

licenses, permits, and service charges (Musa, 2020). Revenue generated from these sources is

used to finance public services such as waste management, street lighting, and the maintenance

of public infrastructure.

Fiscal Responsibility

Fiscal responsibility involves ensuring that local governments operate within their means

and avoid excessive borrowing. This principle is crucial in local government finance because it

helps to ensure that local governments do not incur debts that they cannot repay, thereby

avoiding financial crises.

In Malaysia, local governments are required to operate within their means and avoid

excessive borrowing. Local governments are also required to prepare and submit annual budgets

to the Ministry of Finance for approval (Local Government Act, 1976). The budgets must be

balanced, and local governments are not allowed to spend more than their revenue.

Accountability and Transparency

Accountability and transparency are critical principles in local government finance

because they ensure that local governments are accountable to their stakeholders, including

taxpayers, and that financial transactions are conducted openly and transparently.

In Malaysia, local governments are required to maintain accurate financial records and

submit financial statements to the Auditor General's Office (Local Government Act, 1976). The

financial statements must be audited and presented to the local council and the state assembly.

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Participatory Budgeting

Participatory budgeting involves involving the community in the budgeting process to

ensure that public services are delivered according to the needs and preferences of the

community. This principle is essential in local government finance because it promotes

community participation and engagement in local government decision-making.

In Malaysia, some local governments have adopted participatory budgeting as a means of

engaging the community in the budgeting process. For example, the Seberang Perai Municipal

Council in Penang has implemented participatory budgeting since 2016, enabling residents to

propose and prioritize projects for funding (The Star, 2019).

In conclusion, local government finance in the Malaysian context is guided by several

principles, including prudent financial management, revenue generation, fiscal responsibility,

accountability and transparency, and participatory budgeting. These principles are crucial in

ensuring that local governments manage their finances effectively and deliver public services

efficiently. Local governments that adhere to these principles are likely to earn the trust and

support of their stakeholders, including taxpayers and the community at large.

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b). There are various sources of income that local governments, i.e: Malaysia, can explore to

supplement their existing revenue streams.

Tourism tax

Tourism is a significant contributor to the Malaysian economy. Local governments can

impose a tourism tax on visitors to their areas to generate additional revenue. The tax could be a

percentage of the room rate for hotels, resorts, and other accommodation facilities within the

local government's jurisdiction.

Evaluation: This source of income has already been implemented by the federal

government. Therefore, it could be easily adopted by local governments. However, the

imposition of a tourism tax may affect the competitiveness of local tourism industries, which

may discourage visitors from visiting the area.

Rental of public spaces

Local governments own and manage various public spaces such as parks, sports

complexes, and community halls. These spaces could be rented out to businesses or individuals

for events, functions, or commercial purposes, generating revenue for the local government.

Evaluation: This source of income is already in use in many local governments in Malaysia. It is

a relatively low-cost way of generating additional revenue, and it can be easily implemented.

However, the local government must ensure that the rental of public spaces does not interfere

with the community's access to these spaces.

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Advertising

Local governments can sell advertising space on public amenities such as bus stops,

public benches, and street lamps. This would generate additional revenue while providing a

platform for local businesses to advertise their products and services.

Evaluation: This source of income is also already in use in some local governments in Malaysia.

It is a low-cost way of generating revenue, but it could lead to the over-commercialization of

public spaces, which could affect the quality of life of the community.

Public-private partnerships (PPPs)

Local governments can enter into partnerships with private companies to develop and

manage public facilities such as markets, parking lots, and public transport services. The private

company would be responsible for the investment, operation, and maintenance of the facility,

and the local government would receive a share of the revenue generated.

Evaluation: PPPs can be an effective way of generating additional revenue while improving the

quality and efficiency of public services. However, the local government must ensure that the

private company complies with relevant regulations and that the community's interests are

protected.

Green bonds

Green bonds are a relatively new financing mechanism that allows investors to finance

environmentally friendly projects such as renewable energy, waste management, and sustainable

transport. Local governments can issue green bonds to finance projects that benefit the

environment and generate revenue.

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Evaluation: Green bonds are a promising new source of income that aligns with the

government's commitment to sustainable development. However, local governments must ensure

that the projects financed by green bonds are well-planned, adequately monitored, and

transparently reported.

In conclusion, local governments in Malaysia have various options for generating

additional revenue. However, the local government must carefully consider the benefits and

potential risks of each option and ensure that the revenue generated is used effectively and

efficiently to benefit the community.

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REFERENCES

Abdul Rahman Embong. (2017). Decentralization, governance and development in Malaysia:

The policy and practice. International Journal of Social Science and Humanity, 7(6), 355-361.

Abdullah, S. A., & Lee, Y. Y. (2012). Community-based planning in Malaysia: Practices and

prospects. Habitat International, 36(2), 271-277. doi: 10.1016/j.habitatint.2011.10.008

Gan, C. (2013). Citizen participation in local government decision-making in Malaysia. Cities,

31, 272-278. doi: 10.1016/j.cities.2012.07.010

Government of Malaysia. (1957). Federal Constitution. Retrieved from http://www.agc.gov

Hashim, R. (2014). Local Agenda 21 in Malaysia: Issues and Challenges. Journal of

Sustainability Science and Management, 9(2), 43-54.

Khalid, K. S., & Rahman, M. F. A. (2015). Local government autonomy in Malaysia: Issues and

challenges. Journal of Public Administration and Governance, 5(1), 97-116.

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Mohamed, N. A. (2017). Participatory budgeting in Malaysia: Experience, challenges and

prospects. International Journal of Social Science and Humanity, 7(4), 255-258. doi:

10.18178/ijssh.2017.v7.791

Ministry of Housing and Local Government. (2019). Local Government in Malaysia. Retrieved

from http://www.kpkt.gov.my/en/node/452

United Nations. (n.d.). Local Agenda 21. Retrieved from

https://sustainabledevelopment.un.org/content/documents/Agenda21.pdf

Wan Mohd Nor Wan Daud, Ahmad Rizal Mohd Yusof, Azizan Marzuki, & Khairul Hafiz Rosli.

(2019). Challenges and prospects of local government in Malaysia. International Journal of

Recent Technology and Engineering, 8(2S2), 501-508.

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