The consultant conundrum

THERE is often criticism of how governments, including ours, use big-name consultant firms to conceive major plans.

These firms create wonderful plans, get paid a lot of money, but are not responsible for executing those plans. There are many plans that fail to achieve their intended outcomes, but who is taking responsibility?

Civil servants are literally outsourcing their roles to these consultants, and the worst part is, they blame the consultants when things go wrong.

This problem is not specific to Malaysia but a global trend. One hard-hitting exposé exemplifies the practice in a book aptly named “The Big Con: How the Consulting Industry Weakens our Businesses, Infantilises our Governments and Warps our Economies”.

The book is a must-read for Malaysia’s unity government and those who want to address this issue of over-reliance on consultant firms. Much research went into writing the book with all the big consultant firms named and examples of governments which have spent too much money on the former.

The book posits that government reliance on consultant companies has greatly enriched the latter while undermining the capacities and capabilities of governments and retards innovation.

The authors claim that the over-reliance has led to issues of bad governance and stifling economic growth. The book argues that governments rarely get the expertise they seek, or a good second opinion of what they are proposing to do.

In Malaysia, it was disclosed in 2013 that the then government had spent a whopping RM7.2bil to hire private consultant firms since 2009, clearly an eye-popping figure. But what did Malaysia really get out of that?

The good news is that the current unity government, under the leadership of Datuk Seri Anwar Ibrahim, has sought to stem unnecessary spending on consultant firms. It is even cancelling contracts handed to the private sector that it can handle itself.

Also, this is probably why the government has assigned Mimos Berhad the task of spearheading the National Digital Identity (IDN) project. It remains to be seen how much Mimos will outsource to third parties and consultants, who must no doubt be racing to Mimos to win parts of the project.

Furthermore, consultants are still active, helping the government develop new economic policies. To be fair, Malaysia had used expert consultants in the early days with largely positive outcomes.

Let’s take the case of oil and gas resources. Malaysia first discovered oil over a century ago in 1910 in Miri with the help of oil giant Shell.

In those days, foreign experts didn’t write bills in billions of ringgit. Engineers and consultants adhered strictly to their time sheets.

The early involvement of Shell also led to numerous production sharing contracts (PSCs) which until today bring in much revenue for Malaysia.

Consultants are still working for the Malaysian government today. A good example is the National Energy Transition Roadmap developed with the help of Boston Consulting. The New Industrial Master Plan 2030 was also likely drafted with the help of consultants.

All government-related agencies should disclose what projects they hire consultants for, and how much they pay them. It would be even better if the expected outcomes were also disclosed.

Through such transparency - a key theme of the current government - the public will be able to judge if such funds are being spent wisely. All and sundry can then judge the results.

Certain situations clearly require expert assistance. The question is how much will it cost and what will be the return on investment for the rakyat?

This article first appeared in Star Biz7 weekly edition.