Formulation and Enhancement of
the Development Administration System in East Asia:
—Thailand, Malaysia and the Philippines—
Thailand, Malaysia, and the Philippines have different ways of organizing development
administration, and therefore leadership style, institutional design and coordination features are
diverse among these countries. Figure 1 shows the major characteristics of development
administration in three countries including the relationship between top leadership and
technocrats, and the relationship between the executive and legislative branches.
Figure 1: Major Characteristics of Development Administration in Thailand, Malaysia and the Philippines
Support to realize
leader’s vision
Delegate authority
Centralized
system
Leader
Centralized
system
Legislature
Leader
L
Leader
Executive
branch
Intervention
Technocrats
(Central Economic
Agencies)
e
Technocrats
(Central Economic
Agencies)
Technocrats
(Central Economic
Agencies)
a
Ministries,
departments, other
state organs and
local governments
d
er
Ministries,
departments, other
state organs and
local governments
<Thailand>
Especially in 1980s
“Bureaucratic polity”
<Malaysia>
“Top-down” development
administration
Centralized system managed
by elite technocrats who were
delegated
authority
from
political leaders
Centralized system led by
political leaders and supported
by elite technocrats to realize
leaders’ vision
Ministries,
departments, other
state organs and
local governments
<The Philippines>
Especially after 1986
“Dual track” development
administration
Dual system administered
by executive branch but
challenged by legislative
intervention
Source: Author
Figure 2 shows the chronological outline of the development plans and political leaders of
Thailand, Malaysia, and the Philippines.
In Thailand, political administrations have not always been stable. Prime Ministers often
changed especially during the 1970s via military coups. However, even with frequent changes
in political administrations, the five-year national development plans have been prepared and
maintained. Under the “bureaucratic polity” (see below), technocrats have maintained
1
development policy despite political leaders come and go.
In Malaysia, five Prime Ministers took up their positions since independence from the UK in
1957. Political administrations have been stable by and large, and their changes, in general,
took place in a smooth manner. Malaysian government consistently prepared and enforced
five-year national development plans (the Malaysia Plans). In addition to the Malaysia Plans,
the government prepared long-term development plans (Outline Perspective Plans: 10 to 20
years). The New Economic Policy (NEP) -- regarded as Malaysia’s “master policy” -- was
prepared in 1971 to address issues seen to be at the root of the 1969 ethnic riot. The National
Development Policy and National Vision Policy basically succeeded the NEP and upheld its
underlying objectives.
In the Philippines, the commonly recognized “turning point” of development administration
took place in 1986. Corazon Aquino put an end to Marcos’s dictatorship and initiated a
democratization process. One notable feature of development planning in the Philippines is
that six-year national development plans are prepared newly with each change of political
administration. Hence the development plans has overlapped -- every time government
changed, policy also changed -- meaning that securing policy consistency and policy
predictability has been a challenge for the country.
2
Figure 2: Chronological Outline of the Development Plans and Political Leaders of Thailand, Malaysia, and the Philippines
Thailand
Prime Ministers
Kukrit
Plaek
PoteThanom
Sarit
NEB
NEDB
↓
↓
Thanom
Suchinda
Sanya
Seni Seni TaninKriangsak
Prem
Chavalit Chuan
Chatchai AnandAnandChuan Banharn
Thaksin
Abhisit
NESDB
↓
50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
National Economic Development Plans NEDP 1
National Economic and Social Development Plans
NEDP 2
NESDP 3
NESDP 4
NESDP 5
NESDP 6
NESDP 7
NESDP 8
NESDP 9
NESDP 10
Malaysia
Prime Ministers
Tunku Abdul Rahman
Tun Abdul Razak Hussein Onn
EPU
Independence(Malaya) Malaysia
↓
↓
Dato' Seri Dr. Mahathir Mohamad
Dato' Seri Abdullah
Ahmad Badawi
Mohd Najib bin
Tun Haji Abdul Razak
ICU
riot
↓
↓
↓
57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
1
2
Malaya Plans
Malaysia Plans
Outline Perspective Plans
National Policies
Other National Development Policues
MP 1
MP 2
MP 3
MP 4
MP 5
MP 6
MP 7
MP 8
MP 9
OPP 1
OPP 2
OPP 3
National Development Policy National Vision Policy
New Economic Policy
↑
Look East Policy
↑
Malaysia Incorporated
↑
Industrial Master Plan
↑
Vision 2020
Philippines
Presidents
Carlos Garcia
Diosdado Macapagal
NEC
PIA
PES
↓
↓
↓
35 …… 57 58 59 60 61 62 63 64 65 66 67
Medium-Term Philippine Development Plans
Ferdinand Marcos
Corazon Aquino Fidel Ramos J. Estrada Gloria Macapagal Arroyo
NEDA
Marshall Law
↓
68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 01 02 03 04 05 06 07 08 09 10
Source: Author
3
1.
Major characteristics of development administration in three East Asian countries
1-1. Thailand
Until the 1990s, the principal driving force behind Thailand’s economic and social development
planning, as well as its institution building, emerged from within the bureaucracy, rather than
political leaders. In fact, political leaders delegated authority to the bureaucracy to plan and
administer policies. Hence, Thailand’s policy formulation and implementation processes are
characterized by the outstanding effect that the bureaucratic polity has on them. The
concentration of elite technocrats in central economic agencies, where they handle policy
formulation and macroeconomic management, resulted in a highly centralized bureaucracy.
Technocrats have been insulated from political interventions and have been able to exercise
substantive power. This has enabled the government to maintain coherent economic policies,
even when the political environment was volatile during the 1970s. Furthermore, a sweeping
sense of political and economic urgency, which snowballed to its peak in the 1980s, in regard to
issues of national security and development, financial circumstance, and industrial strategies
served to reinforce the perceived need for the bureaucratic polity. Though the tumult, Thailand
steadfastly remained determined to move ahead with economic development, and this validated
the public’s support for the role of technocrats in initiating and executing policy and programs
as they deemed fit.
For decades, economic and social development planning in Thailand has utilized the subtle
ability of central economic agencies to check and balance each other; these agencies are: the
National Economic and Social Development Board (NESDB), the Bureau of Budget (BOB), the
Fiscal Policy Office (FPO) and the Public Debt Management Office (PDMO, established in
1999) of the Ministry of Finance (MOF), and the Bank of Thailand (BOT), and they have
together quite successfully maintained both prudence in macroeconomic management, and
relatively strict discipline in fiscal and monetary matters. The stable and predictable
macroeconomic environment has contributed to promoting the activities of the private sector.
Each of these agencies duly exercises authority over operations within their assigned field in
regard to planning, programming, and budgeting, and no singular organization has been created
to oversee the structural whole. None the less, an umbrella network for sharing information on
priority policy issues and important macroeconomic data has been put in place to facilitate their
operations. Therein, links allowing for workable coordination of the NESDB, BOB, FPO,
PDMO and BOT have been built in, expressly for the expedition of important decisions in times
of need.
1-2. Malaysia
Since gaining its independence in 1957, the strong political will and integrity of each successive
leader of Malaysia (Malaya until 1963) has driven a national devotion to itself to development
planning and institution building. Hence, it is the top political leaders that have served as the
driving force of development management and institution building efforts (“top-down”
development administration). All of Malaysia’s prime ministers have possessed sound vision,
a strong sense of commitment and dedication to ensuring success in development initiatives for
4
the sake of the public’s best interests. The Malaysian bureaucracy was supportive of initiatives
set forth by political leaders and obligingly engaged itself at multiple levels to make these
visions a reality. A strong shared sense of urgency over wanting to establish a united
Malaysian nation -- a country of peoples ethnically integrated and living in harmony and
partnership -- reinforced the public’s ability to accept the role of technocrats in bringing this
overriding policy objective to fruition.
Since its establishment in 1961, the Economic Planning Unit (EPU) has acted as the central
agency for economic and social development planning and coordination. It is also the deciding
authority on critical issues surrounding economic activities, including those affecting
investment selection and development budgeting. The EPU plans, coordinates and monitors
development assistance both coming in from abroad (e.g. loans and technical assistance) and
going out to countries abroad (e.g. technical assistance). Thus, the EPU’s role as an institution
is a powerful one -- it functions as the super-ministry. The EPU ensures coordination with
other central ministries, federal agencies (i.e. national line agencies), state government offices
and the private sector by functioning as the secretariat for various interagency councils,
committees, sub-committees and groups. In this way, the EPU enjoys a position as the
operational control center, simultaneously both ‘top-down’ and ‘bottom-up’ in approach, of
planning process and economic sector activities. The Ministry of Finance (MOF) manages
public finance and is responsible for formulation and implementation of the budget in close
coordination with the EPU. The Central Bank (Bank Negara) focuses on monetary and
financial matters. Regardless of changes to political administrations over time, the basic
foundation for planning and coordination has been steadfastly both utilized and maintained to
this day. Malaysia has inherited such strong central control from the colonial administration.
1-3. The Philippines
The main feature of development planning and administration in the Philippines is its “dual
track” nature. Particularly since the late 1980s, technocrats have been consistently worked to
bring about institutional reform that would strengthen development planning and administration
and enable the efficient and effective delivery of public services, as represented in the
administrative channel.
On the other hand, legislators have been challenging this
administrative channel, especially when it comes to the budgeting process, and their interference
has led to allocative distortions (“legislative intervention”) and marginalization of the role of
technocrats. The fact that this sort of political intervention has been institutionalized in the
budget system markedly distinguishes the Philippines from Thailand and Malaysia.
Furthermore, room exists for ensuring policy coherence within the executive branch. Its
decision-making structures are highly dualistic and fragmented even among different
government agencies. Also, since the Philippines, upon the enactment of its Local
Government Code (LGC) in 1991, was one of the first countries in the region to decentralize,
the regional and local dimensions of development planning and administration have posed
unique challenges.
The basis for the current planning machinery was established in 1987 as part of administrative
reorganization in the post-Marcos era. The central agency for economic and social
development planning in the Philippines is the National Economic and Development Authority
5
(NEDA). The NEDA, consisting of the NEDA Board and the NEDA Secretariat, formulates
annual, medium and long-term economic and social development plans (both national and
regional), in addition to reviewing and programming investment projects, while also monitoring
and evaluating their implementation. The NEDA Board acts as a governing body that sets the
direction for the country’s dominant development policy, and the NEDA Secretariat serves as its
arm for research and technical support. Six cabinet-level interagency committees, all headed
by the President, assist the NEDA Board in accordance with its functions. Other oversight
agencies are the Department of Budget Management (DBM), the Department of Finance (DOF),
and the central bank which are the core members of cabinet-level inter-agency coordination
committees, however, their actual coordination needs further strengthening.
2.
Key factors affecting the formulation
administration in three East Asian countries
and
enhancement
of
development
As explained above, each of three East Asian countries has had diverse institutional framework
and coordination mechanism with key actors, including political leaders, technocrats and
legislators, playing different roles and having various relationships among them. Hence, we
see that there have been different configurations in development administration that would
affect the way how each country organize itself in pursuing its development goals -- procedures
and operations for development planning, investment programming and aid management would
vary substantially, giving different implications on policy coherence.
What are the key factors affecting the features of development administration? In author’s
view, among number of factors, there are five major ones:
(i)
Quality of leadership
-- whether the leadership has long-term development visions and political will;
(ii)
Alliance between leadership and technocrats
-- whether the technocrats have substantial role, authority and capacity to share and
realize the leaders’ visions;
(iii)
Degree of political intervention to the “executive branch”
-- whether and to what extent political intervention inhibits national development
objectives, policy coherence and undermines the executive efforts;
(iv)
Fear of external and domestic crises
-- whether the sense of political, social and economic urgency has become the driving
force to overcome the crises, and even turn them into opportunities for reforms and
institutional changes; and
(v)
Utilization of aid as integral part of development management
-- whether the government manages the entire development process and uses aid as its
integral part.
The general presumption is that the synergetic effect of a number of factors in a collective way
had more or less affected each country’s overall development administration. In addition,
uncontrollable external factors (both positive and negative) gave major impacts on development
administration. The important point to be noted is that the quality of leadership mattered
especially at the critical stages of development -- e.g., Prime Ministers Sarit and Prem in
6
Thailand and Prime Ministers Razak and Mahathir in Malaysia exercised strong and effective
leadership at the “turning points”. The author considers that leaders, as primary force of
change, set the directional character of other factors listed above.
The author will look into each factor concretely for three East Asian countries with a specific
attention to the formulation and enhancement of its development administration. Table 1
summarizes the dynamics of development administration, including the use of aid in
Thailand, Malaysia and the Philippines.
Table 1: Dynamics of Development Administration, including the Use of Aid for three East Asian countries
Thailand
Malaysia
Philippines
Formation
of  Late 50s-early 60s: with
 Late 50s-early 60s: with
 70s: centralized
donor advice (WB, US
donor advice (WB, US, UK
development administrative
development
etc), basic foundations
etc), basic foundations for
body (NEDA: National
administration
for coordination
planning and coordination
Economic and
mechanisms established
mechanisms established
Development Authority)
among central economic
and the Prime Minister’s
created in support of
agencies
Department strengthened
President Marcos’s
(British system adopted)
dictatorship
 After 86: NEDA
reorganized, and
inter-agency coordination
began through NEDA
inter-agency committees
Enhancement
 80s: national-level
 70s: new administrative
 90s: NEDA Board
committees and
machinery (especially ICU:
inter-agency committee
of development
sub-committees
Implementation
functions institutionalized,
administration
established to facilitate
Coordination Unit) added
and ODA management
coordination for priority
to secure enforcement of
strengthened, but
policy agenda (e.g., rural
the New Economic Policy
legislative intervention
development, regional
marginalizing such
 80s: coordination system
development, private
between public and private
executive efforts
sector participation)
sector strengthened
Source: Author
2-1. Thailand

Quality of leadership
<Prime Minister, Field Marshall Sarit Dhanarajata (1959-1963)>
Prime Minister Sarit clearly showed development vision and exercised strong leadership at the
initial stage of formulating Thailand’s development administration from late 1950s to early
1960s. With a strong support from Dr. Puey Ungphakorn (see below), Prime Minister Sarit
institutionalized basic foundations for coordination mechanisms among central economic
agencies to administer development policy and macroeconomic management. Prime Minister
Sarit also played a substantial role in the formation of “bureaucratic polity” where political
7
leaders delegated authority to elite technocrats in central economic agencies to exercise
substantive power in a centralized manner.
Prime Minister Sarit’s development vision to attain robust economic development, possessing
“development through growth” concept, has called for such institutional arrangements and
approaches to development administration. As he emphasized the importance of infrastructure
development for growth, which was duly stipulated in the first national development plan -- the
National Economic Development Plan (1961-1966) -- strong central economic agencies as well
as elite technocrats were imperative to exercise their roles as strategic core functions. The
“bureaucratic polity” serving as a foundation for Thailand’s development administration,
technocrats have been insulated from political interventions to a large extent thereafter. Hence,
Thai government has been able to maintain policy coherence despite frequent changes in
political leadership especially during the 1970s.
<Prime Minister, General Prem Tinsulanonda (1980–1988)>
Prime Minister Prem exercised consensus-oriented style of leadership and functioned effectively
as a balancing force himself. In the early 1980s, when Prime Minister Prem took up a post as a
political leader, Thailand was suffering from an economic recession, primarily caused by
changing international economic environment. Thai government was struggling to achieve
structural transformation in regarding to issues of national development, macroeconomic
management and industrial strategies to overcome the situation. Prime Minister Prem took the
initiative to create national level committees and sub-committees to deliberate and coordinate
priority policy issues at the national level -- e.g., rural development, regional development and
private sector participation. Such administrative framework was set up in a highly centralized
manner, led by the Prime Minister to exclusively pursue the policy objectives. In fact, Prime
Minister Prem himself served as chair of the committees and was known to attend every
meeting. The Eastern Seaboard Development Committee (ESDC) was one of the national
committees created during the Prem administration to pursue the Eastern Seaboard
Development Plan (ESDP), Thailand’s notable mega infrastructure projects. Just as for other
major national committees, Prime Minister Prem delegated authority to the NESDB as
secretariat for the ESDC, and the NESDB acted as a focal point in coordinating and
implementing the task. In other words, he deployed and utilized competent technocrats as his
“supporter” to pursue policy objectives. Under the complex circumstances where proponents
and opponents hotly debated over the plan, Prime Minister Prem functioned effectively as a
balancing force throughout the development process of the ESDP. He worked in close
coordination with technocrats for consensus building and created environment to come up with
pragmatic, reasonable solutions by insulating technocrats from political pressures as often as
possible.

Alliance between leadership and technocrats
From late 1950s to early 1960s when Prime Minister Sarit initiated formulating development
administration, Dr. Puey Ungphakorn, a British-trained economist and the former governor of
the Bank of Thailand (1959-1972), made a critical contribution. In line with Prime Minister
Sarit’s development vision, Dr. Ungphakorn created the basis for coordination among central
economic agencies that provided a foundation for the “bureaucratic polity”. He sent close
8
technocrat aides and allies to take up key positions within each agency, using them to facilitate
interagency coordination. Dr. Ungphakorn also set the basic tone for the country’s
macroeconomic management with financial conservatism and fiscal discipline, which is coming
out from a mechanism that encompass subtle ability of central economic agencies to check and
balance each other.
In the 1980s, under the Prem administration, central economic agencies including the NESDB
and the technocrats therein were delegated authorities from the Prime Minister to carry out
development policies and macroeconomic management as described above. Strong alliances
with trust existed between political leadership and competent technocrats who shared the
national development visions. The technocrats took deep pride in playing a significant role in
the country’s development process and fully utilized their knowledge with strong sense of
national responsibility to pursue their task.

Degree of political intervention to the “executive branch”
Under the “bureaucratic polity” where complement technocrats concentrated in central
economic agencies and handled development and investment planning as well as
macroeconomic management, technocrats have been insulated from political interventions to a
large extent. Hence, they have been able to exercise substantive power, keeping away from
political pressures, and came up with rational policy decisions. They conducted prudent
macroeconomic management in light of the country’s economic circumstances. As discussed,
Prime Minister Prem created an environment for technocrats to make pragmatic decisions based
on objective economic analysis in the process of the ESDP.

Fear of external and domestic crises
“Sense of urgency” for external and domestic crises prompted Thai government for reforms and
institutional changes. As mentioned, from late 1970s to 1980s, Thailand was going through
macroeconomic crisis and deep recession, and structural transformation was required to
overcome the difficult situations. Thailand was blessed with well-balanced, dedicated leader,
Prime Minister Prem, at this critical time of turning point. There were mainly three pressing
issues at the time:
1) Tension between national security and economic development intensified.
After the Vietnam War was over, the funding inflow to Thailand from the US decreased, and
conflict between the military and the government increased for resource allocations between
national security objectives and economic development. The government needed to meet the
funding requirements for priority issues for both objectives within the limited resources. In the
end, the Cabinet lifted the ceiling of national borrowing to settle the situation.
2) Transformation of industrial strategy from import substitution to a more export-oriented
approach to industrialization was necessary.
As in the case of deep recession in the early 1980s, Thai economy was highly susceptible to the
changing global economic environment because of its high dependence on primary products and
external finance. By transforming its industrial structures, the government strived for robust
economic development and attain big leap for economic growth.
3) Stringent macroeconomic management was indispensable in light of the country’s economic
9
situations.
Thai government borrowed from the WB twice, in the form of Structural Adjustment Lending in
1982 and 1983, as well as received Standby Credits from the IMF to overcome the tough
financial situation.

Utilization of aid as integral part of development management
Thai government managed the entire development process and used aid as its integral part. In
other words, Thai government considered foreign aid as supplementary and temporary resources
to fill the gaps for domestic finance as well as institutional and human capacity. Thailand has
strived to become self-sufficient, possessing an “exit plan”. The government carefully
scrutinized sectors and activities that are more appropriate to seek for foreign assistance rather
than to mobilize from domestic sources. In doing so, the government considered comparative
advantages of each donor and tried to match them with the country’s development needs and
requirements. While utilizing foreign aid, the government endeavored to generate its own
resources through private sector and foreign direct investment. In this respect, Thai
government has strategically and selectively utilized foreign aid toward “graduation”.
At the initial stages of formulating development administration in the 1950s, Thai government
actively sought technical assistance from the WB to set up institutional structures to administer
development policy and to draft national development plans. In fact, the National Economic
Development Board (NEDB), predecessor to the NESDB, was created in 1959 based on the
WB’s recommendations to establish permanent economic planning agency. The WB also
played a significant role in supporting the government’s national development planning process
from the first to the third plans. As a matter of fact, there was an underlying motive on the
government side that it had anticipated receiving successive financial assistance for capital
investments in addition to technical assistance from the WB. Thai government also received
grant assistance from the US for academic and national defense objectives.
As early as the 1950s, with financial assistance from the US and other countries, Thai
government sent many promising young technocrats abroad to study at graduate schools. They
acquired master’s degrees and even PhDs. When they returned to Thailand, they were
assigned to work in key government positions to incorporate their knowledge/technology into
the Thai system. Hence, Thai government utilized foreign aid to support their pursuit of
human resource development and in turn, required them to play a critical part in formulating
development administration system by aggressively localizing foreign knowledge/technology
into Thai context. For example, the budget management system introduced in the 1950s was
actually a combination of Thailand’s own system blended with that of the US.
<Important role of the Department of Technical and Economic Cooperation (DTEC), an
agency specializing in administering technical cooperation>
Thai government aimed at “managing donors” by maintaining bargaining power against them.
How the Department of Technical and Economic Cooperation (DTEC) has managed foreign aid
and donors would specifically illustrate good examples for this. The DTEC acted as a single
agency to manage country’s technical assistance (TA) exclusively in a centralized manner.
(Note that in Malaysia and in the Philippines, no agency exists, which is mandated to
10
administer foreign aid exclusively. In the case of Malaysia, it is the External Assistance
Section of the EPU that manages foreign aid for both loans and technical assistance. In the
case of the Philippines, responsibilities to manage foreign aid are assigned across different
‘Staffs’ in the NEDA including the Public Investment Staff, which deals with infrastructure
development projects. Both the EPU and the NEDA are the central economic agencies
responsible for development planning and coordination.)
The DTEC possessed the authority to screen TA needs and make recommendations in
coordination with prospective executive agencies, from a position of objectivity, non-biased by
donors, on the most suitable form of TA requirements. The DTEC conducted TA screening in
conformity with the Foreign Assistance Plan (FAP) that stipulates the national strategies for
receiving grant assistance including TA, sector development policy, monitoring and evaluation.
Hence, the DTEC was in the position to scrutinize, prioritize and select TAs from a
comprehensive standpoint. The DTEC listened to the wishes and concerns of line ministries
and agencies as well as prospective donors. In doing so, the DTEC deliberately avoided
limiting itself listening to any particular donors’ opinions and gathered as many views and
advises as possible to come up with its own decisions, in line with the FAP, that were deemed to
be most appropriate in pursuing the country’s development objectives.
Even after the TAs have been approved, Thai government tried to gain a greater voice against
donors by bearing the cost of necessary counterpart funds. This has been the practice since
1950s when Thailand was receiving assistance from the US. Here, the DTEC also played a
focal role in securing and administering the counterpart funds as well as monitoring the overall
implementation. The Cabinet delegated such mandates to the DTEC. The DTEC would set
up Project Steering Committees and technical working groups thereunder, which consisted of
DTEC, executive agencies concerned, and donors to monitor the implementation. With
regarding the counterpart funds, the DTEC would gather necessary funding requests from all the
executing agencies concerned in a centralized manner, check them against the existing
standardized cost regulations on salaries for drivers and secretaries, housing, transportation etc.
The DTEC then requested counterpart funds to the BOB on behalf of each executing agency,
and then provided necessary funding to these agencies once secured. In fact, the DTEC
managed both counterpart funds as well as donor funds in the accounts established within the
DTEC. Regardless of donors and funding sources, the DTEC endeavored to apply
standardized level of salaries and costs for foreign experts as well, urging each donor to utilize
Thailand’s own country system. In this manner, the DTEC dared to maintain bargaining power
against donors in a visible way by pushing for application of uniform procedures and standards
for technical assistance.
2-2. Malaysia

Quality of leadership
<Prime Minister, Tunku Abdul Rahman Putra (1957-1970)>
Prime Minister Rahman, the first Prime Minister immediately after independence in 1957,
exercised effective leadership to carry out rural development. He was often referred to as the
“Father of Independence” and the “Father of Malaysia”. Prime Minister Rahman emphasized
11
socioeconomic development as a top priority in the national agenda. He aimed at increasing
the socioeconomic well-being of Malaysians, especially those living in rural areas. Hence, a
variety of rural development programs aiming to modernize the lives of rural Malaysians were
introduced under his initiative. In fact, abundant jungle areas were opened up to create
farmlands for the sake of the Malaysian people’s best interests. Prime Minister Rahman
attached great importance to securing political stability and functioned as the driving force for
the country’s economic development.
<Prime Minister, Tun Abdul Razak bin Dato Hussein (1970-1976)>
Prime Minister Razak, who served as Minister of National and Rural Development as well as
Deputy Prime Minister during Rahman administration (1957-1970), also exercised leadership in
rural development. When he was a Deputy Prime Minister, he introduced the “Red Book” and
the “Operations Rooms” -- instruments utilized under the British system to facilitate systematic
preparation, implementation and monitoring of development plans especially for rural
development.
When Razak became the Second Prime Minister after Rahman, he played a crucial role in
dealing with the national urgency -- the aftermath of the ethnic riot in 1969. He was
determined to reunite the country by presenting and sharing national vision with the public by
adopting the National Economic Policy (NEP) that addressed the root cause of the riot. In
order to ensure the enforcement of the NEP, he took the initiative in enhancing the existing
development machinery to facilitate implementation. Accordingly, the Implementing
Coordination Unit (ICU) was created in the Prime Minister’s Department to monitor the overall
implementation of programs and projects that would bring the NEP vision into reality. In fact,
the ICU originated from the “Operations Rooms”, reinforcing its implementation and
coordination functions among different levels of agencies concerned.
<Prime Minister, Dr. Mahathir Mohamad (1981-2003) >
Prime Minister Mahathir exercised strong leadership in institutionalizing public and private
sector coordination to realize the NEP objectives. In fact, he has further enhanced the basic
foundation of development machinery established in the 1970s to achieve greater efficiency.
Prime Minister Mahathir is regarded as a visionary leader, providing Malaysia’s new direction
for development, taking into account political, economic and social dimensions of the present.
He aimed to create jobs and wealth and to redistribute income and opportunities to solve racial
imbalance. Prime Minister Mahathir believed that economic growth must come first because
as long as the whole economic pie continued to grow, all Malaysians would be satisfied. So he
emphasized that public sector should be responsible for providing an environment conducive for
greater private sector participation.
So therefore, formal and informal coordination
mechanisms between public and private sector were strengthened under his administration. A
number of initiatives including Look East Policy and Malaysia Incorporated were introduced
under Prime Minister Mahathir’s strong leadership to enhance efficiency and public private
coordination.

Alliance between leadership and technocrats
Technocrats in Malaysia fully assumed the responsibility for realizing the national development
12
visions set forth and shared with political leaders. They obligingly engaged itself at multiple
levels to make these visions a reality. Technocrats have taken consistent steps to establish and
upgrade development machinery for national planning as a means to realize the vision set forth
by political leaders. A strong shared sense of urgency over wanting to establish a united
Malaysian nation -- a country of peoples ethnically integrated and living in harmony and
partnership -- reinforced the public’s ability to accept the role of technocrats in bringing this
overriding policy objective to fruition.

Fear of domestic crises
Malaysia, a multiethnic country with socio-economic disparities visible along racial and
regional lines, envisioned for itself a clear aim to achieve the specific paramount objectives of
eradicating poverty and creating national unity, above all else. People have a sense of strong
urgency never to repeat the racial riot of 1969, and this very fear of crises prompted reforms and
institutional changes.
Since 1971, when the NEP was introduced to address the main root cause of the ethnic riot, the
strategy of ‘growth with equity’ has served as both the basic principle and the framework for the
country’s development. In fact, Malaysia government utilized and enhanced development
machinery as a tool to realize the NEP objectives. Policy coherence was maintained steadfast
throughout successive leaders of Malaysia. Malaysia was blessed with political leaders with a
strong sense of commitment and dedication to manage crises.

Utilization of aid as integral part of development management
Malaysian government, just like the case of Thailand, strategically and selectively utilized aid
toward “graduation”. At the early period of formulating development administration in the
late 1950s and 1960s, Malaysian government actively sought technical assistance from the WB
and the UK for institution building, human resource development, and capacity building for
national development planning. The development administration the government adopted was
basically identical to that of the British system. The Malaysian government, in consultation
with the WB, restructured and strengthened the Prime Minister’s Department so that it could
play a key role in development administration. It established a small Economic Secretariat
headed by the expatriate adviser. In 1961, it was upgraded to the EPU within the Prime
Minister’s Department, and strengthened its function as the central agency for economic and
social development planning, public investment programming and selection. Despite the
insufficiency of professional skills, local officials were staffed in key positions in the EPU,
replacing the expatriates in series. The first two national development plans were drafted with
the assistance of the UK and the WB.
Just like the case of Thailand, the Malaysian government sent competent young technocrats
abroad to study and expected them to come back with proper knowledge and skills to serve for
the country. Tan Sri Thong Yaw Hong, who became the first Malaysian head of the EPU,
recalled that especially at the initial stages of formulating development administration, elite
technocrats played a critical role. Upon returning to the country, after acquiring master’s
degrees and PhDs, they were assigned to work in key government positions, replacing foreign
13
experts. They made great contribution to build core functions of development administration
machinery. In fact, Malaysian government has envisaged its long-term human resource
development strategies toward “graduation” as early as the 1970s, and this initiative would be
regarded as its critical part.
Malaysian government created the National Institute of Public Administration (INTAN) in 1972
under the Public Service Department (PSD) to provide necessary training to government
officials. As mentioned, Malaysian government envisaged “graduation strategy” in its
long-term human resource development program and the INTAN played a pivotal role in this.
In the 1970s, the government aggressively utilized aid, requesting foreign experts to provide
training to the Malaysian government officials at the INTAN. By the 1980s, sufficient local
capacity has been built up and fostered within the government to manage training on their own.
In fact, from 1981, Malaysian government has been providing technical assistance to
developing countries abroad (to 135 countries as of 2005). The External Assistance Section of
the EPU manages this initiative as part of “South-South Corporation” through the Malaysian
Technical Cooperation Program (MTCP). Malaysian government has always regarded human
resource development as one of top priority policy agenda that serves the very foundation of
building the country system. Chapters that stipulate education and human resource
development can surely be found in each successive national development plan in Malaysia.
As in the case of Thailand, Malaysian government placed high importance on possessing the
attitude of “managing donors” and having “exit plans”. The government was particularly
sensitive about donors interfering in domestic policy matters. In this regard, Malaysian
government did not necessarily listen to everything what donors have suggested. For example,
when Malaysia launched the NEP, every international agency criticized it a “socio-economic
engineering” and anticipated its failure. Despite such criticisms, Malaysian government firmly
maintained its policy and successfully overcame the crisis.
When it comes to prioritization of external assistance, Malaysian government was mindful of
characteristics and comparative advantages of each donor. The External Assistance Section of
the EPU scrutinized sectors and activities where aid would be more appropriate resource to fill
the domestic financial and capacity gaps. It appears that the government has prioritized
particular sectors to encourage foreign direct investment -- for example, power generation in the
peninsular -- although foreign aid is not sought for funding all requirements of the private sector.
Such way of prioritization contributed to attracting more private sectors for further
development.
2-3. The Philippines

Quality of leadership
<President, President Ferdinand Marcos (1965-1986)>
It was during Marcos administration when a centralized administrative body for planning, the
NEDA, was created. Although development planning in the Philippines started as early as
1935, the tasks were dispersed across different bodies and organizations, disabling to grasp the
comprehensive picture of national development visions and objectives. This centralized
14
system for development planning, however, was utilized only as a means to maintain President
Marcos’s dictatorship. This resulted in power being limited to, and horded by, technocrats and
cronies who faithfully obeyed his word. Hence, unlike the cases of Thailand and Malaysia
where centralized bureaucracy shared and supported political leaders’ development visions to
ensure the benefit of public’s interest, the centralized administrative framework in the
Philippines were utilized out of unsound motives.
<President, Corazon Aquino (1986-1992)>
President Corazson Aquino put an end to Marcos’s dictatorship and initiated a democratization
process after 1986. She undertook a government-wide structural reorganization, where the
NEDA was also revamped. As embodied in the 1987 Executive Order 230 by the President
and the 1987 Philippine Constitution, the NEDA was authorized with the distinctive advantage
of being an independent planning agency.
Hence, the NEDA became the focal point for interagency coordination, and six cabinet level
interagency committees, headed by the President were created. In addition, the divisions in
charge of foreign assistance were streamlined within the NEDA. Successive President Ramos
(1992-1998) took over this administration system, and strengthened the NEDA functions
including the coordination mechanisms of the NEDA Board interagency committees and ODA
management.

Alliance between leadership and technocrats
After the restoration of democracy and reorganization of bureaucracy, technocrats have been
making efforts to enhance and strengthen development planning and administration. In fact,
the central economic agencies, including the NEDA and the DBM, have been working
timelessly to facilitate institutional reform and strengthen development administration. They
endeavor to strengthen policy coherence by enhancing development planning, investment
programming, implementation, and monitoring and evaluation. In fact, since the late 1980s,
the government has been making a series of reforms to strengthen policy and resource alignment
to development priorities. However, due to the lack of sufficient coordination, the
decision-making structures are dualistic and fragmented among different government agencies.
In addition, development policies have been less predictable in the Philippines because when
political leaderships changed, policies also changed, which has undermined technocrat’s efforts
to strengthen policy consistency.

Degree of political intervention to the “executive branch”
Despite continuous executive efforts to enhance development administration, legislative
intervention -- ultimately comes into play, and the dual track nature of development planning
and investment programming become obvious during the budgeting process wherein allocative
distortions are generated. Legislators try to include additional projects and programs, geared
to benefit their own constituency, without rightfully going through the scrutiny process of the
administrative channel. This has created a backhanded de facto route for local interest to be
reflected in the national budget through special projects prepared by politically motivated
congresspersons. Hence, it is not uncommon for such discretionary, additional projects and
15
programs to displace both priority projects as well as programs identified and prioritized
through the administrative channel alike.
Generally speaking, legislative intervention itself should not be viewed in a negative context
because the legislature is expected to provide check and balance functions in policy decisions.
Nevertheless, the important point is whether the whole nation, including politicians, shares a
united vision for development. In the case of the Philippines, despite the central government’s
efforts to formulate and realize national development priorities from holistic and comprehensive
viewpoints, respective politicians have their own specific interests, which are apart from
national development priorities.
The Priority Development Assistance Fund (PDAF), known as “pork barrel”, allocated to
congresspersons and senators on an individual level, is the source of their power to perform
such interventions. Owing to the social and political histories behind it, legislative intrusion
into the administrative channel is often regarded as a “necessary evil” and one of the “costs of
running democracy” in the Philippines. In order to both effectively expunge such arbitrary
intervention from the system, and improve transparency and efficiency in investment selection,
technocrats have proactively adopted an array of initiatives designed to strengthen mechanisms
of development administration.

Utilization of aid as integral part of development management
The Philippine government has been utilizing foreign aid actively but it has had mixed
experiences in aid management. Since the late 1980s, technocrats have been putting efforts
into strengthening the NEDA functions including public investment preparation, prioritization
and selection to improve efficiency. However, dual system has existed between local system
and ODA, with ODA being more rigorous. In fact, procedures for the selection and
management of locally funded projects are less intensive and defined than those applied for
ODA projects -- quality of feasibility studies, social and environmental safeguards, standards for
operations and maintenance, requirements for implementation and monitoring, etc. are dualistic.
As such, decision-making structures have been fragmented and inconsistent among different
government bodies, according to different sources of funds. Locally funded projects (as well
as projects prepared by congresspersons mobilizing “pork barrel”) have been virtually exempt
from the NEDA Board Investment Coordination Committee (ICC) scrutiny, creating loopholes
in the development administration system. The absence of the ICC reviews could lead to
decreased transparency and efficiency. In fact, only the ODA and Build-Operate-Transfer
projects have been subject to the ICC process in a practical sense.
On the one hand, ODA may function as catalyst for broader institutional reforms but on the
other hand, potential risks exit that setting up additional rules and complex procedures for ODA
might lead to inefficiency, raising transaction costs to the government. This is a distinct
feature of the Philippines compared with that of Thailand and Malaysia, both of which have
basically the same approval procedures and requirements between locally funded projects and
ODA projects.
16
Bibliography
Abdullah Firdaus Haji. 1994. “The Prime Ministers of Malaysia” (Chapter 13), “Malaysian
Development Experience, Changes and Challenges”, the National Institute of Public Administration,
Kuala Lumpur
Abdullah Sanusi Ahmad, Norma Mansor, Abdul Kuddus Ahmad. 2003. “The Growth and
Development of the Public Bureaucracy”, The Malaysian Bureaucracy: Four Decades of
Development.
Christiensen, Scott, David Dollar, Ammar Siamwalla, and Pakorn Vichyanond. 1993. “The
Lessons of East Asia: Thailand The Instituitonal and Political Underpinning of Growth.” A
World Bank Publication.
Watanabe, Toshio. 1998. “Designing Asia for the Next Century” (Chapter 11), Japanese
views on economic development: diverse paths to the market, London ; New York : Routledge
A joint document of the Government of the Philippines, the WB and the ADB, 2003.
“Philippines Improving Government Performance: Discipline, Efficiency and Managing
Public Resources A Public Expenditure, Procurement and Financial Management Review”
17