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March 24, 2008

Trengganu MB crisis: Follow the money trail

Trengganu MB crisis: Follow the money trail
anilnetto.com - 24 March 2008


While much has been said about the constitutional position, there is more to it than just the letter and spirit of the law.

There is more to it than that - and it is essential that we consider this dimension in any discussion of the political situation in Trengganu.

Follow the money trail.

One of the key issues, I believe, is how the Petronas oil royalties due to the state amounting to some RM1 billion annually should be spent - for the benefit of the people or for vested interests. Despite its oil wealth, Trengganu is one of the poorest states in the federation.

The royalty payments are no small change. In the past, the money was paid directly to the state government and dispensed under its supervision.

But when Trengganu fell to opposition hands (Pas) in 1999, then prime minister Mahathir changed the rules. He couldn’t bear to see all that money going to an opposition-controlled state government.

Instead of the Petronas royalties (amounting to 5 per cent of oil extraction and sales) going directly to the Trengganu state government, they were now channelled to a federally administered Special Fund Financing Programme (the Fund), which was established in December 2000. The money in this new Fund was euphemistically renamed “goodwill money” (wang ihsan) and it was supposed to directly finance development programmes for the people of Terengganu, largely bypassing the state government.

Since then, there has been little accountability over how this money has been spent and whether the projects really benefit the ordinary people.

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