Malaysia fares worse than Kazakhstan, Azerbaijan and Iraq in the latest Resource Governance Index published by Revenue Watch Institute.
Malaysia ranks 34th out of 58 countries with a score of 46 out of 100 in Resource Governance Index (RGI) published on 8 May 2013 by Revenue Watch Institute (RWI), a non-profit organization that promotes effective, transparent and accountable management of natural resources. Malaysia is categorized as ‘weak’ among the four standards of governance - satisfactory, partial, weak and failing while our neighboring countries Indonesia and Philippine are categorized as partial with better rank of 14th and 23rd respectively. We also tail behind 8 African countries - Ghana (15th), Liberia (16th), Zambia (17th), Morocco (25th), Tanzania (27th), Botswana (30th), Gabon (32nd) and Guinea (33rd) as well as countries like Indonesia Kazakhstan (19th), Venezuela (20th), Azerbajian (28th) and Iraq (29th).
Petroleum sector is one of the most important sectors in Malaysia, representing 10% of gross domestic product and 20% of exports as well as 40% of federal government revenue in 2011. According to Petroleum Development Act of 1974, Malaysia national oil firm, Petronas, has the exclusive right to manage the petroleum sector and can grant licenses and sign contracts without public scrutiny. It is only accountable to the Prime Minister. Because there’s a lack of disclosure policies, Petronas is currently publishing little information on extractive contracts or resource-funded subsidies. On licensing, it announces the award of licenses through press releases with little details and without the disclosure of the terms and conditions.