Primer Series

Budget Series – Kerangka Keberhasilan Kementerian: The How and Why of Development and Supply

The Kerangka Keberhasilan Kementerian is a mixed bag. By establishing a clear hierarchy of ideas, it gives us relevant insights about the substantive and practical matters that the Ministry and the Armed Forces has to address in their portfolio.

In our previous article, we looked at the title page of the defence budget. We learned that the title itself gives us a clue of what to expect; B stands for Bekalan, P stands for Pembangunan. Specifically, Bekalan is a form of Belanja Mengurus or Operating Expenditures, whereas Belanja Pembangunan is Development / Capital Expenditures. We know that roughly, most of the budget is spent on the former (at RM10 to RM12 billion a year), and less on the latter (at about RM3 to RM3.5 billion a year). And lastly, we understand that the Ministry has a set of clients or stakeholders that they are answerable to in discharging its duties.

So, now we need to ask ourselves, how do we translate Operating and Development Expenditures into something practical? Which parts of the Ministry and the Armed Forces receive funding, and why? And how do we know if that funding is effective or not?

Eventually, we need to tie this question back to an even bigger question related to national security: are we prioritizing our spending for the right kind of missions to support our national security agenda?

To dive straight into it, this is where the second section of the budget comes in. The Kerangka Keberhasilan Kementerian or Framework for Ministry Effectiveness is three pages long, and it covers the following topics:

  1. It defines key “outcomes” that the ministry and the Armed Forces has to achieve in support of the stated mission and vision.
  2. It establishes the “programs” and “activities” that produce the relevant “outcomes”.
  3. It provides a quantitative “measurement” of whether or not those “outcomes” are achieved.

The three pages of the Kerangka Keberhasilan Kementerian.

Outcomes, Programs, Activities – What’s the Difference?

To peel away this text-heavy framework, we need to understand the hierarchy of ideas that drives this framework. In other words, if military planning is about a big picture being supported by smaller pictures, then what is the big picture idea and what are the smaller picture ideas that support it?

In the document itself, this hierarchy of ideas is expressed with the following concepts: outcomes, programs, and activities. What do these words mean?

  1. Outcome – the intended result or impact of a Program or Activity.
  2. Program – a broad area of the Ministry’s policy portfolio, which consists of specific Activities.
  3. Activity – a set of policy actions that deal with more specific issues under the purview of a Program.

In short, Outcomes determine Programs, and Programs determine Activities.

The Ministry and the Armed Forces has one Overall Outcome (Prestasi Outcome Kementerian) – to ensure the sovereignty of the country. This overall outcome is supported by two Programs, Pengurusan and Kesiagaan dan Operasi. Each of these in turn has its own set of Program-level Outcomes achieved via a set of Activities.

Confused? Hopefully this infographic will help!

In this way, this provides us not only with a hierarchy of ideas from the biggest picture to the smallest one, it also gives us an idea of what kind makes up the ministry’s vast policy portfolio in terms of practical actions.

As is evident from above, the Ministry must see not only to the direct disposition of military operations under Kesiagaan dan Operasi, but also support those military operations and other related affairs with effective civilian administration and management or Pengurusan.

The purpose of all activities under Kesiagaan dan Operasi, as the name implies, is to ensure the Armed Forces is at the appropriate level of readiness to carry out the necessary operations and mission sets. These stretch across four broad domains; land, air, sea, and increasingly, cyberspace.

This is why the Armed Forces is organized around three major services branches (Army, Navy, Air Force). More recently, MAF has a new Cyber Command dedicated to dealing with information operations, information management, and electronic warfare. Furthermore, when it is required, forces from each of these branches can be placed under one operational command, called the Joint Forces Headquarters or Markas Angkatan Bersama.

Each of these service branches and the Joint Forces Headquarters therefore have their own activity heading under the Kesiagaan dan Operasi program heading. Pertahanan Darat for the Army (Tentera Darat – note that it is never written as Tentera Darat Diraja or Royal Army; something we will cover one day in a separate article) covers all the land warfare aspects; Pertahanan Laut for the Royal Malaysian Navy (Tentera Laut Diraja Malaysia – TLDM) that covers all naval warfare aspects, Pertahanan Udara for the Royal Malaysian Air Force (Tentera Udara Diraja MalaysiaTUDM) that covers air warfare aspects, and Bantuan Bersama for the Joint Forces Headquarters (Markas Angkatan Bersama), in the event that an operation requires coverage across multiple domains.

The crests of the Malaysian Armed Forces, the three Service Branches, and the Joint Force Headquarters. It should be noted here that while it might appear that the Joint Force Headquarters is treated as if it were a separate service branch in the budget (i.e. having its own activity heading), in reality it is not a service branch by itself. Projek Pertiwi will cover these differences in more depth in a different article. The gist of the difference is that the service branch HQs must raise, train, sustain, AND conduct operations within their domain, whereas JFHQ is only responsible for conducting operations (albeit with units across multiple service branches).

A caveat here though is that the Cyber Command is very new, only recently announced by the current Chief of Defence Forces during his MAF Day Speech. Thus, it is unlikely that a specific activity heading will be listed for the Cyber Command in the coming budget, as it is still being formed. Link here for those interested to know more.

These military-centric activities in turn needs to be supported by a civilian administration. Pengurusan is where this magic happens. Ultimately, the Armed Forces is a part of the Malaysian Federal Government and is therefore answerable to the Malaysian people. Thus, as with any other government agency or ministry, there is a question of managing correspondence, legal affairs, finances, procurement, and most importantly, accountability in all things.

As the Armed Forces also intends to evolve into a high-tech organization, there is also pressing need for research and development efforts to be done domestically to support this modernization agenda (though success, as we will later see, is difficult to determine).

Meanwhile, as members of the Armed Forces retire, there is an expectation that the government must see to their welfare. This in turn has become a challenging socioeconomic problem over the years, and requires considerable civilian economic expertise to resolve.

So, now that we have an appreciation for the outcomes that the Ministry sets out to achieve, and the programs and activities which result in those outcomes, we need to ask ourselves, how do we measure success in conducting those programs / activities or achieving those outcomes?

Measuring Performance

For each outcome attached to a program, there is a set of key performance indicators or petunjuk prestasi utama. These indicators act as a form of measurement for whether or not programs and activities have achieved relevant outcomes.

In theory, this sounds like a good thing. It’s supposed to give readers an idea of how successful the Ministry and the Armed Forces are at carrying out programs and activities that achieve intended outcomes.

In reality, these indicators are deficient in many ways and do not help us understand the conditions and the constraints faced by defence policy planners and the Armed Forces. At the same time, they are of also questionable methodological and analytical rigor in so far as quantitative and qualitative methods are concerned.

Generally, the key performance indicators suffer from a lack of clear definition, either in terms of the formula used or the threshold to indicate category brackets.

The worst offender in this category is perhaps the ones related to military readiness. It is unclear what tertinggi (literally the highest level possible) means in practical terms. Readiness encompasses so many different variables, like training time, equipment availability, and personnel availability in a given time period; a single word like tertinggi does not tell us anything about these details.

Granted, some of that is rightfully protected under the Official Secrets Act. But at the same time, there are some clear indications that tertinggi is not an appropriate or truthful measurement.

One needs to read nothing other than the 2018 Auditor-General’s Report, Series 3, specifically on the chapter on Maritime Security Management to understand that the Navy is lacking in a few assets and thus is somewhat impeded in supporting the maritime security mission. The 2019 Auditor-General’s Report, Series 1, indicates that the Littoral Combat Ship program is delayed about 245 days from its original acceptance date, which has severe implications for the Navy’s ship availability rates.

So if the score of tertinggi fails to capture this nuance, and in fact gives the precise opposite impression of readiness, then is it still really a useful or relevant measure? Tepuk dada, tanya selera!

And this lack of clarity extends to many of the civilian indicators as well.

It is not clear how any of these percentage scores are calculated. It is likely that many of them are composite indicators, that is they are comprised of several other measurements or subindicators that are then tallied into a formula.

Without those formulae or an understanding of the component measurements, it is hard to understand what exactly is meant when the ministry scores 85.09% on the Indeks Akauntabiliti. If the index is about measuring how effective the ministry has been in managing its various transactions and bureaucratic paperwork, what does a 85.09% score translate to in terms of practical, easy-to-understand impact? Without some idea of what the formula’s variables measures, it is exceedingly difficult to say or explain.

In a similar vein, one has to question the indicators on research and development for the local defence industry as well. Without knowing the number of companies participating in MinDef procurement tenders, and without knowing just exactly how many innovations are made by Ministry’s research arm, STRIDE , it is difficult to say if 85 and 86% carry any substantive and practical meaning.

This is especially important when you consider that for the most part, many of the MAF’s big ticket assets are still foreign imports (i.e. F/A-18D, Su-30MKM, PT-91M, Gowind-class LCS, Scorpene-class Attack Submarine). If the idea of R&D is to achieve some level of limited self-reliance, then in what ways are local players slowly replacing foreign companies or supplementing them in the supply chain? This information is not immediately clear in the budget.

Furthermore, there is also the question of comparability. The budget only provides measures for the previous fiscal year and the targeted thresholds (sasaran) for the current and coming fiscal years. Not only do we not know what the level is for the current year, we also have no idea whether or not this is an improvement or decline. And because we have no idea how the formulas are calculated, strictly speaking, it would be imprudent to compare the Ministry’s performance against other agencies and ministries of different portfolios.

Many of the indicators are also subjective evaluations of satisfaction or performance, which are likely to be subject to certain biases. Indeks Kepuasan Pelanggan for example is probably an indicator aggregated from survey questions. Yet, without knowing who exactly makes up the respondents to such a survey, it is difficult to tell if the score is any reflection of a broad truth.

And perhaps, worst of all, some of the more easily understood indicators really don’t measure anything useful.

It should be noted here that firstly, the percentage of active defence relations and percentage of executed defence operations are NOT measures of impact. They are measures of effort. Secondly, when it comes to something like defence relations, it is insufficient to look at the quantity of interactions; one must also look at the quality of those interactions.

The reality is, while Malaysia loves to work with everyone, only a select few defence relationships produce actual, meaningful results. You would not treat the United States, the source of spare parts and ammunition for RMAF F/A-18D Hornets, the same as other smaller countries that we only have nominal relations with.

Similarly, without knowing the full extent of what operations can or cannot be executed, it is unhelpful to know that the Ministry and Armed Forces can execute 100% of operations it has planned at the beginning of the year. What’s missing here is what they CANNOT do, which might be more helpful to us when it comes to informing us about gaps and rooms for improvement.

So Where Does That Leave Us?

The Kerangka Keberhasilan Kementerian is a mixed bag. By establishing a clear hierarchy of ideas, it gives us relevant insights about the substantive and practical matters that the Ministry and the Armed Forces has to address in their portfolio. However, it falls extremely short when it comes to correctly measuring or estimating the real impact of the various programs and activities. Thus, in its role in assessing the performance of the Ministry, it is not so useful as a framework.

However, at least, now that we know have an idea of the broad aspects of the Ministry’s and the Armed Forces’ responsibility. We now have an understanding of the How and Why of the Ministry and the Armed Forces’ day-to-day activities.

Tune in to the next section, as we finally explore, line-by-line, the Estimated Expenditures Statement! Here, we will answer the question (finally) of How Much? It is highly recommended that before you proceed to that article, that you at least read this one and the preceding article on Bekalan/Pembangunan 60, as interpreting the estimated expenditures statement will require that you grasp key concepts from both.

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