There have been many discussions and debates among government officers and the members of the political party (the reigning and the opposition party) concerning the government effort to streamline the bureaucracy. There are some who favor such efforts and some who fear about its future outcome especially on several issues such as authority, financial control within the administrative system itself and the problem of reducing the number of workers in the public sectors. This could produce a kind of setback for the government who is responsible to oblige in upholding the social responsibility principle.

However, this kind of reformation may be necessary to be studied thoroughly in relation to the rationality to perform efficiently and according to the scope of the government’s ability especially in term of its financial controls.

The new proposal to reform the Japan administrative system is still being carried out orderly and carefully studied by a council namely the Administrative Reform Council. This council is chaired personally by the Prime Minister himself. The council also comprises several panels such as the Head of the Management and Coordination Agency (Sadatoshi Ozato), 13 members from private sectors and minister in charge of administrative reform. Representatives from the private sectors are mostly from the leading scholars and business leaders. This council is responsible to produce a report concerning the proposal of the new administrative system that will later be launched in January 2001.

The initial report was released in September 1997 and Prime Minister Hashimoto had requested leaders of the ruling alliance (Liberal Democratic Party, Social Democratic Party and New Party Sakigake) to restudy the initial report from the council and redevelop to finalize the draft. In the initial report the Council proposed to strengthen the Cabinet functions and reorganize the existing 22 ministries and agencies on a function by function basis into 13 ministries and agencies. Applying the consolidation process would do for the mechanism process. In December 1997 the Administrative Reform Panel recommended another report by indicating that the government’s 22 ministries would be refined into one Cabinet Office and 12 ministries.

The essence of the report is to highlight a greater leadership role for the Prime Minister and this is structurally done by strengthening the function of the Cabinet and its advisory functions. Such effort is important because the Prime Minister and the Cabinet should be assisted by a system of coordination under the existing leadership in more orderly manner. In fact, in Malaysia, such system is comfortably maintained where the Prime Minister and his Cabinet is very well served by the Cabinet, Constitution and Inter-Government Relations Division (shortly named as Cabinet Division) besides the Prime Minister Office. Both divisions are part of the Prime Minister Department, which is considered to be one ministry. The Cabinet Division is led by the Chief Secretary to the Government who is also the Head of the Civil Service. This system is so effective to ensure that all Cabinet decisions are implemented effectively by the federal and state agencies. To simplify, when Cabinet derives to a decision, it will be conveyed to the Ministry and the Ministries concerned under the supervision of the Cabinet Division. Finally, the decision will be conveyed administratively to related parties and through several high-level of government meetings such as Meeting of the State Chief Minister; Meeting of Secretary-Generals of Ministries and Heads Of Services; Meeting of Heads of Federal Departments; Meeting of Chief Executives of Federal Statutory Bodies; and Meeting of Liaison Committee Between Federal and State Government. Thus, such process would guarantee that every government department and agency would implement every decision effectively and efficiently according to the real intention of the government to serve the nation as a whole.

Another issue from the proposal has raised several critics concerning the authority of the Finance Ministry in the reformation stage. Of course, one objective of the reformation is to control the financial and the fiscal aspects. On Japan Finance Ministry reform, the are actually two views. One from the Liberal Democratic Party who favors that the ministry of finance should retain some monetary related functions. Another one from New Party Sakigake who has insisted that all financial market related functions should be transferred to an independent Financial Supervision Agency that would be established in June 1998.

Both opinions are actually have highlighted a very good basis to make a clear understanding on how to handle various issues on financial matters. However, a clear control from the government is crucially important. If financial issues are categorized numerously and no direct supervision from the sole ministry concerned, this could create a complicated procedure and diversified decisions. Rather than create a new agency to handle several financial matters, it is far better to have a specific national council coordinated by the Ministry of Finance to overview any arising financial problem. The Finance Ministry could coordinate this council. Later, the ministry provides a set of guideline to give solution on the arising issue by advising the Cabinet to produce a more comprehensive policy. However the system should not be too rigid. It has to take into consideration on flexibility to accommodate several experts.

In Malaysia, the role of Ministry of Finance is very eminent. In fact, the government is always being advised by the National Economic Council to handle any financial and fiscal issue for short and long term planning. Several experts, besides coordination from the Ministry of Finance, closely supervise the Council. The supervision is very closely monitored and tailored easily by one ministry. This is to ensure an effective financial system in all government entities. Other ministries and departments are not worrisome about the supremacy of the ministry because any financial control is normally discussed at national level and normally would be based on the current national policy. As a matter of fact also, the government of Malaysia practices a system so called Modified Budgeting System. It means that a department is allocated a budget for various programs and these programs are prioritized accordingly after being screened by the Ministry of Finance. If there were a cut of expenditure by the Ministry of Finance due to certain circumstances; for instance economic crisis, the department could still use the allocation from other least important programs to satisfy the main program. The department does not have to go through the initial process of getting new allocation from the Ministry of Finance. In short, whatever reformation to be introduced, flexibility should be recognized in the system.

Concerning the problem of downsizing the public sector in Japan, serious study should be made further whether the cut of employment is necessary or not. Maybe a new concept should be introduced namely rightsizing the public sector. This concept was introduced in Malaysia in a few years back. It emphasizes the essence of allocating human resources at a right function and location. Therefore, many government agencies were directed to revise their functions and activities to allocate a right number of employees in the public sector as a whole rather than reducing the number of the existing public employee.

Reformation on government administrative system is not an easy task. It has to take into consideration numerous measures related to financial control and human resources management. Such reformation should reflect to the kind of efficient and effective government. The administrative system also should be more transparent for public consumption. Japan government has made a serious effort in reforming its administrative system. Again, this kind of reformation is necessary to be studied thoroughly in relation to the rationality to perform efficiently and according to the scope of the government’s ability. With careful study and consideration, such effort can produce a positive kind of change to ensure that the new system would be a new paradigm shift for the government to meet the challenge of the next coming century.