A Fattah Yatim - Blockchain - C4 211208.pdf

Presentation on Blockchain introduction at a Malaysia's C4Centre event in 2021. Focus is on Blockchain to minimise corruption.

1. International Anti-Corruption Day 2021
Using Technology to Turn the Tide Against Corruption
Using Blockchainto Combat Corruption
in Procurement
by
Abdul Fattah Mohamed Yatim
(
[email protected]
, [phone])
Chairman of Standards Committee on
Blockchain and Distributed Ledger Technologies (TC/G/15)
,
Department of Standards Malaysia
Ministry of International Trade and Industry
8 December 2021

2. Presentation Outline (Major Items)
2
BlockchainBasics
2
BlockchainUse Developments
2
Blockchainin Procurement
2
Blockchainand Big Picture Thinking
2
Blockchainas Anti-Corruption Tool
2
BlockchainImplementation Issues
2
European Parliament Resolutions on Blockchain
2
BlockchainShould be in the Manifestos of GE15
2

3. BLOCKCHAIN BASICS
3

4. Blockchainand
Distributed Ledger is
Part of the Fourth
Industrial Revolution However for Blockchain
projects to succeed, plans
should not follow traditional ICT
project planning and
implementation. It requires a
different paradigm.
Blockchain and Distributed Ledger

5. BlockchainEnables Core Governance Functions/Benefits
2
Transparency
-
Ketelusan
2
Visibility of records – Subject to access rights)
2
Traceability
–
Transaksi boleh dijejaki
2
(Provenance, Tracing to Source or All related parties
handling/affecting along the process or ‘transformation’ of a
particular record)
2
Auditability –
Boleh di audit
2
(One common set of records for all interested parties; eliminates
contentions and conflicts)
2
Immutability
–
Tidak boleh diubah
2
(Records cannot be altered)
5

6. Databases and Distributed Ledger Technologies
6
Source : DISTRIBUTED LEDGER
TECHNOLOGY SYSTEMS - A Conceptual
Framework
https://www.jbs.cam.ac.uk/fileadmin/user_ upload/research/centres/alternative- finance/downloads/2018-10-26- conceptualising-dlt-systems.pdf
Blockchain is one
type of Distributed
Ledger Technology
(DLT)

7. DEVIATIONS FROM NORMAL
EXPECTATIONS
7

8. “There is no single, comprehensive, universally accepted definition
of corruption. Attempts to develop such a definition invariably
encounter legal, criminological and, in many countries, political
problems.”
Forms of Corruption
2
“Grand” And “Petty” Corruption
2
“Active” And “Passive” Corruption
2
Bribery - Specific types of bribery include:
• Influence-peddling
• Offering or receiving improper gifts, gratuities, favours or
commissions
• Bribery to avoid liability for taxes or other cos ts.
• Bribery in support of fraud
• Bribery to avoid criminal liability
• Bribery in support of unfair competition for benefits or resources
• Private sector bribery
• Bribery to obtain confidential or "inside" inform ation
2
Embezzlement, Theft And Fraud
2
Extortion
2
Abuse Of Discretion
2
Favouritism, Nepotism And Clientelism
2
Conduct Creating Or Exploiting Conflicting Interests
2
Improper Political Contributions
2
Note : TI definition; “We define corruption as the abuse of
entrusted power for private gain.”
8

9. “There is no single, comprehensive, universally accepted definition
of corruption. Attempts to develop such a definition invariably
encounter legal, criminological and, in many countries, political
problems.”
Forms of Corruption
2
“Grand” And “Petty” Corruption
2
“Active” And “Passive” Corruption
2
Bribery - Specific types of bribery include:
• Influence-peddling
• Offering or receiving improper gifts, gratuities, favours or
commissions
• Bribery to avoid liability for taxes or other cos ts.
• Bribery in support of fraud
• Bribery to avoid criminal liability
• Bribery in support of unfair competition for benefits or resources
• Private sector bribery
• Bribery to obtain confidential or "inside" inform ation
2
Embezzlement, Theft And Fraud
2
Extortion
2
Abuse Of Discretion
2
Favouritism, Nepotism And Clientelism
2
Conduct Creating Or Exploiting Conflicting Interests
2
Improper Political Contributions
2
Note : TI definition; “We define corruption as the abuse of
entrusted power for private gain.”
9

10. BLOCKCHAIN USE DEVELOPMENTS
TRADE FACILITATION
AND SUPPLY CHAIN
(as examples)
10

11. B
Walmart and IBM implemented a pilot using blockchain for the farm-
to-table processing of mangoes :
B
Without Blockchain
– Tracking sliced mangoes origin took
seven
days.
(actual is
6 days, 18 hours, and 26 minutes
.)
B
With Blockchain
– Tracking of mangoes took
2.2 seconds
.
B
In addition to just seconds to track, the whole chain of events is
traceable ie which party handling the item, the storage conditions,
and handling conditions etc as required.
Source :
https://newfoodeconomy.org/blockchain-food-traceability-walmart-ibm/
11
Complete Traceabality with Blockchainin Supply Chain –
Walmart Pilot

12. Example : Blockchain in Supply Chains
Source :
https://transportgeography.org/?page_id=8112
12

13. Salmonella multi-state outbreak from papayas in 2017 in US market B
Impact :
B
173 cases of salmonellosis, 58 hospitalisations, one death across 21 states
B
Consumers advised to avoid eating papayas
B
Papaya farmers suffered losses
B
Results and Findings :
B
Health officials took almost
three weeks
to trace the source
B
Contamination from
a single farm in Mexico
Source : Food Traceability on Blockchain: Walmart’s Pork and Mango Pilots with IBM by Reshma Kamath1 (June 2018)
13
Food Contamination Outbreaks – Case 1

14. CITIES2030 Framework –European Union 2
The main goal of CITIES2030 is to create a future proof and effective UFSE (Urban food systems and
ecosystems) via a connected structure centered in the citizen, built on trust, with partners encompassing the
entire UFSE. CITIES2030 commit to work towards the transformation and restructuring of the way systems
produce, transport and supply, recycle and reuse food in the 21st century.
2
CITIES2030 vision is to connect short food supply chains, gathering cities and regions, consumers, strategic
and complement industry partners, the civil society, promising start-ups and enterprises, innovators and
visionary thinkers, leading universities and research across the vast diversity of disciplines addressing UFSE,
including food science, social science and big data.
2
CITIES2030 actively encourage the participation of citizens by delivering a trusted UFSE, moving consumers
from being passive recipients to active engagement and motivated change agents. Cities and regions will
improve resilience and sustainability, and their leadership will create short food supply chain and ecosystems
enabling local investments, trans-borders and transnational deployment.
2
A blockchain-based data-driven UFSE (urban food systems and ecosystems) management platform will
secure intelligence and coordination actions by delivering an accurate, almost real-time digital twin of the
whole supply chain, e.g. from production to waste management, but also on key enablers of resilience and
sustainability.
Source :
https://cities2030.eu/framework/
14

15. 15

16. BLOCKCHAIN IN PROCUREMENT
16

17. This World Economic Forum report discusses
the proof of concept project to implement
Blockchain in
Columbia’s public
procurement system
.
The project takes a three-pronged
approach to blockchain experimentation in
the anti-corruption context, focusing
specifically on public procurement. It
includes:
1)
a software proof-of-concept (PoC);
2)
the enumeration of complementary
policy proposals to strengthen
procurement integrity; and
3)
a civic engagement strategy focused
on encouraging and empowering
citizen monitors to flag risky behaviour in
the system.
17

18. Three Pronged Approach
18

19. Project Aim and Summary 2
To communicate the findings of this novel and multifaceted project with
the goal of identifying the value of blockchain technology for public
procurement and laying the foundation for similar experimentation,
innovation and adoption worldwide.
2
The project is anchored in a software PoCto uncover, using a bottom-up
approach,
2
key capabilities and limitations associated with blockchain for public
procurement, 2
as well as critical related policy considerations.
2
The PoCis focused on the vendor bidding and bid evaluation phases of
procurement.
19

20. The Four Key Stages of the Public Procurement Process Source: Transparency International, 2014
20
Each phase of each kind of public
procurement process presents its own
challenges and opportunities for
corruption, including:
3bribery,
3undue influence on government
assessments,
3private-sector collusion,
3bid rigging,
3coercion,
3extorsion, and
3fraudulent submissions and bid
evaluations.

21. Summary of accountability and transparency
challenges in public procurement(details in backup)
21

22. Vendor selection process within Colombian public
procurement law –Flow and key points
2
Pertinent data and decisions in every step of
the vendor selection process is stored on the
Blockchain.
2
Internal verification checks automatically
enforced (eg vendor id – bidder id)
2
Results are published (id hidden)
2
System shortlists based on criteria
2
There are 3 public comment windows
(required by Columbian law) – in yellow
border boxes
2
After Initial tender offer published
2
After phase 1 tender evaluation
2
After phase 2 tender evaluation (before
winner is declared).
2
Public feedback also captured as hash in
blockchain.
2
Feedback (2nd and 3rd) compared with bid
info and adjustments if relevant.
Note : Details of each step are in the backup charts.
22

23. 23
2
Pertinent data and decisions in every step of the vendor selection process is
stored on the Blockchain. 2
Internal verification checks automatically enforced (eg vendor id – bidder id)
2
Results are published (id hidden)
2
System shortlists based on criteria
2
There are 3 public comment windows (required by Columbian law) – in yellow
border boxes
2
After Initial tender offer published
2
After phase 1 tender evaluation
2
After phase 2 tender evaluation (before winner is declared).
2
Public feedback also captured as hash in blockchain.
2
Feedback (2nd and 3rd) compared with bid info and adjustments if relevant.
Note : Details of each step are in the backup charts. Vendor selection process within Colombian public
procurement law –key points

24. Report Highlights 2
The importance of a multifaceted approach to blockchain implementation, complemented by policy reforms that can help realize the technology’s transparency- and accountability-enhancing capacities.
2
Multistakeholder and civic engagement in the development, deployment and monitoring of blockchain-based procurement systems are crucial to achieving
impact. 2
It is also important to note blockchain technology’s inability to reduce corruption
risk in certain human activities that can occur outside any electronic
procurement (e-procurement) system, most notably bribery or collusion among
vendors or between vendors and tenderers.
24

25. Permissionlessand “Hybrid” BlockchainComparison 2
Permissionless
2
findings reveal multiple challenges and unanticipated vulnerabilities with fully permissionless blockchain networks, despite their benefits. The most notable
challenges relate to scalability and vendor anonymity (or more generally,
privacy).
2
Hybrid Blockchain (permissioned and a permissionlessbase-layer blockchain
protocol)
2
hybrid blockchain may be most attractive, as these mixed systems strike an ideal balance, given present technological limitations, between transparency,
procedural integrity, scalability and security.
25

26. Summary and Recommendation 2
Ultimately, blockchain technology provides several unparalleled
qualities and capabilities towards combating procurement corruption. 2
Policy-makers should ultimately identify their priorities and requirements
given their specific social, political and economic conditions and the
trade-offs associated with various blockchain technologies.
26

27. BLOCKCHAIN BIG PICTURE THINKING
27

28. Blockchain History 2
1982
: Quote : “A number of organisations who do not trust one another can build and maintain a
highly secured computer system that they can all trust (if they agree on a workable design)”.
2
PhD Thesis by David Lee Chaumtitled : Computer Systems Established, Maintained and Trusted by
Mutually Suspicious Groups
2
1991
: A cryptographically secured chain of blocks is described for the first time by Stuart Haber and
W Scott Stornetta
2
1998
: Computer scientist Nick Szabo works on ‘bit gold’, a decentralised digital currency
2
2000
: Stefan Konstpublishes his theory of cryptographic secured chains, plus ideas for
implementation
2
2008
: Developer(s) working under the pseudonym Satoshi Nakamotorelease a white paper
establishing the model for a blockchain
2
2009
: Nakamoto implements the first blockchain as the public ledger for transactions made using
bitcoin
2
2014
: Blockchain technology is separated from the currency and its potential for other financial,
interorganisational transactions is explored. Blockchain 2.0 is born, referring to applications beyond
currency
2
2014
: The Ethereum blockchain system introduces computer programs into the blocks, representing
financial instruments such as bonds. These become known as smart contracts.
Source :
https://nakamotoinstitute.org/static/docs/computer-systems-by-mutually-suspicious-groups.pdf
https://www.icaew.com/technical/technology/blockchain/blockchain-articles/what-is-blockchain/history https://www.forbes.com/sites/vipinbharathan/2020/06/01/the-blockchain-was-born-20-years-before-bitcoin/?sh=5c0588cc5d71
28

29. 29
Source : Scott Stornetta - History & Drivers the New Era of Digital Records - Blockchain & Infrastructure
https://www.youtube.com/watch?v=_nF6K-S07hM&t=105s
(Government Blockchain Association channel)

30. 30
Source : Scott Stornetta - History & Drivers the New Era of Digital Records - Blockchain & Infrastructure
https://www.youtube.com/watch?v=_nF6K-S07hM&t=105s
(Government Blockchain Association channel)

31. 31
Source : Scott Stornetta - History & Drivers the New Era of Digital Records - Blockchain & Infrastructure
https://www.youtube.com/watch?v=_nF6K-S07hM&t=105s
(Government Blockchain Association channel)

32. Decentralized Trust Using Blockchains–Seven Principles
1.
It would be inaccurate to label Blockchains as a tool for a disintermediation of trust. In
reality they only enable
re-intermediation of trust
.
2.
Blockchains enable a degree of trust unbundling. The Blockchain challenges the role
of existing trust players and reassigns some of their responsibilities, sometimes
weakening their authority.
3.
The
Blockchain does not eliminate trust. It shifts it
. It moves it around.
4.
Trust is always needed. What changes with the Blockchain is how trust is delivered and
how it is earned. Whoever earns the trust earns the relationship and that includes
trusting a Blockchain.
5.
The Blockchain decentralizes trust and makes way to multiple,
singularly harmless, but
collectively powerful entities that authenticate it
.
6.
The Blockchain disrupts existing economics of trust because the costs of delivering
that trusts are now distributed.
7.
Whereas central trust distanced us, distributed trust brings us together.
32
Source : The Business Blockchain, Promise, Practice and Application of the Next Internet Technology by William Mougayar

33. Quote : “Innovation and technology will be the main drivers of growth in the future. The MAS has
been working actively with the financial industry to create a Smart Financial Centre,
where innovation is pervasive and technology is used widely.
We want to do this to increase efficiency, manage risks better, create opportunity, and
improve people’s lives.
The problem statement is this:
B
In a real-time gross settlement payment system, transactions typically go through a single trusted party
, often the central bank.
B
The challenge MAS posed itself was: can we create a more efficient inter-bank
payment and settlement system without MAS acting as the trusted party?”
33
Source :
http://www.mas.gov.sg/News-and-Publications/Speeches-and-Monetary-Policy-Statements/Speeches/2017/Economic-Possibilities-of-Blockchain-Technology.aspx
"Economic Possibilities of Blockchain Technology" -Keynote Address by Mr
Ravi Menon, Managing Director, Monetary Authority of Singapore, at Global
Blockchain Business Conference on 9 October 2017

34. Trust and Re-intermediation of Trust for Efficiency ….. U
The Objectives (as mentioned by Mr Ravi Menon) :
U
increase efficiency,
U
manage risks better,
U
create opportunity, and
U
improve people’s lives.
U
‘Last hurdle’ impeding maximum achievement of above objectives are:
U
Trust functions and factors held by ‘Trusted Partie s’, some of which are :
U
Acts and Regulations (that requires significant updates)
U
Organisational structures (that impede the objectives)
U
Cross organisation inter-dependencies and function overlaps (that confuses and wastes resources)
U
Procedures and Processes (that are obsolete)
U
All the above ‘trust functions’ components must be scrutinised
for revamp.
U
The technological opportunity to remove or re-intermediate the ‘Last Hurdle’ is BLOCKCHAIN/DLT (with Smart Contracts)

35. BLOCKCHAIN AS ANTI CORRUPTION
TOOL
35

36. Main points 2
Blockchain has the potential to be a game changer in anti-
corruption efforts.
Whether it is successful or not largely depends on
contextual elements –infrastructures, legal systems, social or
political settings
– rather than on the technology itself.
2
Implementation of blockchain technologies in governance affects
fundamental aspects of society, such
as trust in institutions, identity,
transparency
, and data and privacy protection.
2
A blockchain is designed to operate in environments where trust in
data/code is greater than trust in individuals or i nstitutions.
2
Records entered in the blockchain are transparent and immutable.
Because of these features, there may be conflicts with individual
rights such as the right to privacy or the right to be forgotten, as
described in the European Union General Data Protection
Regulation (GDPR).
2
When blockchains hold registries of physical items, trusted
gatekeepers have to
ensure that the physical reality and digital
information correspond
.
2
Digital infrastructure, governing regulations, and digital literacy
should be in place before blockchain-enabled registries are rolled
out, particularly in developing countries.
2
Decision makers should have an understanding of the technology
before deciding on whether or not it is appropriate.
36

37. DLT is a “multi-party consensus system that
enables multiple
distrusting entities to reach agreement
over the ordering of
transactions in an adversarial environment without relying on a
central trusted party.”
They specify five criteria to support the definitio n:
1.
Multiple entities (computers) need to be able to create new
records.
2.
Entities need to reach agreement on the ordering of records.
3.
Each entity needs to independently be able to validate
records.
4.
Each entity needs to be able to detect unauthorised
changes to the records.
5.
Entities must also be able to detect changes in consensus
over records.
Only a few functioning systems today comply with these criteria.
The authors of the study recommend against using the term
“blockchain” for systems only applying parts of the technology.
Yet, 77% of current projects use the terms “blockchain” or “DLT”
without being neither decentralised nor dependent on multiparty
consensus.
37

38. BLOCKCHAIN SUITABLE FOR SOME
PROJECTS ONLY
38

39. “Some companies may not
have even needed blockchain
.. Traditional data architecture
could have done as well as, or
better than, blockchain in
85
percent
of these projects.”

40. World Economic Forum Report : Challenges to
BlockchainDeployment
40
Source : Inclusive Deployment of Blockchain : Case S tudies and Learnings from the UAE – World Economic Forum

41. IDENTIFYING BLOCKCHAIN PROJECTS
41

42. 42
Source : World Economic Forum - Blockchain Beyond th e Hype - A Practical Framework for Business Leaders
Focus on Step A : Are you trying
to remove intermediaries or
brokers?
Decision
Tree

43. Removing Intermediaries or Brokers?
D
Step A Question :
Are you trying to remove intermediaries or brokers?
D
Note that the Step A Question is
not
:
D
Are you trying to automate a process?
or
D
Are you trying to save costs?
or
D
Are you trying to keep up with the competition?
etc
DQuestion in step A forces decision makers to look deeply in their current
processes, challenge fundamental business assumptions and identify
those parts of the (usually non core record keeping and routine) work
typically identified as intermediaries, whether int ernal or external that can
be eliminated.
DExamples of intermediaries that can possibly be removed :
DClerks keeping track of one up, one down track of goods in supply chain.
DClearing houses between your organisation and your suppliers.
DClearing houses between your organisation and competitors.

44. BLOCKCHAIN STANDARDS
(ISO 22739 -Vocabulary)
44

45. ISO 22739 -Blockchain and distributed ledger technologies —
Vocabulary (selected terms)
3.6 Blockchain
distributed ledger (3.22) with confirmed blocks (3.9) organized in an
append-only
,
sequential chain
using
cryptographic links
(3.16)
Note 1 to entry: Blockchains are designed to be
tamper-resistant
and to create
final, definitive
and
immutable
(3.40) ledger records (3.44).
3.25 distributed ledger
ledger (3.53) that is shared across
a set of DLT nodes
(3.31) and
synchronized between the DLT
nodes
(3.31) using a
consensus mechanism
(3.13)
Note 1 to entry: A distributed ledger is designed to be
tamper resistant
,
append-only
and
immutable
(3.50) containing
confirmed
(3.93) and
validated
(3.98
) transactions
(3.93).
3.9 confirmed
accepted by consensus (3.12) for inclusion in a distributed ledger (3.25)
45

46. 3.50 immutability
property of a distributed ledger (3.25) wherein ledger records (3.54) cannot be modified or removed
once added to that distributed ledger (3.25)
Note 1 to entry: Where appropriate, immutability also presumes keeping intact the order of ledger
records (3.54) and the links between the ledger records (3.54)
3.12 consensus
agreement among DLT nodes (3.31) that 1) a transaction (3.93) is validated (3.98) and 2) that the
distributed ledger (3.25) contains a consistent set and ordering of validated (3.98) transactions (3.93)
Note 1 to entry:
Consensus does not necessarily mean that all DLT nodes (3.31) agree.
Note 2 to entry: The details regarding consensus differ among DLT (3.26) designs and this is a
distinguishing characteristic between one design and another.
3.96 trust
degree to which a user or other stakeholder has confidence that a product or system will behave as
expected by that user or other stakeholder
46
ISO 22739 -Blockchain and distributed ledger technologies —
Vocabulary (contd. –selected terms)

47. 3.98 validated
status of an entity (3.39) when its
required integrity conditions have been checked
Note 1 to entry: For example, in a DLT system (3.35), a transaction (3.93), ledger record (3.54), or
block (3.2) can be validated.
3.100 validator
entity (3.39) in a DLT system (3.35) that participa tes in validation (3.99)
Note 1 to entry: In some DLT systems (3.35) the DLT node (3.31) that has the role of validator can
digitally sign a ledger record (3.54) or block (3.2 ).
3.39 entity
item inside or outside an information and communication technology system, such as a person, an
organization, a device, a subsystem, or a group of such items that has recognizably distinct
existence
3.69 peer-to-peer
relating to, using, or being a
network of equal peers
that share information and resources with each
other directly
without relying on a central entity
(3.39)
47
ISO 22739 -Blockchain and distributed ledger technologies —
Vocabulary (contd. -selected terms)

48. WORLD ORGANIZATIONS PAPERS ON
BLOCKCHAIN
48

49. World Organizations’ Papers on Blockchain for International Trade
49
United Nations
World Trade Organization
World Customs Organization

50. BLOCKCHAIN IMPLEMENTATION
ISSUES
50

51. Scope/Function of (some) Ministries & Agencies in Blockchain Enabled Trade Facilitation
51

52. Challenges in Blockchainimplementation in Malaysia The following are the identified challenges in implementation of Blockchain as a national
roadmap program:
a.
ICT is handled by too many Ministries and agencies that there are overlaps and at times unclear ownership
and driver.
b.
Unclear mandate or the execution of the mandate may result in poor cooperation between the Ministries or
agencies involved.
c.
Ministries and Agencies continue to work in silos rather than proactively do their part in achieving the needs
required for successful Blockchain implementation.
d.
Cross Ministry ‘rivalry’ in controlling parts of th e project delaying or stalling the work. Information ‘scatter’ ie
different Ministries and Agencies currently capturing similar ‘type’ of data, each not compromising on
ownership and correctness (where there are discrepancies).
e.
Adequate funding.
f.
Having a comprehensive change management program to train stakeholders and transformation of
mindset.
g.
Non-Government stakeholder entities not cooperating, possibly with the fear that intermediary functions will
be redundant.
h.
Delay in regulatory changes and alignments.
i.
Delay in the Government addressing cross border issues with other Governments.
j.
Commitment by all parties to implement the roadmap.
k.
Corruption persistence, implicitly or stealthily de laying and stalling changes to status quo at various stages
of the project planning and implementation.
52

53. EUROPEAN PARLIAMENT RESOLUTIONS
ON BLOCKCHAIN
53

54. “whereas DLT can provide
a framework of transparency,
reduce corruption,
detect tax evasion, allow the tracking of
unlawful payments, facilitate anti-money laundering
policies, and detect misappropriation of assets;”
European Parliament Resolutions on Blockchain-2018
“whereas blockchain has great potential to improve t ransparency and
traceability throughout the supply chain, raise the level of participant
trust in a given network, streamline customs checks and regulatory
compliance, reduce transaction costs, strengthen th e immutability
and security of data and
function as a tool to combat corruption
;
whereas the potential benefits are accompanied by s everal
challenges, such
as cybersecurity;
whereas
blockchain can provide a framework for transparency in
a supply chain, reduce corruption
, detect tax evasion, enable the
tracking of unlawful payments and tackle trade-base d money
laundering (TBML); whereas there are risks associat ed with the use
of unpermissioned blockchain applications for crimina l activities,
including tax evasion, tax avoidance and TBML; whereas the
Commission and the Member States must monitor and address
these issues as a matter of urgency;”

55. BLOCKCHAIN SHOULD BE IN THE
MANIFESTOS FOR GE15
55

56. GE15 –Proposed (Minimal) Manifesto Text (Template)
pertaining to Blockchainfor All Candidates
A.
Recognising that Blockchain is beyond a technology issue that cuts across
Ministries and Agencies, and that Malaysia is currently lagging behind other
countries in implementation, we will establish a practical governance and
implementation structure to propel the nation into strategic and effective
use of Blockchain in all prioritized facets of socie ty.
B.
The coordinated strategy and implementation will ensure transparency,
traceability and accountability in the running of government, trade and
socio-economic obligations (including health and narrowing the income
disparity gap) while ensuring security and privacy. This will enhance
efficiency and effectiveness, and minimise waste, leakages and corruption
in the country. Malaysia will then be competitively positioned in overall
service delivery excellence covering regional and cross border activities in
international trade while achieving SDG and carbon neutral goals.
56

57. GE15 –Proposed (Minimal) Manifesto Text (Template)
pertaining to Blockchainfor All Candidates (contd.)
C.
As a number of Ministries, Government Agencies, GLCs, private sector
economic and industry sector entities and NGOs and other relevant
stakeholder entities are or will be involved in Mal aysia’s Blockchain
agenda, a new entity (hereby provisionally named BcAd.my) will be
established reporting to Parliament, comprising the relevant
stakeholders. BcAd.mywill also have the authority to pursue and ensure
that supporting technology and tools, especially those that will be
required to facilitate or feed data to the Blockchain in line with the
coordinated strategy, will also be expedited (funded, resourced and
incentivised). Such technologies may include but are not limited to
Internet of Things, Artificial Intelligence, Roboti cs and Big Data.
57

58. GE15 –Proposed (Minimal) Manifesto Text (Template)
pertaining to Blockchainfor All Candidates (contd.)
D.
To ensure the independence and continuity of the Blockchain agenda,
the necessary statutory provisions will be establis hed to ensure that
changes in political leadership of the country will not affect the
existence and programs of BcAd.my. This new entity will provide half
yearly updates to the public on its progress, issues, adjustments,
realignments where necessary in line with changing priorities and world
developments impacting local issues. Significant deviations will be
subject to stakeholder due diligence before execution.
E.
As the Blockchain strategy and program also covers the longer term,
BcAd.mywill comprise a balanced mix of experienced professionals
and experts from among stakeholders as well as youths with the right
expertise or who will be trained with the right expertise to ensure the
continuity of the strategy and programs in the decades to come.
58

59. “Elite corruption is the most difficult to combat
because of the power at the disposal of the elite
unless there is a major political upheaval.” DYMM Paduka Seri Sultan Dr. Nazrin Muizzuddin Shah Ibni
Almarhum Sultan Azlan Muhibbuddin Shah Al-Maghfurlah
59

60. Possible Future Indices - BlockchainEffectiveness Index
60
No. Country Corruption Perceptions
Index (Score/Rank)
Blockchain
Effectiveness Index
1 Country A 90/2 90
2 Country B 80/8 95
3 Country C 75/15 70
4 Country D 60/30 65
5 Country E 45/60 30
6 Country F 35/100 40
Note : It is possible that when countries are in various st ages of blockchain, a “Blockchain Effectiveness Index” (BEI) will
be created in future which indicates the country’s level o f blockchain implementation and effectiveness in function. This
BEI will be tabled against other indices like Corrupti on Perception Index (shown in table above), Ease of Doi ng Business
Index, Trade Performance Index, Logistics Performance Index, Health Care Index, e-Government Index etc.

61. Problem Solving
61

62. THANK YOU
Abdul Fattah Mohamed Yatim
Contact :
[email protected]
[phone]
Blog :
http://fattahyatim.wordpress.com
This presentation can be downloaded from
http://bit.ly/c4211208a
62

63. BACKUP CHARTS FOR THE WEF REPORT
ON BLOCKCHAIN PoCON
PROCUREMENT IN COLUMBIA
63

64. Corruption in public procurement: Bidding and bid
evaluation phases
2
Undue direct contracting – Bypassing a competitive bidding process and awarding the contract to a
predetermined entity because of specious claims related to “extreme urgency” or other
circumstances
2
Lack of competition in the bidding process – From absence of public notice for the invitation to bid,
low access to pre-tendering phase, or low confidence in the procurement process
2
Evaluation and award criteria not objective, complete or announced in advanced – Government
officials who fail to clearly announce tender offers, fail to share key bidding information with all
bidders, or fail to create tender offers with objec tive and clear evaluation and award criteria
2
Bid tailoring – Contract details and evaluation crit eria tailored to favour a specific vendor
2
Low contract standardization – Narrow contract evaluation criteria and requirements that disqualify some vendors
from participation
2
Vendor track-record fraud – Deliberate misrepresentation of vendors’ track record, capacities and
qualifications
2
Vendor eligibility exceptions – Exceptions enabling vendors with poor track records or qualifications
to compete
2
Low tracking of vendor history and past performance – Low vendor performance tracking that
enables repeat participation by corrupt or low-performance vendors
2
Bid price collusion among vendors – From weak confidentiality in the bidding process
2
Conflicts of interest – Public officials who select vendors and receive campaign financing or other
benefits from them; frequent close relationships between regional vendors and political leaders such
as a mayor or senator
2
Subcontractors or partners chosen in a non-transparent way – Without accountability of performance
from those selected
64

65. 2
Unclear payment flows with subcontractors, allowing for bribes – Frequent bribes paid by the
subcontractors and small and medium-sized enterprises (SMEs) involved in a contract rather
than the tender-contract winner itself
2
Vendor failure to disclose accurate cost or pricing data – Inaccuracies resulting in invoice
markups or “channel stuffing” after vendor selection
2
Poor contract price “benchmarking” practices –Government agency use of an unreliable
service reference-price benchmark, sometimes referring to the same one or two pricing
benchmarks that do not accurately reflect the service price
2
Low transparency in price benchmarking sources
2
Too few or no price benchmarks listed or employed
2
Contract price overestimation with exorbitantly high price benchmarks that enable the tenderer to
accept exorbitantly priced contracts
2
Abnormally low bid offers from vendors to win bids, followed by incomplete contract fulfilment, default
from contract or vendor failure to fully pay subcontractors
2
Decisions made and reviewed by only one person – Failure to uphold the “four eyes
principle”
2
Inadequate records – Delayed, incomplete or inaccessible records of vendor selection and
procurement process
2
State-level or national auctions that require very high operational and financial capacities –
Favouring established, large-scale producers and hurting competition
2
Low investigatory capacity – Of national monitoring and oversight institutions
2
Manipulation of records – In paper-based, non-digitized procurement systems
65
Corruption in public procurement: Bidding and bid
evaluation phases (contd)

66. 66