A+ | A- | Reset
Home arrow The Blogs arrow Letters/Surat arrow The Malaysian Economy – What can we do?

The Malaysian Economy – What can we do? PDF Print
Saturday, 15 March 2008 11:09

Like all things, it is easier to criticise than to perform. This is an occupational disease that afflicts an opposition which is too long in opposition.

Since I have criticised the Malaysian economy as top heavy and structurally dangerous , may I also offer some small suggestions as to what can be done to correct this structural “defect”.

I hope we can move forward bravely and not hold back for fear of odium to name and reputation (not that I have any name or reputation in this matter but this is by extension to the new govts now controlling several states) if we fail.

Marx, when he identified the workers as the proletarians, also mentioned an even lower class – the lumpen proletarians. It is this group of people that I wish to discuss. At least the workers have reasonably stable roles in an economy (if not stable jobs). The lumpen proletarians have no real role at all. They are the dregs and outlaws of society because they are economic outcasts. Without any economic life, people also lose their social lives. They cannot get married or have children or lead normal lives because they have no money. They cannot fit into any organised civilised society. Perversion and want is their normality.

Unfortunately the modern world has created lumpen proletarians of even ordinary kampong folk. In S. Thailand, there is a phenomenon they call “kratom” which is actually a Malaysian export. In Malaysia it is call “ketum”. It is a cocktail of  boiled daun ketum, coke, cough mixture and insecticide (yes, insecticide, you did not read wrongly) and is drunk to get a high. There are no accurate statistics, but people say at least half of young people are involved in the habit on a regular basis. Unemployment, stagnation, boredom, despair and self-hate are the causes. They have no economic life, so they lose their social lives and become “kratom” addicts. Kratom works slowly. Bodies and minds waste away ever so slowly.

How is this related to Malaysia and our topic? For one thing, it is a Malaysian “export” to Thailand which means the phenomenon is already established in Malaysia – only people don’t want to talk about it. For another, modern economies in the 3rd world tend to create a giant pools of lumpen proletarians and we are not excluded.

It is easy to talk about being competitive and dynamic, but it is real life-and-blood people who pay the price in terms of non-life-sustaining wages and huge pools of desperate unemployed. International production is so efficient and so competitive that local economies all over the 3rd world are made redundant. Even rice growing is super-specialised and we are not competing successfully with Thailand, Vietnam and the Philippines. Don’t even mention cars.

Before you rich middle class guys laugh about it and say it is not your problem, you should know that your children are also being turned into lumpen proletarians even before they become old enough to enter the workforce. Boredom and lack of any responsible role has the same effect in young bodies ripening with potent hormones as lack of economic life and chronic unemployment in adults. Popping ecstasy pills is the result for rich young lumpen proletarian wannabes.

Modern economies and modern societies have created the phenomenon of overworked, harassed and underpaid employed persons with little time for social life on the one hand and a pool of economically unused persons without any economic and therefore suppressed social life on the other. We need to change this and build a strong local economy that is able to support our relatively large population and find a meaningful role for “unused” persons and integrate them back into society.

In Malaysia, even as we slowly lose our social lives and become strangers in the crowd, our racial separateness makes this worse. We have become stunted socially, culturally and economically. Even for a few rich Malaysians, social and cultural life is limited to going to the malls. This is supposed to be fulfilling and character building. On the outside some may look like they are the beautiful people, but inside they are more like the thin half-naked creature in the Lord of the Rings that half crawls and half walks. They are Jekyl and Hyde characters in the making.

Economic life and social life are inter-related. A rich social and cultural life creates economic opportunities while economic well-being opens up the horizon for a more sophisticated culture and social life. The closer this inter-relationship, the more efficient a society becomes. There is less waste as opposed to cultural activities that offer opportunities to businesses that do not fit well into the total mish-mesh of mutually supporting economic activity

For example, a society that is hedonistic has social and cultural lives that support sin industries of gambling, alcohol consumption, and prostitution. Such a society is efficient because the social, cultural and economic activities match. However such a society must also expect to live with drugs, depravity, gangsters and violence.

On the other hand, a society that is strict and puritan may not be able to generate a high level of economic activity because social and cultural life is basic and disciplined. Such a society is also efficient, but must expect to be poor.

Malaysians must know where to strike the balance. Having the wrong mix of the two may have strange and unwanted effects. The main problem is to have a local economy that can sustain the whole population in a healthy and constructive way and to have that healthy society keep the local economy humming and active. To be able to keep city centres healthy and active instead of slowly getting run-down and decrepit. To keep gangsters and anti-social elements at bay and to involve as many people as possible in healthy mutually supporting economic and social life and that does not need a massive police force to control the conflicts and contradictions. To remove fear and suspicion from society. This is the challenge.

Placing total emphasis on all things foreign including our self-respect, social and cultural life, values, traditions and habits as well as our economic livelihood is going the Singapore way. They have been successful – let’s be clear about this, but can we follow the same route and use the same model of development with equal success? I think not and we’d be foolhardy to try - as we did on a number of occasions and continue to dream of doing.

We need to wean ourselves away from a foreign orientation in order to give the locals a fighting chance. Respect and high regard for local things should be encouraged. This encourages self-respect and reduces self-hatred. A foreign orientation also mean buying foreign things, using foreign gadgets and trying foreign clothes and styles. This reduces opportunities for the local industry.

I do not advocate xenophobia and I do not advocate stopping the search for FDIs, but we have become too much in love with things foreign. In addition to searching for FDIs, I advocate learning (and expropriating!) things foreign that make us more competitive and more skilled, but avoiding those that make us lose our self-respect and forget who we are. This is easier said than done. A free press will help a  lot in expanding discussion and debate on these matters, so that the rakyat can make intelligent choices.

I suspect even the foreigners will approve. As in tourism, they are eager to go to places that are exotic and strange, but once these places become too service-oriented and try to put on white faces on Asian bodies and use false western accents, trying to become more western than the westerners – I think even the westerners can see that this is demeaning and is off-putting to all except the most depraved.

Economic activity arise from active, creative and dynamic human activity. All these form a virtuous cycle. Unfortunately Malaysians have been repressed and divided for too long thus breaking the virtuous cycle. This represses the local economy and favours UMNO stewardship and control. We know where this has led us. We have won political power in a few places. Give back the whole social, cultural, intellectual, spiritual and economic power to the people! There is so much to do to correct 50 years of misrule. Opposition leaders – please don’t waste any more time.

 

By batsman


Comments (15)Add Comment
...
written by Flex Tan, March 15, 2008 11:29:03
BATMAN,

SINCE THE MAJORITY RAKYAT STILL BELIEVES IN BARISAN NATIONAL MANAGING THE FEDERAL GOVT (WHOLE COUNTRY)... LET BN CRACK THEIR HEADS.

AS FOR THE BR STATE CONTROLLED AREAS (LOCALISED), IT'S UP TO THEM TO RUN THEIR STATE.
report abuse
disagree 4
agree 3
...
written by temenggong, March 15, 2008 11:33:18
It is the malays that are the lumperproletariat. The stress on islam has made them such. What stands between malay society and its transformation into a vigorous, vibrant and successful malay society is islam! That religion has subdued a race into mediocrity, a lumpernproletariat. Let the malays figure this out.

Or,

The short answer to reform is simply to have an FTA with the US, and throw open the country to investment and tourism. Remove all the NEP restrictions on the listed companies.
report abuse
disagree 4
agree 7
...
written by Stormquest, March 15, 2008 12:36:03
The NEP, while having some good points, has been very much abused to the point that it has profited only a few people, but has left everyone else in the luch. The poor Malays remain poor, while select UMNOputras have become richer. The non-Malays have in the meantime, paid a very heavy price for it in terms of jobs, business, education, homes, etc. I dare say that it has even created poverty amongst some minorities, as they do not get equal access to job opportunities.

The way the NEP was implemented was grossly unfair, and did not serve to unite this country. The abuse of the NEP is in fact the cause of disunity.

Whatever economic policies are adopted, it must unite the country, create a true spirit of Malaysianess and belongingness to the nation. It must eradicate poverty, and stimulate the economy so that Malaysia is a competitive and vibrant nation internationally.

I believe in meritocracy. This is absolutely necessary for Malaysia to be competitive internationally. However, true meritocracy can only exist in a level playing field. Unfortunately, 50 years of BN rule has not resulted in a level playing field. We would still have to contend with subtle, but informal racism that exists in the workplace, even if the NEP is removed. This includes subtle, discriminatory hiring practices. No advanced multiracial country is free of that. Given this countries such as the United States adopted a meritocracy-based equal opportunity system where the best person is still chosen for the job, but is not automatically disqualified on the basis of race, religion, sex, age, looks etc. I believe that this system strikes a balance between what is needed to compete internationally, while creating a more level playing field for all Malaysians. Needless to say, this must be legislated.

What about people who are jobless or don't have the skills to compete? Why not establish a welfare system to help people get back on their feet? Why not divert some of that Petronas money from wasteful megaprojects to start this? Ofcourse, there has to be checks and balances in the system so that it is not abused by recepients and not subject to corruption from those who administer such aid. Provide skills training for such people.

But the above is just for people seeking jobs. What about businesses? We really need home grown industries to achieve self-sufficiency. We need to cut foreign dependence. We need to engage in R&D so that we as a nation can stand on our own two feet. We need to develop a culture of creativity and inventiveness. And such inventions should be marketable. There are Malaysian companies who have developed home grown inventions, but because of a lack of funding or bureaucracy, or that favorite kickback unfortunately hinted at as part of the abused NEP, the products remain on the shelf gathering dust.

Why not establish a Small Business Administration to help any budding entrepreneur irrespective of race, religion, sex, age, etc? They can provide training, microcredits, etc.

How about extending microcredits to people to help eradicate poverty, and start up businesses? Isn't this what Professor Muhammad Yunus (Grameen Bank) did in Bangladesh. It was his system of extending microcredits that helped him win the Nobel prize for helping poor Bangladeshis out of poverty. Why not extend the concept to the kampungs and to squatter parts in urban areas? This will take care of the "lumpen proletarians". It will not only increase their self-esteem, it will also keep them away from social ills.

These are some ideas on how we can help develop a more competitive, self-sustaining nation, while creating create a more level playing field for all Malaysians, irrespective of race, religion, age, etc.
report abuse
disagree 0
agree 12
...
written by Chuang Tze, March 15, 2008 12:56:11
Too much of Malaysia's economy is based on the old rent-seeker mentality. One thing TDM emphasized during his tenure as PM was that Malaysia needs to "plant & grow" technology and R & D is a must in order for Malaysia to have its own pool of IP (Intellectual Property) from which to build home grown industries on. On this point, I have to agree with him.

The TFP (Total Factor Productivity) for Malaysia must be increased and we must work consciously towards this goal if Malaysia is to develop into an economic power to be reckoned with. This is where with a higher TFP, a nation's sum of the output is far greater than the sum of the inputs. Sadly, our TFP was recently measured and was close to 1.

This is fundamental to a strong, self-sustaining, and long term viable economy. FDI's etc. are just short term "patches" and not a long term solution.

The MSC was one such initiative, but very poorly implemented.
All the cronyism diverted the MDC or MDEC now, from the objective.
report abuse
disagree 0
agree 5
...
written by Sunnysoul5, March 15, 2008 13:48:41
The Look East Policy was a strategic blunder because of the failure to help the “lumper proletariat” get out of the safety need to the social need. We may have benchmarked against a wrong social economic model like Japan simply because of two very drastic differences in national and social infrastructure. Malaysia is rich in resources and under developed landmasses, whereas Japan lacks the natural resources. Japan is having more or less one race and one religion. Malaysia has multi-racial multi-religion and multi-lingual challenges.

Many decades have been wasted in terms of wealth generation through value adding on the natural resources. The social economic development model was to a large extent government driven and policies were changed to suit the situation. Should value-adding manufacturing was given priority, then oil & gas, crude palm oil, rubber and others can be processed with down stream activities that can probably create a lot of employment and economic growth without having to depend on the Foreign Direct Investment (FDI).
This serious strategic misadventure costs Malaysia, to a large extent, the bright future.

The other blunder could be the focus on mega projects where billions were used to try to impress the world in form but not necessarily in matter. These billions could have been used to send the top students, irrespective of race and religion, to the top universities of the world to gain the knowledge and experience for strategic human resource development. Many projects become white elephants and benefited some cronies and encourage corruption.

Agro-based industries were ignored for more than two decades, making it necessary for the nation to depend on imports to provide the food and beverages for the people. Malaysia could well be self sufficient in terms of food but then again it was a strategic error staring at us. It takes many years to cultivate in agriculture and may require new methods and technologies. The main challenges are for the Malaysian to accept the fact that we have to go back to agriculture to earn a living. The nation was concerned with producing paper qualifications for engineers and scientists who may not be suitable for agriculture. These academically qualified graduates may not be able to be effective professionals as well because the curriculum was too theoretical and not in line with the industry needs.

report abuse
disagree 0
agree 6
...
written by Sunnysoul5, March 15, 2008 13:49:23
The NEP did not benefited the poor bumiputras to a large extent, and instead produce many overnight tycoons through cronyism, nepotism and corruption. The bumiputras in turn did not speak up for more than two decades due to the lack of freedom and opportunities to voice their frustration and dissatisfaction with the NEP system of “fast-tracking” and “invited tenders”. The 2008 General Election was the right time as the caretaker Prime Minister asked the voters to express their decision through the ballot paper. The voters were divided 50:50 and resulted in 5 states and KL fallen into the hands of the BR representatives, as well as denying the BN of the 2/3 majority in parliament.

It is time to encourage private sector driven economy by giving fair opportunity to the competent parties to participate in social economic development. There shall be with the condition that the successful enterprises contribute part of their profit to the professional managed foundations to address various initiatives to eliminate poverty, education and other developments. This is more in line with the social capitalist development model.

The mainstream politics must then begin to introduce severe punishment for the people involved directly and indirectly in corruption and corrupt practices. Capital punishment like in China is not working well because people with greed may take the risk and prepared for the worst-case scenario. One way that can happen is to have open tender as well as details of the tender and contract. If there is any manipulation or unusual mark-up in prices then with public scrutiny, the culprits can then be uncovered. Remove any act or law that are meant to cover up misdeed through openness, transparency and information.

Malaysia is going through the initial stage of renaissance, and if the people and right-minded governments work hard to weed out corruption, then Malaysia can regain the competitiveness without a doubt.

The first tsunami has taken voters and politicians by surprise, so it is understandable that the BR politicians were not ready for the windfall. In a short one-week, the BR politicians seem to be able to get their act together. As long as they can avoid the temptation of power associated with money (I million is too small, and 1 billion is not big enough), greed (to fulfill the quota of having 1 wife and multiple concubines), corruption (not 2% but many times marked up), big cars (some of them may have 8 or 10 of them), big houses (not just in Malaysia but different parts of the world), helicopter or private executive jet.

Tok Guru Nik Aziz, Anwar, Lim Guan Eng, Tan Sri Khalid and other BR leaders must be able to provide the leadership by example, to inspire the voters and people the humble, righteous, and peaceful way of life. Humility, sincerity, honesty,

There is no one sure way of social and economic development, but if the government of the day can work together with the people then there is a better future for everybody.

We have enough intellectuals and experts in Malaysia who can contribute positively to the social economic development for a better Malaysia. Give these Bumiputra and non-Bumiputra expertise the chance to contribute to the future of Malaysia, and we can begin to see the subtle impact. This way the nation can save millions if not billions in terms of consulting fees paid to foreign firms.

Long Live Malaysia!

report abuse
disagree 0
agree 3
...
written by hiro, March 15, 2008 14:00:23
The BN will have no choice but to undertake reform. Otherwise, in another 5 years, the Opposition coalition will render them obsolete at the Federal level.

Amongs the chief things they have to do is to start having open tenders. This coupled by an independent judiciary and anti corruption agency will go a long way to gaining investor confidence. Our capital market is already moving forward and the rest of governmental agencies must catch up quickly to provide the necessary support system.

In the states, the Opposition will show the way by being incorruptible, having open tenders, and being transparent. They will also show the way by letting democracy, and freedom of expression to flourish.

I believe we all should try to avoid seeing the wood for the trees and focus on the big picture. The big picture is that the opposition coalition's victory has gained support from the investing community because for them, it is healthy for there to be a system of checks and balances.

Good things are coming our way. We only need to be patient with occasional teething problems that may surface as the opposition parties learn how to deal with each other at increasingly micro levels, stay objective and wisen up to any attempt to distabilise inter-racial relations.
report abuse
disagree 0
agree 4
...
written by Jeevan, March 15, 2008 15:08:03
Batsman,

To wake people up, you have to scare the living daylights out of them. Go to The Daily Reckoning website by Bill Bonner, there is enough stuff there.

As for us here, its time to become as self sufficient as possible. Tapioca in the backyard, chicken coops, less shopping for luxuries, drive when necessary, walk or cycle the rest of the time. More reading, less TV, conservation of water, recycling, supporting local businesses, local fruits, you get the drift..

As for macro, only one formula has proven to work in all conditions, Boom or Bust, and it's only four words so that even politicians can understand them.

Low Taxes, Stable Money.

cheers
report abuse
disagree 0
agree 5
...
written by batsman, March 15, 2008 16:18:52
Thanks guys for your ideas and thoughts. Appreciate them

Temenggong - have you forgotten Hindraf so quickly? What about the Chinese boys who sell pirated DVDs at every street corner - are they invisible to your eyes? You are so much against suicide bombers and terrorism, yet by your comments you seem to be very eager to buy them the jackets, explosives and detonators.
report abuse
disagree 0
agree 1
...
written by batsman, March 15, 2008 18:56:08
Dear Jeevan - TQ for your input. However pls bear in mind that there are economic policies that work for rich countries and those that are supposed to work for poor countries. Your formula works only for rich countries where people are rich enough to pay taxes. This formula applied to a poor country just increases the gap between rich and poor. In Malaysia this gap is wide enough as it is.
report abuse
disagree 0
agree 1
...
written by batsman, March 15, 2008 18:59:41
Dear Hiro - I wouldn't make such bubbly predictions just yet. 4-5 years is a short time to do a good job, but a very, very long time to screw up.
report abuse
disagree 0
agree 1
...
written by batsman, March 15, 2008 19:02:03
Dear Hiro - just to give you an idea, I think I have aged a few years just in these few days.
report abuse
disagree 0
agree 1
...
written by teo siew chin, March 15, 2008 21:49:41
the rakyat must be empowered.
the regular joe, ah lee and ahmad must be made to feel needed in nation-building
the hardcore poor really do require help - arm them with simple skills to survive -sponsor them with small plots of land, stalls, businesses
sponsor adult-learning, free for the hardcore poor
rebrand the NEP - help ALL who are poor
it may seem to benefit the malays more but let's face it, more of the malays are poor
those who are in the police force - give incentives for cases solved and solved fast
those who are in the armed forces, do not waste their resources, have them do community services and reward them accordingly

so much of human resources are available
instil in them the rewards of good honest decent hard work
instil in them the need to improve, progress
make them proud to be self-reliant
make them proud to be a new-age malaysian
proud to be part of the glory of building a nation worthy of praise in the eyes of the world


POWER TO THE RAKYAT !
report abuse
disagree 0
agree 1
...
written by batsman, March 16, 2008 21:19:07
The local / domestic economy suffers if people are fearful and suspicious of each other. Their social life and cultural life is stunted. Domestic economy cannot do well under these circumstances. Just look at 3rd world countries - when there is conflict and strive, the domestic economy suffers. If there is terrible conflict and strive, there might even be famine because farmers are unwilling to waste time planting crops.

People must be happy, socially and culturally active for the domestic economy to thrive. They must be secure and not worry that their whole life will be ruined by bullying and robbery - whether legal or illegal, whether written into the constitution or not. If people are unhappy, the domestic economy can never thrive!
report abuse
disagree 0
agree 0
...
written by Jeevan, March 16, 2008 21:21:11
Ta Batsman,

The stable money part refers to a move away from fiat currencies into a gold backed one such as the dinar. The low taxes is for businesses to be charged a flat rate preferably in the high teens to low twenties to keep success rates high. It can apply to all economies, rich or poor.

cheers, good job by the way.
report abuse
disagree 0
agree 0

Write comment
This content has been locked. You can no longer post any comment.
You must be logged in to a comment. Please register if you do not have an account yet.

busy
 
< Prev   Next >
 
Some Images Hosted With
Thank You ImageShack!
 BLOGGERS AGAINST ISA

Powered and Optimized for:
Malaysia Today by MT-TEAM