Towards A Competitive Malaysia #24

Chapter 5: Consequences of progress and Prosperity (Cont’d)

Personal Price for Progress

“How are you gonna keep ’em down on the farm after they’ve seen Paree?” goes the old song. For the previously illiterate, their world is irrevocably changed once they have been taught to read and write. There is no turning back. It is as if the coconut shell has been lifted off, the world opens up and everything looks different.

Progress means change, although not all changes lead to progress. Change means leaving the comfort of the status quo, and that can be distressing. It means leaving the familiar for the unfamiliar, the comfortable for something that is not certain. Even if it would be for the better, it would still be the unknown and the unfamiliar.

Once they have been taught to think critically and be independent, you cannot control them anymore. To some, that is liberating; to others, frightening and threatening.

We educate our young and send them to excellent schools and universities to get a world-class education. That is good and what we all aspire for our children. Most will then follow the expected path: come home, serve the country, marry the boy or girl next door, and their parents will have the grandchildren nearby to indulge. A few may stay abroad, marry a foreigner, and have a totally different worldview. Expecting them to come back to the old village and pay due homage to the local lord would be too much.

Gender equality is great and the right thing to do; we should give women equal opportunities so they could fully express their potential. There are however, unavoidable correlates: delayed marriages or none at all. When they do get married, they have fewer children or settle far away. Greater social and physical mobility is part and parcel of progress.

Many of the changes may not be inevitable or may represent only temporary trends. In America, there is a reversal of urbanization; many are forsaking the big cities for smaller towns or life in the country. Advances in ICT enable writers, programmers and other professionals to work from their homes. This trend of “beyond the sidewalk” is not temporary but is definite and growing, like the phenomenon of fertility transition.

Anticipating these changes would enable us to make the necessary preparations to mitigate their negative impact. I do not expect my children to live nearby or to take care of me in my old age. They have their own careers and young families to care for, thus I must plan for my own old age arrangements. Society too must be prepared for such changes as with Scandinavia with its public childcare centers and America with its retirement homes and communities. These dislocating changes should not be the excuse for us not to partake in progress, rather the challenge to come up with novel solutions.

Moral Consequences of Growth

The Harvard economist Benjamin Friedman in his book, The Moral Consequences of Economic Growth, posits that there are positive moral consequences to economic growth, quite apart from the enhanced material benefits. Economic growth helps us clarify what is right and wrong, and steers us towards the right path.15

This may surprise many. We equate economic activities especially the capitalistic variety with being materialistic, a thinly disguised euphemism for immoral. Thus we hear such silly arguments in the Third World about being materially poor but spiritually (and morally) rich. Friedman’s argument is that such a dichotomy is patently false.

He comes to this conclusion from studying past and present societies during periods when they had economic growth as well as difficulties. As a timely caution, he studied primarily Western societies since the Age of Enlightenment. Nonetheless his insights have universal relevance.

It should not be surprising that the landmark American Civil Rights legislations took place at a time of economic prosperity. It is at such times that citizens are more tolerant, more charitable, and more respecting of diversity and those different from themselves.

Friedman also observes the opposite. The rise of anti-immigrant sentiments in America, beginning with the anti-Irish and anti-Catholics in the late 19th century to the later anti-Jewish, anti-Blacks and currently anti-Hispanic, while not exactly coinciding with economic cycles, nonetheless were related to the general populace’s perception of their declining well being. The recent rise in “nativist” sentiments popularized by the likes of the Republican Presidential candidate Pat Buchanan is attributable to the general perception that America is on the economic decline caused by foreign competition and outsourcing of jobs offshore.

This also coincides with the increasing income inequality of Americans. The year 2004 marks the fifth consecutive time that the wage of average Americans has not kept up annually with inflation. This is not just a statistical abstraction; many Americans have difficulties making ends meet despite the economy expanding briskly for the past five years.

Friedman’s point is that there must not be just economic growth but one where the benefits would accrue broadly and not simply piled on those already at the top. It is only when a wide section of the populace moves forward, perceive that they are doing so, and most importantly, confident that they will continue to move forward, would the positive moral consequences be most pronounced.

It is not the level of income that is important, rather the progress. The positive consequences are seen even if the country were to begin from a very low level. This is relevant to developing countries. They do not have to wait until their income levels match those of the First World to experience the positive moral consequences of growth.

America, despite its current affluence, risks regressing in its moral values if the bulk of its population perceive themselves as sliding backwards. Developing countries risk descending into perpetual instability if it does not grow economically.

A dramatic demonstration is to compare Ghana and Thailand. In the 1950s and 60s, Thailand was very much like Ghana today, mired in political instability with one military coup after another, matching the regularity and devastation of the monsoons. Ghana was relatively rich and stable, supported by its strong economy based on cocoa and minerals. Unfortunately with time, its leader Nkrumah held on to power way past his due date, and the country deteriorated with his increasing incompetence and corruption.

Today Thailand, like many Asian nations, is enjoying economic growth. It is successfully transiting to the next stage of development based on trade and manufacturing, and away from agriculture and commodities. It has been a long time since Thailand suffered a military coup. Even its recent political crisis over the elections was settled without the intervention of the military, a significant milestone.* Meanwhile Ghana’s economy has been on the skids for decades. With the price for its commodities plummeting, its economy declining, no wonder it is suffering through one coup after another. Economic stagnation placed Ghana and others like it in a perpetual “coup trap.”

It is estimated that a doubling of per capita income would reduce the probability of a successful military coup by between 40–70 percent. Another good reason for emphasizing economic growth!

Friedman’s insight is encapsulated in the Malay wisdom, Kemiskinan mendukuti kefukuran (Poverty invites impiety). A visit to poverty-stricken Indonesia will quickly remind us of this brutal reality. There is little tolerance or charity there, the poor citizens are desperately clawing their way to survive.

In the 1960s, Malaysia experienced sustained albeit unimpressive economic growth. That growth however was uneven, with the bulk of the population 1 deprived of the prosperity. When this economic inequality also paralleled racial and cultural divisions, or what the Oxford economist Frances Stewart calls horizontal inequities, it made for an explosive mix.16

With progress now much more evident, and more importantly enjoyed by the bulk of the populace, there is greater tolerance. Malays are now better able to put up with and ignore the inflammatory racial utterances and provocations from the likes of Lim Kit Siang. The impressive economic growth of the past few decades is responsible for this remarkable turn of attitude. If only the PAS-dominated states of Kelantan, Trengganu and Kedah were to enjoy economic growth comparable to the rest of the country, then those Malays too would not be easily taunted by the tribal theatrics of a Karpal Singh or Lim Kit Siang.

The horizontal inequality of the past is today replaced by the equally dangerous vertical inequities especially among Malays.17 Again, this is reflected in the deepening polarization of Malays.

Economic growth creates its own set of conflicts. In the 1980s, there were ugly demonstrations and diplomatic sniping over America’s growing trade deficits with Japan. Today we see the same scene repeated with China. In Malaysia, there are now loud rumblings among Malays over the NEP, which was once universally accepted.

Despite the impressive economic growth of the past two decades, there are still pockets of intolerance in Malaysia. It is not surprising the most intolerant Malays reside in the poor states of Kelantan, Kedah, and Trenggannu. Even among the intellectuals, we see this pattern. The most chauvinistic Malay intellectuals are found at University Kebangsaan and International Islamic University. These two campuses emphasize disciplines that have limited value in the marketplace (the liberal arts, especially Malay Studies and Islamic Studies). Those intellectuals are being rudely reminded daily of this reality. Malay professors in the science oriented Universiti Putra and Universiti Teknoloji have skills that are highly valued by the market. They have a decidedly different worldview. If they cannot stand the oppressive academic atmosphere, they can always opt for the more lucrative private sector. This luxury is denied their liberal arts colleagues of the other campuses.

For a racially and culturally diverse nation like Malaysia, economic growth serves more than just to bring prosperity to the citizens. It engenders greater tolerance, charity, and respect for the differences amongst the citizens. Economic growth is therefore an imperative.

In Part Two, I will examine in greater depth the essential building blocks—the four elements of my Diamond of Development—as they pertain to Malaysia.

* Unfortunately as this manuscript was headed for the publisher, Thailand had a military coup on September 20, 2006. Fortunately, it was a peaceful, with no one killed. Although the Thai economy had recovered from its 1997 meltdown, nonetheless significant regional and other inequities persist. Friedman’s thesis still holds.

Next: Part II: Basic Building Blocks and Chapter 6: Great Nation, Great Leaders