Towards A Competitive Malaysia #38

Chapter 7 People: Our Most Precious Asset (Cont’d)

A Bigger Fish Story

I could make this fish story bigger; the story, not the fish. Consider a leader determined to redeem his tribe’s reputation or fed up with his people being the butt of fish jokes for their ineptness. He wants to turn his people into super fishermen and women, and recruits experts to teach them. Everyone must devote so many hours a day to that activity. He would supply them with the latest and most expensive fiber optic rods, mechanized reels, and high-tech lures. Those who do not bring in their quota would be punished, while those who haul in the trophies would be rewarded with honors and prizes. Soon the tribe would duly be recognized as the best, and with it the bragging rights and the smug claims on the innate ability of their people, the superiority of the culture, and of course their enlightened leadership.

Meanwhile the leader of another tribe was not interested in such competitions and bragging rights. He was more concerned that his people have enough to eat (be it fish or vegetarian diet, he could not care less) and that their individual talent be fully realized. If one is an inept fisherman but could instead produce delicate woodcarvings, let him be. He could trade his carvings for fish anyway; that would be his choice.

As that tribe was not obsessed with fishing, its members were free to pursue their individual passions and dreams. The guy who could not figure out which end of the rod to put in the water may have a passion for science. A few years of tinkering in his laboratory, he came up with the idea of fish farming. He now feeds not only his tribe but also the whole valley. Now he could match the trophy catch of the star fishermen of the other tribe by merely scooping his net into his pond instead of spending hours casting his rod. Others may scoff at his “fishing” skills, but he puts fish on the table, where it counts.

The lesson is clear. The first leader is concerned primarily with winning the fishing derby and the associated bragging rights, and only secondarily to ensuring that his people have enough fish to eat. He could not be bothered on whether their individual talent were fully realized. The second leader is not concerned with trophies, only that his people have enough fish by whatever means (fishing, fish rearing, or buying it from others), and for his people to develop their potential and pursue their dreams.

It is for this reason that I am not enamored with leaders who subjugate the talent and dreams of their citizens in the pursuit of some national agendas and priorities. The only agenda and priority should be that the people be given the fullest opportunity to develop their talent and pursue their individual dreams.

Application to Poverty Reduction

This concept is applicable to such important issues as poverty reduction. A proven poverty-reduction strategy is through increasing economic, especially trading, activities. Going by my earlier thesis, it would be best to focus on the midlevel first, then the high-end, and lastly, the bottom layer.

The high end of business activity would be encouraging the creation of publicly listed and other large corporations, followed by professional firms like those of lawyers, doctors, accountants, and engineers. The middle would be to nurture enterprises like restaurant operators, sundry retailers, car mechanics, electricians, and plumbers. The bottom end would be the hawkers, peddlers, and others that are normally part of the informal sector or underground economy.

In encouraging Malays to partake in business activities, it would be best if the bulk of the resources and efforts were expended on the mid-level business enterprises. We could for example train sufficient number of Malays to be chefs, carpenters, electricians, plumbers, and car mechanics to meet not only the needs of industry but also enough that some would venture out to start their own enterprises. Petronas could then give its petroleum retail station franchises to certified mechanics so they would be able to repair cars in addition to selling gasoline. That would be a natural fit. The government (through MARA) could also give these trained individuals seed money to start their businesses.

At the next level, the government could train enough professionals like doctors, lawyers and architects so some of them would venture out on their own. A few of the engineers would then start their own engineering or construction firms, and the doctors their own clinics. If we train enough Malays in agriculture or animal husbandry, and then give them the necessary support like land grants or loans, they would quickly revolutionize the farm sector. It would certainly be more effective and likely to succeed than simply exhorting our poorly educated peasant farmers to modernize themselves. They cannot, as they are incapable of doing so because of their lack of knowledge.

The highest level would be the major corporations. Again here, as with pouring help on the super fishermen, the impact would be readily visible. A new big factory would instantly employ hundreds, making an immediate significant contribution to the local economy. It is not surprising that governments would go all out to attract major corporations through giving preferential tax treatments and other incentives. In reality however, the aggregate employment and economic impact of such major corporations are less than the mid level enterprises. Malaysia goes further than merely attracting major corporations; it goes directly into businesses by creating its own GLCs and employing Malay professionals to run them. That effectively turns them into hired hands (albeit expensive ones) rather than true entrepreneurs and businessmen. Often, through political patronage or outright corruption and cronyism, they are professionals and executives only in name. They spend more time at UMNO meetings and schmoozing with political big shots than in the executive suites of the companies they manage.

A more effective approach would have been for the government to ensure that the investment climate is attractive and that there are profits to be made. Who cares whether the companies are local or foreign owned as long as they treat and pay their workers well and contribute to the economy? If an entity other than the government were to own the enterprise, the economic impact would still be the same. Besides, the government could now use those funds for education, healthcare, and other social investments.

If the government were to be involved in commerce, it should only be as a source of venture capital, inviting enterprising Malays with sound business proposals to apply for funding. Like a true venture capitalist, the government would take only partial equity ownership, with the purpose of eventually selling it and reaping the profit and starting the cycle again. The entrepreneurs would put in their skills and efforts. That would ensure they would be prudent in their business decisions and pay more attention to their enterprises.

The last would be to encourage small petty businesses at the other end of the scale, the single and “mom and pop” operators like the satay and goring pisang hawkers and fishmongers. The cost per individual would be very small, a few hundred or thousand ringgit, enough for them to buy their supplies in bulk and effect considerable savings.

At another level, the government could build the necessary infrastructures to help these hawkers. The British introduced the “wet markets;” every town in Malaysia has them. They provide essential public (consumer) services as well as sources of employment. Visit any Malay village or urban community, and there are the typical pasar minggu (weekly market). These are potentially fruitful training grounds for Malay traders. MARA should build permanent structures so these hawkers could expand their trading days to two or three times a week, or even daily.

I do not underestimate the economic role of these micro enterprises. Muhammad Yunus, the Bangladeshi economist, with his Grameen Bank, uplifted hundreds of thousands of peasants from poverty through his micro credit lending to village peasants to do such simple things as buying sewing machines and supplies for weaving.1

While Malaysia spends billions on GLCs, it has no funds to build a market in Gombak, a predominantly Malay area of Kuala Lumpur. Those budding Malay traders have to contend with makeshift premises. Prophet Muhammad (pbuh) purposely built many such stalls in Medinah so as to encourage Muslims to trade. He did not charge those traders to use the facilities, an early acknowledgment of the responsibility of the government to provide for such basic infrastructures. You can bet that the entrepreneurs produced through such activities would be more enduring and productive to the economy than the likes of such state-sponsored corporate tycoons as Tajuddin Ramli, hitherto of Malaysia Airlines. Those entrepreneurs would also be considerably cheaper and easier to produce, and their contributions to Malay society would be far more valuable and enduring than those puffed up moguls.

Next: Shared Malaysian Identity