Towards A Competitive Malaysia #76
Chapter 11: Learning From Our Successes
Economic Growth with Equity
Another remarkable achievement, widely lauded, is Malaysia’s success in achieving economic growth with equity. Accomplishing economic growth alone would have been quite a feat, but to have that growth distributed equitably was a double bonus, especially for a plural society like Malaysia.
Many countries had impressive economic growth but few did it as equitably as Malaysia. China has enviable economic performance but struggles to correct its obscene ethnic, regional, and social disparities. Such glaring inequities are dangerous and de-stabilizing. Besides being morally and socially unacceptable, they could also impede future growth.
A concerted effort at both economic growth and redressing inter-racial inequities began with Tun Razak in the 1970s, and greatly expanded under Mahathir in the 1980s and 90s. There were hiccups along the way, the latest and most severe being the 1997 economic crisis, but the thrust of the policy remains intact.
Unbridled free enterprise and trickle-down theory works well only in the sterile world of econometric modeling. In practical life, there is a role for governments to ensure and encourage that the wealth not only trickles down but also spreads sideways across racial and social boundaries (Frances Stewart’s vertical and horizontal inequalities).
Malaysian leaders recognize the self-evident fact that wealth must first be created before it can be redistributed, hence the focus primarily on wealth generation and only secondarily on its redistribution. This insight may be obvious but it is remarkable that it escapes the thinking of many.
It may be argued that Malaysia would have performed better economically had it not be concerned with social and racial equity, or that these inequities would best be solved through economic growth alone. That may well be, but as had been painfully demonstrated in 1969 in Malaysia, and in many parts of the world today, glaring inequities can be downright disruptive, destroying whatever gains that had been achieved.
The dilemma Malaysia faces is whether policies designed to ensure equity a generation ago is applicable to and effective with today’s realities. Then it was to narrow the dangerous gaps separating the various races; today it is the deepening inequities within Malays.
Tun Razak’s NEP was successful because it concentrated on the basics: eradicating poverty, and blurring racial identification with economic activities. He did so primarily through stimulating economic growth and investing in such basic social infrastructures as education and rural development. The NEP’s many early successes are attributed to the fact that it focused on these two basic issues. He was not concerned with creating Malay millionaires, or for glamorous corporations like airlines to be owned or led by Malays.
A reflection of the overall modest mindset of the late Tun was this reputed conversation he had with his children when they were residing at the much more humble abode of Sri Perdana, the official home of the Prime Minister. The children had wanted a swimming pool put in but the Tun would have none of it considering the costs. “What would the people say?” he chided them.2
Today the official prime minister’s residence is the plush 50-million ringgit “People’s Palace” in Putrajaya. When Mahathir left, it took over a year and another RM15 million in renovations before his successor Abdullah would move in. Presumably all those millions were to make the place more humble and pious to reflect Abdullah’s new image as the nation’s imam.
Such are the differences between today’s leaders as compared to those of yore. With conditions changing, we need to reexamine critically the assumptions, thrusts, and executions of our policies. The challenge today is how to make all Malaysians, in particular Malays, competitive. Investments in education alone would not suffice; we must focus on the right kind, with emphasis on language skills (in particular English), critical thinking, science literacy, and mathematical competency.
With hosts of countries now discovering the wonders of capitalism, Malaysia faces intense competition for the finite global investment funds. Malaysia can no longer rely on its traditional advantages of cheap labor and low commodity prices. It could not and should never compete on that basis with the likes of China, Vietnam, and Indonesia. Malaysia needs to climb up the value ladder, hence the critical need for better education and training.
It is sad that these three remarkable achievements I highlighted here are not more widely noted, much less appreciated. In part because they are not well chronicled and documented.
I have yet to read the personal accounts by any of the participants in the pivotal negotiations with Britain that lead to independence. We have glimpses from the recollections of Tunku Abdul Rahman through his columns in a local tabloid. 3 We know that members of the delegations were not unanimous in their views when they left for London in the steamship MV Asia. There were differences between representatives of UMNO, MCA and MIC, as well as between them and agents of the sultans. Their being cooped up in their less-than-luxurious cabins on that long sea journey did the trick, for by the time they reached India, they were well bonded on their way to an agreement. That greatly facilitated and strengthened their hands in negotiating with the colonial office.
Sadly, all the players are now dead, and the nation is that much poorer for their not documenting their experiences, and with that, the valuable learning opportunities.
Some of the progenitors of the NEP are still alive; they too have not shown any inclination to share their thoughts. In part this is the consequence of the government’s repressive attitude on discussing what it deemed “sensitive” issues. It does not reflect well on local scholars and academics that most of the critical studies on the NEP are done not by them but by foreigners. Ironically they have many positive things to say about the NEP.4
Likewise with the peace treaty with the communist party; many of the participants on the Malaysian side are all still alive. All are senior officials and presumably highly educated. Yet none has seen fit to document their experiences and perspectives. The only accounts thus far of that singular event are by the leader of the communist party, and the Thai General closely involved in the negotiations.5 Haniff Omar, the one time Chief of Police, signed the treaty for Malaysia. He is a lawyer by training and writes a regular column in one of the local tabloids. Yet he too has not seen fit to pen his recollections.
These three great successes—peaceful independence, defeat of communism, and achieving economic growth with equity—should give Malaysia the necessary confidence to face the future. These lessons of the past would be for naught if Malaysia were content merely to rest on its laurels.
Next: Chapter 12: Fragmentation of Malaysian Society
Economic Growth with Equity
Another remarkable achievement, widely lauded, is Malaysia’s success in achieving economic growth with equity. Accomplishing economic growth alone would have been quite a feat, but to have that growth distributed equitably was a double bonus, especially for a plural society like Malaysia.
Many countries had impressive economic growth but few did it as equitably as Malaysia. China has enviable economic performance but struggles to correct its obscene ethnic, regional, and social disparities. Such glaring inequities are dangerous and de-stabilizing. Besides being morally and socially unacceptable, they could also impede future growth.
A concerted effort at both economic growth and redressing inter-racial inequities began with Tun Razak in the 1970s, and greatly expanded under Mahathir in the 1980s and 90s. There were hiccups along the way, the latest and most severe being the 1997 economic crisis, but the thrust of the policy remains intact.
Unbridled free enterprise and trickle-down theory works well only in the sterile world of econometric modeling. In practical life, there is a role for governments to ensure and encourage that the wealth not only trickles down but also spreads sideways across racial and social boundaries (Frances Stewart’s vertical and horizontal inequalities).
Malaysian leaders recognize the self-evident fact that wealth must first be created before it can be redistributed, hence the focus primarily on wealth generation and only secondarily on its redistribution. This insight may be obvious but it is remarkable that it escapes the thinking of many.
It may be argued that Malaysia would have performed better economically had it not be concerned with social and racial equity, or that these inequities would best be solved through economic growth alone. That may well be, but as had been painfully demonstrated in 1969 in Malaysia, and in many parts of the world today, glaring inequities can be downright disruptive, destroying whatever gains that had been achieved.
The dilemma Malaysia faces is whether policies designed to ensure equity a generation ago is applicable to and effective with today’s realities. Then it was to narrow the dangerous gaps separating the various races; today it is the deepening inequities within Malays.
Tun Razak’s NEP was successful because it concentrated on the basics: eradicating poverty, and blurring racial identification with economic activities. He did so primarily through stimulating economic growth and investing in such basic social infrastructures as education and rural development. The NEP’s many early successes are attributed to the fact that it focused on these two basic issues. He was not concerned with creating Malay millionaires, or for glamorous corporations like airlines to be owned or led by Malays.
A reflection of the overall modest mindset of the late Tun was this reputed conversation he had with his children when they were residing at the much more humble abode of Sri Perdana, the official home of the Prime Minister. The children had wanted a swimming pool put in but the Tun would have none of it considering the costs. “What would the people say?” he chided them.2
Today the official prime minister’s residence is the plush 50-million ringgit “People’s Palace” in Putrajaya. When Mahathir left, it took over a year and another RM15 million in renovations before his successor Abdullah would move in. Presumably all those millions were to make the place more humble and pious to reflect Abdullah’s new image as the nation’s imam.
Such are the differences between today’s leaders as compared to those of yore. With conditions changing, we need to reexamine critically the assumptions, thrusts, and executions of our policies. The challenge today is how to make all Malaysians, in particular Malays, competitive. Investments in education alone would not suffice; we must focus on the right kind, with emphasis on language skills (in particular English), critical thinking, science literacy, and mathematical competency.
With hosts of countries now discovering the wonders of capitalism, Malaysia faces intense competition for the finite global investment funds. Malaysia can no longer rely on its traditional advantages of cheap labor and low commodity prices. It could not and should never compete on that basis with the likes of China, Vietnam, and Indonesia. Malaysia needs to climb up the value ladder, hence the critical need for better education and training.
It is sad that these three remarkable achievements I highlighted here are not more widely noted, much less appreciated. In part because they are not well chronicled and documented.
I have yet to read the personal accounts by any of the participants in the pivotal negotiations with Britain that lead to independence. We have glimpses from the recollections of Tunku Abdul Rahman through his columns in a local tabloid. 3 We know that members of the delegations were not unanimous in their views when they left for London in the steamship MV Asia. There were differences between representatives of UMNO, MCA and MIC, as well as between them and agents of the sultans. Their being cooped up in their less-than-luxurious cabins on that long sea journey did the trick, for by the time they reached India, they were well bonded on their way to an agreement. That greatly facilitated and strengthened their hands in negotiating with the colonial office.
Sadly, all the players are now dead, and the nation is that much poorer for their not documenting their experiences, and with that, the valuable learning opportunities.
Some of the progenitors of the NEP are still alive; they too have not shown any inclination to share their thoughts. In part this is the consequence of the government’s repressive attitude on discussing what it deemed “sensitive” issues. It does not reflect well on local scholars and academics that most of the critical studies on the NEP are done not by them but by foreigners. Ironically they have many positive things to say about the NEP.4
Likewise with the peace treaty with the communist party; many of the participants on the Malaysian side are all still alive. All are senior officials and presumably highly educated. Yet none has seen fit to document their experiences and perspectives. The only accounts thus far of that singular event are by the leader of the communist party, and the Thai General closely involved in the negotiations.5 Haniff Omar, the one time Chief of Police, signed the treaty for Malaysia. He is a lawyer by training and writes a regular column in one of the local tabloids. Yet he too has not seen fit to pen his recollections.
These three great successes—peaceful independence, defeat of communism, and achieving economic growth with equity—should give Malaysia the necessary confidence to face the future. These lessons of the past would be for naught if Malaysia were content merely to rest on its laurels.
Next: Chapter 12: Fragmentation of Malaysian Society
posted by M. Bakri Musa | 11:12 AM
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