Malaysian-born Bakri Musa writes frequently on issues affecting his native land. His essays have appeared in the Far Eastern Economic Review, Asiaweek, International Herald Tribune, Education Quarterly, SIngapore's Straits Times, and The New Straits Times. His commentary has aired on National Public Radio's Marketplace. His regular column Seeing It My Way appears in Malaysiakini. Bakri is also a regular contributor to th eSun (Malaysia).
He has previously written "The Malay Dilemma Revisited: Race Dynamics in Modern Malaysia" as well as "Malaysia in the Era of Globalization," "An Education System Worthy of Malaysia," "Seeing Malaysia My Way," and "With Love, From Malaysia."
Bakri's day job (and frequently night time too!) is as a surgeon in private practice in Silicon Valley, California. He and his wife Karen live on a ranch in Morgan Hill.
This website is updated twice a week on Sundays and Wednesdays at 5 PM California time.
Economists consider Homo economicus to be rational, always carefully measuring his moves to effect “maximal utility.” As succinctly stated by Landsburg in his The Armchair Economist, “People respond to incentives; the rest is commentary.” Economists claim that their laws are truly “scientific,” blind to race, gender, or culture. While economic concepts may be universal, its contents vary with culture. What is viewed as incentive in one culture may be a distinct disincentive in another.
Consider the clumsy British attempts to encourage Malays to save. The more the colonialists increased the savings rates, the less likely Malays were to save. The Brits concluded the only way they could:Malays did not respond to modern economic incentives!
It took the genius of an indigenous economist to discover that, on the contrary, Malays, like others, respond to economic incentives. In his careful study, Ungku Aziz discovered that Malays were indeed diligent savers; the only problem was that they did not trust formal institutions like banks, especially those owned by foreigners. Worse, being Muslims, they considered interest sinful, equating it to usury. While the British thought that they were offering generous incentives by increasing the interest rates, to the Malays those were invitations to a life of sin. Those sneaky white devils!
Ungku Aziz went further with his insight. He established Tabong Haji, a mutual fund-like institution that collects and invests funds in Islamic-approved ventures. He declared the returns as faedah (dividends), not interests. To make the venture even more appealing, he astutely named it Tabong Haji, Pilgrims Fund, thus tying it with the Islamic theme, fully aware that it would sell with Muslim Malays. He was right. Today Tabong Haji is the largest mutual fund in Southeast Asia with over three million subscribers, a monumental legacy to the brilliance of an individual who could discern the difference between concept and content.
That British fiasco reminded me of the novice scientist who was conducting experiments on what made grasshoppers jump. Every time he clapped his hands and shouted, “Jump!” the critters would jump. Then he modified the experiment (changed one variable, to put it scientifically) and cut off their hind limbs. Then he repeated his command, and this time the insects did not jump. His conclusion? Cutting the hind limbs made the insects deaf. Right experiment, right data, but wrong conclusion! Nothing wrong with the scientific method, but everything wrong with the scientist!
Apart from differentiating between concept and content, there is the more important matter that what we offer as incentives would profoundly affect not only the responses, but also the responders. Offer honey, we get bees; rotten meat, maggots.
Under provisions of the NEP, publicly-listed companies are required to sell a significant portion of their shares to Malays, often at generously discounted prices in an attempt to increase Malay participation in that sector. Unfortunately, the lucky recipients are selected not by the companies or their investment bankers, rather by Ministry of Trade officials. Consequently those closest to the minister, like her son-in-law, would receive the bounty. Because politicians and bureaucrats make the decisions, they would naturally attract their own kind, meaning rent seekers and other economic parasites. It should not surprise anyone that a generation later, the only “capitalists” Malays have are of this variety.
When we encourage pseudo entrepreneurs we necessarily discourage the genuine variety. In business the phrase is, throwing good money after bad. In this case, pseudo capitalists chasing out the genuine ones. Malay farmers have an apt metaphor. When we let lallang (a tenacious weed) grow, it would choke out the good crops. Subsiding rent seekers and “ersatz capitalists” is akin to membajakan lallang (fertilizing weeds).
Another consideration is that while we may get the right responses and responders, the consequences are not what had been anticipated. America offers incentives to build cars with safety features like airbags and seat belts. Yes, driver fatalities dropped markedly but now pedestrian fatalities shot up. Motorists, realizing that their cars are now safer, drive recklessly causing deaths and injuries to pedestrians and cyclists. Unintended consequences!
Right after independence, the government wanted to emphasize Malay language, fearing that it would disappear and be overwhelmed by English. Novel incentives were introduced like extra bonuses if you were fluent in Malay. It was very successful, but there were unanticipated consequences. A generation later, Malaysians (especially Malays) are English illiterate. As English is the language of commerce and science, the loss was greatly magnified. Now the government is belatedly trying to remedy this, and finding it tough.
The government could use some of the techniques it used so successfully in encouraging the use of Malay, like giving bonuses and promotions only to those proficient in English. I am certain that the government is aware of the value of such incentives but is hesitant to use them because that would favor non-Malays. They are aware of the importance of English and are not easily swayed by the language nationalists.
The government is repeating the same colossal mistake a generation later in another way. Obsessed with trying to burnish its Islamic credentials, the government vastly expanded Islamic schools and establishments. The unintended consequence is that today’s young Malays want to be an imam or qadhi (Muslim judge) only, and the nation’s law, medical, and engineering schools are again desperately short of Malays.
Singapore’s Lee Kuan Yew, no doubt invoking the authoritarian powers of some ancient Chinese emperor, had his own brand of social engineering. Conscious of the limited landmass of that tiny republic, and fearing that his fellow citizens would breed with abandon, Lee imposed strict birth controls, with incentives like tax breaks and choice of schools for the children of those who complied, and severe punishment for those who dared challenge the order. He was too successful; today he and his successors are desperately trying to reverse course.
Have they learned their lesson? Far from it, they are still onto their next pet social engineering scheme, this time setting up “cupid clubs” to encourage their citizens to get married! Never mind that Lee Kuan Yew could not even get his own daughter hitched. These leaders never learn. The law of unintended consequences remains operative and universal.
It is tempting – and comforting – to blame everyone for the failure of Prime Minister Abdullah’s leadership, or to take the other extreme and heap the blame entirely on the hapless man.
Both approaches would be inadequate if not wrong.The corollary to “everyone is at fault” is that no one is.That would be a collective “cop out,” an abrogation of personal responsibility.Even if it were that rare instance where everyone is indeed responsible, there would still be the different degrees of culpability that would have to be acknowledged.
Blaming Abdullah entirely would also be inadequate.If nothing else, that would reveal the glaring inadequacies of the system, like its lack of checks and balances.
When a Turkish Airline jet crashed over Paris in 1974 because its cargo door blew out, the blame was not put entirely on the sloppy mechanic – although his negligence was clearly the triggering event – rather on the design flaws that would not indicate when doors were not properly secured.Firing the poor mechanic (though that was done) would not prevent future similar accidents, but improving the design with better indicator lights did.
An insight of modern “failure analysis” is that catastrophes are often not the result of a single major error, rather the cumulative effects of a series of minor mistakes each compounding the other until a critical stress point is reached when the whole thing would blow up.We are all familiar with the story of losing the war for the want of a nut.
We could usefully use these approaches to analyze Abdullah’s failure.The triggering event (the sloppy mechanic as it were) was Mahathir’s selection of Abdullah back in 1998.Had Mahathir not done this, we would have been spared this disaster.
Malaysia however cannot be at the mercy of the mistake of any one person.Besides, blaming Mahathir alone would also not pass the philosophical test on the meaning of causation.We might as well blame Abdullah’s mother if we were to pursue this line of logic, for had she not given birth to him, we would have been spared this debacle.We could go even earlier and blame Abdullah’s father for the conception.There would be no end to the line of blame.
Certainly Mahathir should have been more prudent and sought wider counsel in selecting his deputy.He should have had the courage to break party tradition and go beyond the sitting vice presidents in selecting his successor.
While Mahathir was clearly the triggering factor, I would apportion only 10 percent of the blame on him.
The Man Himself
When Abdullah was selected to assume the highest office in the land, he should have taken that responsibility seriously.This was not, as in the tradition of the civil service from which he came, “just another promotion.”Granted, the man lacks introspective instinct, nonetheless he should have at least contemplated his abilities and limitations.
When the distinguished editor Howard Raines was appointed to head the influential New York Times, he knew that he lacked executive experience.Consequently he enrolled in a brief graduate business program.When Tengku Razaleigh was approached by then Prime Minister Hussein Onn to be his deputy, the Tengku politely declined.He felt he could contribute more by being other than a Deputy Prime Minister.Mark of wisdom and self confidence!
When Hussein Onn felt that leading the country was way over his head, he did the honorable thing:He resigned.Wise man!
Abdullah clearly lacks executive talent and economic nous; he owes it to himself and the nation to remedy those deficits.He could have had the services of the best minds, if only he had been prudent in selecting his advisors.
For these reasons I would apportion a greater blame – 20 percent – to Abdullah.
Editors, Pundits, Abdullah’s Advisors as Culprits
Just as Abdullah has a duty to select competent advisors, they too owe a duty to him and the nation in properly advising him.They are advisors and counselors, not courtiers and cheerleaders.Abdullah has his wife and family members to do that for him.My admonition also goes to Abdullah’s other official advisors like his ministers and UMNO Supreme Council members.
This duty to advise extends beyond those with appropriately designated titles.Editors and journalists as well as intellectuals and pundits, whom society has implicitly imposed a similar obligation, also have a sacred duty and a greater obligation to the public in serving as checks and balances on the leadership.
Veteran news anchor Walter Cronkite’s critical comments on the Vietnam War were instrumental in President Johnson not seeking a second term.Had Malaysian editors and journalists acted less like lap dogs, Abdullah would not have dared stray far.
It is hilarious to see these editors of the mainstream media now clumsily trying to correct themselves.They are finding that ingrained habits are hard to break, especially bad ones.
If our editors had a fraction of the fearlessness of Raja Petra, and intellectuals an iota of the integrity of Azmi Sharom, we are more likely to get honest competent leaders, and keep them that way once they are in power.
Academics like Shamsul AB who are on the public payroll and pundits like Johan Jaafar who earn fat public pensions have a public duty not to debase themselves to be the administration’s sycophants.They have to remain true to their vocation.
These folks as well as those boys on the infamous “fourth floor” must therefore shoulder their responsibility for Abdullah’s failings.I would apportion 30 percent of the blame to them.
We Deserve Our Leaders
Abdullah would not be the leader he is without his followers – us – acquiescing to or permitting it.Had Malaysians not given Abdullah that overwhelming mandate in 2004 and instead adopted a more skeptical “Show me first!” attitude, his ego would not have been so inflated.He would have a more realistic assessment of his capabilities; it also would have chastened his advisors.
Malaysians had plenty of opportunities to remind Abdullah of his shortcomings prior to the recent general election.The last was the Ijok state by-election.The excesses of UMNO operatives during this last general election grew out of voters’ tolerance of earlier shenanigans.
We are responsible for the leaders we get.We must scrutinize our leaders’ promises; we must hold these leaders accountable.If we fail to do that, then we have only ourselves to blame for their straying.For these reasons I would apportion 40 percent of the blame on Malaysian voters.
While Mahathir’s culpability is a miniscule 10 percent, nonetheless he has freely admitted to it.More importantly, he is trying his best to rectify it.Malaysians too are becoming more circumspect and taking their voting responsibilities seriously, as demonstrated by this recent election results.
As for Abdullah, he has accepted responsibility alright, but that is all he has done.He continues blaming others – party saboteurs, Anwar, Mahathir – everybody but himself.As for his advisors, pundits, editors and intellectuals, they have remained uncharacteristically silent.They have yet to acknowledge much less rectify their mistakes.
The foregoing is not an accounting exercise rather a suggestion on how we should treat our leaders in future.The burden is particularly high for voters who are also commentators, editors, and intellectuals.
Rustam Sani - Patriot and Intellectual (1944-2008)
I am saddened to hear of the sudden death of Rustam Sani.In Rustam we had a true patriot, one whose love for the country is pure.It is so because it came from the head as well as the heart.It is patriotism unadulterated by the pursuit of material wealth, public adulation, or political power.A genuine intellectual, he was not one to fit his ideas to the fashion of the day.
He recognized early the heavy duty and responsibility of being a patriot.His was not one consumed with endless exhortations.As the son of a renown nationalist, Rustam must have been immersed in the patriotic fervor and fiery speeches of his late father, Ahmad Boestaman.Yet at a very young age he knew that the new independent Malaysia would need leaders who not only love the country but also be well equipped with the necessary skills and intellect to lead it.
Consequently he focused on his school work fully aware that he was among the fortunate few among the youngsters to have the privilege of attending school.From his local sekolah attap (village school) in Behrang Ulu and the Methodist School Tanjong Malim, he went on to the University of Malaya via Victoria Institution.From there it was on to graduate work at Kent and Reading in Britain, and later, Yale.
He was a scholar as well as a practitioner of politics.His intellectual accomplishment was never diminished by his political involvement. He had penned more academic papers and popular commentaries as well as books than many fulltime academics.It was only yesterday that I read his latest (and alas his last) posting on his blog. Rustam was in his usual sharp element; that posting was a trenchant commentary on Mahathir’s interview on BBC’s Hard Talk.Rustam was also to have launched his latest books, Failed Nation? Concerns of a Malaysian Nationalist, and Social Roots of the Malay Left, later this month.Imagine two books!
As an academic, Rustam molded thousands of young minds.That may be his greatest though not easily visible legacy.Rustam may not have been successful in electoral politics, nonetheless his contributions to the nation dwarfs those of “successful” political leaders.
Rustam is survived by his wife Rohani, son Azrani and daughter Ariani, as well as daughter-in-law Ku Salha and granddaughter Arissa.My condolences and prayers go to them in this moment of sadness.May Allah shower His blessings and Mercy on this great Malaysian patriot and intellect.
Johore UMNO leaders had apparently told Prime Minister Abdullah that he must have a succession plan that is “structured, smooth and speedy.” This three “S” strategy missed targeting the biggest ass of all, Abdullah himself.The initiative had more to do with saving Abdullah’s “face” than with solving the grave problems confronting the party.
If UMNO members and leaders were serious, they would focus on getting this harsh and unadulterated message straight to Abdullah:He is unfit to lead the party and country.He has clearly demonstrated this through his deeds (or lack of them) and words.The man is a habitual liar; he cannot separate fact from fiction and distinguish reality from fantasy.
Abdullah’s idea of taking responsibility for his party’s electoral debacle is merely to utter that statement.He has no inkling of what it means to accept responsibility.
Abdullah’s pleading that he is needed to “revive” the party is laughable and self serving.If he could not pilot his ship of state competently when it was calm, there is no hope that he would be any more capable when it is now stormy, and threatening to get even more so every day.Abdullah is the problem, and a very huge one at that.Consequently his moving out would be a big part of the solution.It would not solve everything of course, but it would remove a major impediment.
His “leadership” has been nothing more than endless sloganeering (Work with me, not for me!”), like the leader caricatured in Shahnon Ahmad’s short story, “Ungkapan” (Sloganeering).
Having grown accustomed to the perks and trappings of his office, Abdullah will not leave voluntarily, much less gracefully.He has to be literally dragged out.Subtleties and hints will not work on this man.He is too dumb to read the signals.He is also insulated, surrounded by courtiers ever willing to spin bad news.
Only Three Exit Strategies
There are only three ways to get rid of Abdullah.One is for him to be successfully challenged as party leader in the upcoming UMNO General Assembly in December.Two, would be for a sufficient number of the ruling coalition members to vote with the opposition in a “no confidence” motion in Parliament.And three of course, would be through divine intervention, not inappropriate for a man who is never shy in parading his piety and religiosity.
Knowing the onerous obstacles placed in UMNO towards challengers, the first option is unlikely.Granted, Tengku Razaleigh – the only one to have come out publicly to challenge Abdullah – is a formidable challenger.More daunting however, is the cultural inertia of Malays, especially those in UMNO.They have yet to learn the essential lesson that challenges and competitions are healthy, not acts of treason or betrayal.
The second path is more realistic.The political resurgence of Anwar is real.Far from being the “Anwar who?” of a few years ago, he is now increasingly viewed not only as the de facto leader of the opposition (even though he is not yet in Parliament) but rightly as Prime Minister-in-waiting.
Anwar will be able to contest a parliamentary seat once his statutory prohibition ends on April 14, 2008.A vacant seat will surely come up soon as Malaysia has a good track record of MPs dying in office or getting caught in some scandalous acts and thus having to resign.More likely though would be for one of the current PKR MPs to resign, not to pave the way for Anwar (though that would be the convenient and acceptable excuse) but because the job is not as glamorous or challenging as it is made out to be.Many PKR MPs are successful, young and honest professionals; their “elevation” to the “Yang Berhormat” (Your Honorable) status cuts deeply into their income and career prospects.
As for divine intervention, that is beyond my purview.However many a leader had used “medical” reasons as a convenient face-saving cover for resigning.Abdullah could always blame his hemorrhoids or narcolepsy (a pathologic tendency to doze off).
Abdullah Is The Problem
When Abdullah assumed office nearly five years ago, I was one of the few who were not enthused about his leadership potential.My conclusion was based on reviewing his performance as a minister.I predicted then that by the time Abdullah leaves office, Malaysians would be counting their blessings if he had not screwed up the country too much, and that the best we could hope for was for him to maintain the status quo.
Alas, I was wrong.I had not counted on the maturity and resilience of Malaysians in overcoming Abdullah’s gross incompetence.Malaysians are also incredibly generous as demonstrated by their giving him a rousing endorsement in the 2004 election in the hope that it would give him the necessary boost and confidence to lead.Unfortunately that too could not override his basic ineptness.
In their collective wisdom, in this recent election Malaysians decided that it was not necessary to deal a crippling blow, only enough punch that would leave Abdullah and UMNO reeling, and in the process trigger an implosion in an already corrupt and dysfunctional organization.
Equally remarkable, Malaysians also demonstrated that they are capable of executing peaceful political change.There was not even a hint of civil disorder following Barisan’s loss of five states.Compare that to 1969 and the horror that followed when the ruling coalition lost only one state.
To be sure, had the election been conducted free and fair, with no stuffed postal ballots and with the use of indelible ink to prevent fraudulent voting, the ultimate message would have been delivered, and Abdullah and his ilk would have been kicked out.
Perhaps it was better this way.For had the Barisan Nasional been voted out, there would have been a dangerous political vacuum as none of the opposition parties could form a government.Their loose coalition, the Pakatan Rakyat (Citizens’ Alliance) had yet to be ratified.Now having sensed that power is within their grasp, the opposition parties are ready and willing to sink their differences for a common cause.
Meanwhile UMNO and its coalition partners are galloping fast towards their collective demise.Their course is irreversible.
Thankfully my earlier dire prediction on Abdullah was misplaced.Abdullah has not destroyed Malaysia, only UMNO and Barisan Nasional.Malaysians can all count their blessings for his legacy not being any worse.
As culture determines our values and how we view the greater world, it must therefore also govern how we view such things as wealth, work, savings, and the future. These are also elements related and important to economic activities.
Of pertinence is the cultural attitude towards wealth, as that would have considerable bearing on its accumulation. Often the language to describe wealth is revealing. Even in the economically sophisticated West, only land and homes are considered “real” estate, with the implication that stocks, bonds, and your own enterprises not being “real” assets. In primitive societies and those with unstable currencies, citizens keep their wealth in tangible assets like gold rather than in “paper” ones like stocks and bonds. Imagine the impact on the economy if a substantial portion of the wealth were in gold tucked in safety boxes. That wealth is trapped; it has zero economic “velocity” and multiplier effect.
The relationship between cultural values and economic activities is complex. Sometimes it is causal, meaning, one causes the other; others are merely correlates with no implication of causation; and yet others are autonomous, meaning they bear no relationship whatsoever with one another. It is not my intention to analyze these various views or roles, rather to examine those cultural factors that have a bearing upon activities with economic consequences, in particular attitudes towards wealth, resources, and most of all, knowledge. More specifically, to identify and thus encourage those cultural traits that would enhance economic activities. Most of all to instill in citizens that their fate lies in their own hands and not with the sultans, government, or some mysterious powers.
Malays still look to the palace and the government for their salvation, non-Malays depend more upon themselves, their hard work, and wits. The result? Non-Malays are successful economically while Malays have only their royal titles and court fineries to show off on sultans’ birthdays. Turns out that those exalted titles and honorifics could also be had (and more easily too!) through economic favors.
To illustrate again that cultural values can change, many non-Malays today are also aspiring Malay knights wannabes, willingly spending hundreds of thousands of dollars bribing royal courtiers in order to secure these fancy titles and the chance to put on those ornate Malay court attires. Never mind that they look like jackasses, especially with their silly headgear. A Malay would look just as stupid attired in one of the Ming Court’s regalia.
Malay cultural values could be changed too. Tun (that silly royal title again!) Razak attempted to replicate the values and trait of successful immigrants onto kampong Malays by encouraging them to undertake internal migration of sorts. Thus was born the massive Federal Land Development Agency (FELDA) scheme. Vast tracts of jungle were cleared for cultivation and then handed over to these landless Malays. That social engineering experiment was a resounding success. Today those pioneering FELDA settlers are among the most assertive of Malays; they never hesitate in challenging officialdom. Of course to their still feudal leaders, these settlers are an uppity and ungrateful bunch! Mahathir too successfully introduced substantive cultural changes among Malays. His very first move as Prime Minister was to make a big show of signing himself into his office every morning—on time of course—and to wearing a nametag. In a country where only peons wore nametags, this was significant. The message was clear:Even the highest official is answerable. Mahathir was leading in the best tradition of our Holy Prophet Muhammad (pbuh), of leadership through personal example.
Today Prime Minister Abdullah is setting a personal example in the opposite direction. He is chronically late and habitually dozes off at meetings while exhorting his followers to have First World mentality.
Mahathir was emboldened to take on the sultans, those self-proclaimed God’s representatives on earth. He declared that they were mere mortals—a startling revelation, at least to them—and should they break the law, they would have to face the music. This is the norm in the civilized world, but in the insular world of Malay royalty, that is revolutionary if not downright treasonous. It turned out that this concept was also a startling revelation for the Malay masses; it triggered a constitutional crisis.
Had Mahathir carried through with his transforming revolution and pensioned off those sultans, it would have initiated a seismic cultural change among Malays. Without the distracting influence of the palace with all its unchallenged privileges, Malays would be forced to look elsewhere—as in the marketplace—for advancement. Mahathir would have gotten rid of one of the barnacles impeding Malay progress.
Alas it was not to be. The drama turned out to be nothing more than a naked power grab, with Mahathir trying to replace the sultans at the top of this huge special privileges heap. In the end, Mahathir too was successfully acculturated into the feudal Malay court system with its useless trappings. At last count, he had no less than a dozen of these ornate Malay titles and honorifics, including the latest, Tun.
It must be frustrating to be a leader of a developing country.Just as you are becoming convinced on the virtues of free trade and globalization, there emerges a countervailing viewpoint suggesting that those are nothing more than attempts by the developed world to maintain their economic dominance.
To me, the differences between the two viewpoints are more apparent than real.To former Prime Minister Mahathir however, this merely vindicates his conviction all along.And the man can speak with considerable authority.
He defied the then prevailing economic thinking – the so-called Washington consensus – and successfully steered Malaysia out of the treacherous 1997 Asian economic contagion.Mahathir made those brilliant economists at the IMF and US Treasury Department eat more than their share of humble pie with the success of his unique if unorthodox initiatives that were at variance to the accepted wisdom.
The surprise is that Mahathir’s remarkable achievement is not more analyzed or appreciated.The 1997 economic crisis and Mahathir’s bold and contrary approaches to solving it provided one of the rare “experiments of nature” in economics.
It is interesting that with America currently experiencing severe economic squeeze as a result of its sub-prime mortgage mess, many of the solutions adopted by the champions of free market in the Bush Administration bear remarkable resemblance to the methods of Mahathir.These include the government’s prompt and unhesitating “rescue” of a major Wall Street firm (Bear Stearns), the lowering of interest rates (with scant regards to its negative impact on the dollar), and the priming of the economic pump with generous tax rebates.
When Mahathir did similar “rescues,” he was accused of bailing out his cronies.Nobody would dare suggest that Treasury Secretary Paulson, a former major Wall Street figure, of doing the same thing.As for the decline of the dollar, the direct consequence of lower interest rates, it is deemed acceptable to avoid recession and unemployment!Exactly what Mahathir had uttered then!
Malaysia came out of the 1997 economic crisis much faster and with fewer scars than countries like Indonesia that followed the “severe but necessary” prescription of the Washington consensus.Mahathir was right then; I hope that Paulson would also be right.
Cause Versus Effect
This wind of change is also evident outside the corridors of power.Consider that a book by the Korean-bornCambridgeUniversity economist Ha-Joon Chang, Bad Samaritans:The Myth of Free Trade and the Secret History of Capitalism, is fast making the bestseller list.His provocative point is that the developed countries are preaching the very opposite of what they had practiced, with respect to economic development.
Unlike other economists who rely on complex econometric models and esoteric mathematics (no equations or Greek alphabets in his book!), Chang is into economic history.He studied what countries actually did, in contrast to what they now preach.He also reminds us that many economic conclusions are based on statistical correlations.Correlations are just that; they do not mean or even infer causation, nor do they differentiate between cause and effect.
Take the widely accepted notion of the poor:They are poor because they are lazy, so we are told repeatedly.This observation is of course made only by the rich, never by the poor.
Could it be, as Chang challenged us, that they are lazy because they are poor?The poor are more likely to be malnourished, unhealthy, and thus lack vigor to do hard work.Even if they are capable of hard work, because of their poverty they could not afford an education and thus their hard work is valued less.It is callous if not cruel to label those poor hardworking rice planters and fisherman in Kelantan as lazy.Try spending an hour in their day under the blazing Malaysian sun!
If we assume that they are poor because they are lazy, then we are dealing with basic human nature, very difficult to change.However if they are lazy because they are poor, then we are dealing with external conditions, and thus potentially solvable.It makes more sense to approach the problem from this perspective.
Today we are told that unfettered free trade and globalization are the recipe for economic development.We are lectured endlessly of this truism, most persuasively by Thomas Friedman of “The-World-is-Flat” fame.
Chang concluded that historically, trade liberalization has been the outcome rather than the cause of economic development.Many of today’s developed nations, in particular America, were once ardent advocates of protectionism.Indeed Alexander Hamilton coined the term “infant industries” and the need to protect them.
Chang refers to his own South Korea which made the remarkable transformation from a backward agrarian society to a modern industrialized one by resorting to unabashed protectionism and aggressive state interventions in the marketplace, all anathema to free market disciples.He remembers as a young man ostracizing those who would dare smoke foreign brands of cigarettes.Precious foreign exchange should be used to support local industries, not foreign ones!Of course now that the nation is developed, South Koreans have no compulsion buying expensive Gucci handbags.
Had South Korea been diligent in enforcing copyright laws as per WTO dictates, Chang would not have become an economist as practically all his textbooks were pirated versions!
South Korea proves that active participation in international trade does not require free trade.In economics as in other areas of human endeavors, dogmas should never come in the way of pragmatism.Extremism in the pursuit of a truism is a vice.A familiar hadith says it better:In everything, moderation.
As Chang wisely noted, “The secret of success is in a judicious mix of protection and open trade, with areas of protection constantly changing as new infant industries are developed and old infant industries become internationally competitive.”
Sifting Concept From Content
Globalization makes the world smaller, with physical distance reduced to irrelevance.At the same time other distances – cultural, institutional, and linguistic – become more pronounced.Indonesia is physically, culturally, and linguistically close to Malaysia, while America is far away in all dimensions.Yet trade between Malaysia and America greatly exceeds that between Malaysia and Indonesia.Malaysians are more likely to have heard of or even visited San Francisco than Surabaya.
Trade benefits its participants; we should encourage and facilitate it.While the benefits may never be equal or perceived to be so, there is no such thing as unfair trade, only that we can make it fairer.The best way to achieve this is not to discourage trade but to increase it even more.As the participants get more sophisticated and more engaged, they are more likely to make compromises lest they would lose their now valuable relationships.Exploitative trade, like other exploitative relationships whether business or personal, rarely endures.
In the past, jute farmers in Bangladesh were at the mercy of middle men.Nonetheless both benefited more by trading than by not partaking in it.Through globalization, specifically modern technology like cell phones, jute farmers now have access to market information.This liberates them; they are now no longer dictated by the middlemen.Information makes the playing field more level.
Technology destroyed the monopoly and monopsony of the middlemen far more effectively than any rigid communist mandate.The middlemen can still make their profits but not through the ignorance of their clients but by providing better services, as it should be.
The recent electoral humiliation of Barisan Nasional would not have been possible if not for the Internet, an accoutrement of globalization.Globalization is liberating.We should not ignore globalization or discourage trade in our purist pursuit of fairness. We should instead focus more on preparing our citizens for both.
Protection maybe necessary but it is only good if you use that opportunity to enhance the competitiveness of your people and infant industries.Otherwise it would be the surest and quickest route to complacency and mediocrity.If you cannot provide indigenous competition, introduce some from outside.
Trade must be actively promoted; it does not happen spontaneously, as revealed by our trade figures with Indonesia.For this reason, I am optimistic on the future of the Taiwan-China conflict because of the increasing trade and other economic ties between the two countries.
Globalization also brings the reality of a diverse world closer to each of us.A plural society like Malaysia is uniquely positioned to prepare its citizens for this new reality than those from culturally and ethnically homogenous societies.Our diversity is an asset, not a liability in this era of globalization.
I see no conflict in the truth and wisdom expressed by Friedman and Chang as they both offer relevant lessons for Malaysia.
Societies vary in their receptiveness to change and new ideas. Some adapt easily, others more resistant. Culture plays a major role. Without inferring any value judgment, the adjective most associated with the first is progressive; the second, conservative.
There is reluctance to attribute the fate of society to culture. We risk using culture as an excuse for everything and being trapped by cultural determinism. The other temptation would be to rank cultures, with some being superior and others, by definition, inferior. Of course the successful cultures would have the bragging rights. Today, Western culture is dominant, and not surprisingly Westerners feel compelled to lecture the rest of the world on the superiority of their values and norms. A few centuries earlier it was the Chinese who felt that they had nothing to learn from the barbarians beyond.
Lest we forget, when Europe was still stuck in the Dark Ages, Muslim physicians and astronomers were pondering and exploring the world within and beyond. I do not know whether those Muslim scholars and philosophers were consumed with smugly lecturing the rest of the world on the supposed superiority of Muslim values, but Europe eagerly learned from them.
When you have to tell the world how superior your values or cultures are, chances are they are anything but. While those in the West today are busy trumpeting the supposed superiority of Western values, they conveniently forget the debt the West owes to earlier civilizations.
When discussing the role of culture in Malaysia, an immediate problem crops up. With its many cultures, we have to define carefully the population sub-group. Another mistake would be to automatically ascribe the cultural values and traits of a particular group to its racial heritage.
Case in point is the common mistake to ascribe the success of overseas Chinese in Malaysia and elsewhere to the supposedly superior Confucian values. Were that to be the case, one would expect China to be a super power and have something to teach the world. Instead China is only now emerging from its shell. In truth, Malaysian Chinese, like other immigrants to Malaysia and elsewhere, are a self-selected group. Their ancestors had a decidedly different worldview, that is, their fate lies in their own hands and not with the local warlords or the mighty emperor in the distant capital. Those early Chinese coolies in Malaysia had more in common with the Irish and Italian immigrants to America than with their kin they left behind on the mainland.
To return to my earlier story, those early Chinese who left their homeland shared the same traits as farmer Ahmad, while those they left behind were like farmer Bakar. It is those values—their willingness to try something new, and the belief that their future lies in their on hands and not with some remote power elsewhere—which they inculcate in their children that account for their success. That is their cultural contribution, not some mysterious Confucian or biological trait. To be sure, the proportion of Chinese who left China—the Ahmads—was tiny, the vast majority were the Bakars who chose to remain on the mainland.
The environmental stimulus that precipitated the coolies’ personal and subsequent cultural transformation was the appalling conditions in their homeland, for the Irish, the potato famine. It is no more rational to ascribe the success of the Kennedys and other Irish Americans to their “superior” Gaelic heritage than it is to ascribe “superior” Confucian values to explain the success of overseas Chinese. Britain’s colonization of Malaysia was transforming for Malays, triggering our own cultural mutation. Colonialism ended slavery and brought modern education. The colonialists also brought something else. They saw in feudal Malay culture a reflection of their old medieval Britain with its lords and nobles. The Brits turned Malay society into a jungle version of medieval England. Malay nobles and sultans became even more entrenched and enamored with their titles and palaces. Malay masses further ingrained in themselves that their fate depended not on their wits rather on ingratiating themselves to their lord and sultans.
That trait persists today. Witness the toadying comments by intellectuals, ministers, and editors on the Prime Minister and leaders of the day. To them, their Prime Minister and sultans are always donned in samping sutra (silk cummerbund), never in sarong pelekat (cotton wraparound) even when they are covered in bark loincloth.
The most pressing issue Tunku Abdul Rahman faced as Prime Minister was to come up with a list of appropriate civil titles and honors! The old man idled his time researching ancient Malay literature to find just the right titles. He agonized over the details of attire and finery these new latter-day jungle knights and nobles should wear. Today, when leaders elsewhere are busy preparing their county for the increasingly competitive world, Malaysians are busy awarding each other these elaborate feudal honorifics and admiring themselves in their intricate court attire.
There was yet another transforming moment for Malays under the British, when they overreached to make Malaysia (or Malaya, as it was then called) a dominion. This time they grossly underestimated the political shrewdness of Malays. Up till then the British viewed Malays as an apathetic lot politically, not in the least interested in running their country. They left that to the British and their proxies, the sultans and nobilities. Malays, the Brits concluded, were content with carefree living in their villages under the gentle swaying fronds of their favorite coconut tree. The sultans and nobles too were a malleable bunch, easily swayed by the British. Their price was also modest: silly medieval titles like the knighthood of some ancient English order and a piddling pension. That was enough to persuade them to give up their sovereignty. The British, having understood the Malay psyche very well, played on the pride of the sultans.
When the Malay masses found out that their sultans were being hoodwinked or more correctly, cheaply bought, they reacted. With stunning effectiveness, and led by capable and farsighted leaders like the late Datuk Onn, Malays rebelled and successfully derailed that Malayan Union plan. The British knew much about Malay culture and psyche, and wisely reminded themselves that the word amok is afterall a Malay word. The surprise was how easily the mighty British capitulated to the demands of the newly awakened Malay masses.
A byproduct of that transforming event was that Malays became irretrievably hooked on politics, the refined form as well as the less savory variety. Who would have predicted these brown-skinned natives whom the Brits condescendingly referred to as “nature’s gentlemen” would become political rebel rousers and successfully take on the powerful colonialists? Less than a generation later, Malays have become so obsessed with politics that they cannot get away from it. Today, Malays who are successful in fields other than politics and could have made a significant contribution in their chosen profession, willingly give that up to dabble in silly politics.
A friend of mine who in the 1980s headed one of the biggest private medical clinics in the country then gave all that up in chasing his political dream. Unfortunately, after backing the wrong horse in a critical race, he found himself sidelined. As for his former clinics, well, what could have been the promising nucleus for a Malaysian Mayo Clinic, complete with its own hospital and possibly medical and nursing schools, were now in tatters. In chasing his political ambition, he forgot that he could have achieved an even bigger dream had he held on to his profession. To balance my account, I too rooted for him. I saw in him another brilliant young doctor, perhaps someone to eventually replace the other charismatic one who was then leading the country.
Politics still devour many promising young Malays. I now look anxiously at another successful Malay professional, who though still in his forties successfully created Malaysia’s largest legal firm, with branches abroad. His is the only one to have such a presence. Despite that, this young man, like so many other promising Malay professionals and businessmen, is being seduced by politics. Alas his political foray too does not look promising. Another, a neurosurgeon no less, a handful of Malays to be so qualified, dabbled in opposition politics and was soundly routed.
These instances serve to reaffirm the assertion that cultural values can indeed be changed, often suddenly and in very transforming manner.
In his novel Gadis Pantai (“The Girl From The Coast”), Pramoedya Ananta Toer revealed a quaint custom in ancient Malay culture.That is where the lord of the kampong upon reaching adulthood would grab the prettiest village virgin to be his “practise wife.”Then when he becomes sufficiently well honed in his “husbandly” skills or when he gets bored with her, he would toss her out like a piece of soiled rag.He with his now enhanced skills would go on to marry a lady of “proper” background.
I believe that Fate has gifted Malaysians with a “practise leader” in the person of Abdullah Badawi.He is so inept, so spineless, and so lacking in ability to make decisions that he practically invites scorn and contempt.Or in Tengku Razaleigh’s words, Abdullah showed a “stunning ineptness in managing … straightforward functions of government.”Today, in the kedai kopi (coffeehouses) even taxi drivers are not hesitant in ridiculing Abdullah.
Granted, some of the criticisms leveled at Abdullah are crude and clumsy, but then so would the village nobleman’s initial experiences with his “practise wife.”The concern is less with finesse and artistry, more with getting it done!With time and practice, rest assured things would only get better!
Once Malaysians have become accustomed to being critical of Abdullah and are unafraid to criticize or even challenge him, then we would toss Abdullah out, as the village nobleman would of his “practise wife.”Malaysians would then be ready for a proper leader.
Consequences of Uncritical Citizenry
Fate has blessed Malaysia with capable leaders in the past.There was Tunku Abdul Rahman, the Father of Independence, who successfully led us out of colonial rule without shedding a drop of blood.However, as Malaysians had not yet learned to be good followers, we were not sufficiently critical of him.Thus he got carried away with being the “world’s happiest prime minister” while letting problems fester away until they blew up in his and our collective faces.
He was succeeded by the able Tun Razak, but his life was tragically cut short by cancer.As such he was spared from being spoiled by an adoring and uncritical populace.His reputation remains intact and unblemished.
His successor Hussein Onn may not have been the most capable but at least he knew his limitations.He was wise enough to voluntarily relinquish his position.He also took his oath of office seriously.Thus he was meticulous and unusually astute in the choice of his successor.
In Dr. Mahathir Malaysians had a leader of exceptional brilliance, unorthodox convictions, and courageous innovations.He transformed Malaysia.Like any other mortal, he too had his share of mistakes.Unfortunately his uncritical and unabashedly adoring followers were equally blind to his mistakes thus preventing him from recognizing and rectifying them.
Had Malaysians generally and UMNO members specifically been more critical of Mahathir in his choice of a successor for example, the nation would have been spared the current political muddle.
This uncritical and sheep-to-shepherd dynamics also characterize other Asian and Third World societies.Indonesia was blessed with the charismatic and brilliant Sukarno.He united those polyglot islands into a cohesive nation while bravely taking on the Dutch colonialists at the same time.China has its Mao.However, as their uncritical followers did not rein in their leaders’ initial excesses, those leaders got carried away.
Making Malaysians More Critical
Malaysians are excessively deferential to their leaders, rarely challenging or even criticizing them.Our leaders are always clad in the finest fashion even when all they have on is a piece of tattered, stained loincloth.The relationship is akin to that of a flock of sheep and its shepherd, of blind obedience.
That may be fine for a flock of docile sheep but it is hardly the recipe for a progressive society.Nor is it the recipe for a competitive society, or at least one that would merit the adjective “modern.”In such a society, leaders must be held accountable, and followers in turn must not hesitate to hold their leaders to exacting standards.This reciprocal relationship means that followers must be willing and not fearful to criticize and challenge their leaders.That is the best way to ensure accountability.It would also discourage these leaders from being led astray by their blind ambition or abusing the trust we grant them.
Without being unduly Pollyannaish, the only way to make sense of the current political mess is to believe that this is part of a divine design, of Fate providing Malaysians with a “practise leader” in order to better prepare us for a real leader in our future.
There are two towering personalities in the horizon that fit my characterization of a real leader:Anwar Ibrahim and Tengku Razaleigh.In their previous incarnations, these two had their share of fawning followers who egged them on to make unwise decisions.For Anwar, it led to his imprudently challenging Mahathir.He (and us) knows only too well the disastrous consequences of that fateful decision.Tengku Razaleigh, again at the behest of his admiring supporters, left UMNO briefly to form the Semangat Party.
The problem is not with Anwar or Ku Li challenging Mahathir, rather that we as a society have yet to deal with or learn the art of challenges and criticisms.Our standard response then was either to split the organization or riot in the streets.Enter Abdullah as “practise leader;” now we have learned at least not to riot, a significant advancement.
I believe that Anwar and Ku Li are now wiser.They would be even better leaders if we let them be, meaning that we should not let our guards down lest they would be tempted to be led astray by their uncritical admirers.
On the personal side, I note a certain humility and magnanimity in both Anwar and Ku Li.To them, the travails and weaknesses of Abdullah Badawi truly pain them.To these two nationalists, challenging Abdullah is not a route for the fulfillment of their personal ambition, rather a patriot’s obligation.
To young readers who may not yet quite grasp the “practise wife” concept, let me substitute a sports metaphor.Abdullah is a convenient punching bag for Malaysians to practice on how we should learn to handle future leaders.For now, his ineptness and incompetence make those lessons easy for us, though not for Abdullah.
In Pram’s novel, the young nameless lady who is the nobleman’s “practise wife” returns to her village. Only through her strength of character could she maintain her dignity and respect in her village.
When Abdullah gets tossed out, as inevitably he would, lacking strength of character, the public scorn heaped upon him would be merciless.Abdullah’s predictable humiliation would not arouse any pity from
me, but his destroying what was once a fine Malay institution – UMNO – would.
The only redeeming part to the whole ugly saga would be that Abdullah would also bring down with him the “practise pundits” and “practise editors” in the mainstream media, as well as the “practise academics” and “practise intellectuals” in our universities.
In nature, genetic mutations occur spontaneously, but they can be induced through manipulating the environment or through chemicals and radiation. There is a similar cultural equivalent. Sudden changes in the physical or social environment, as in an unexpected calamity or arrival of a foreign power, could precipitate cultural changes. Following an earthquake the elders of an ancient society would gather around and wisely observe that what happened was God’s retribution for their errand and decadent ways. That often would be just the stimulus for them to mend their ways, for the better to be hoped. An example would be the acceleration of the Aceh peace talks following the Tsunami disaster. Not always, however. The elders could have easily decided that the angry Gods had to be appeased by sacrificing the tribe’s beautiful virgins. Were that to happen, the resulting cultural mutation would be negative. If nothing else it would ensure that subsequent generations would be ugly, the culture having depleted its stock of pretty would-be mothers.
Cultural mutations can also be triggered by changes in leadership. An enlightened prince could succeed his profligate father, or conversely, an otherwise benevolent king was not wise enough to override the cultural tradition of having the throne given to his first-born but wayward prince.
An example of a remarkable cultural transformation was that of the ancient Arabs with the arrival of Prophet Muhammad (May peace and the Blessings of Allah be upon Him!). Within a generation, a culture of female infanticide and justice based on an eye for an eye was emancipated. Like its genetic counterpart, cultural mutations too are unpredictable and often disastrous. For every prophet, there are others who would wreck untold damages upon their followers. Germany’s Hitler was a ready example.
Through the wonders of modern biogenetic engineering, scientists can effect genetic changes that are rapid and predictable. They can insert a desirable gene into a cell, and that cell will now produce whatever that gene instructs. This is how insulin is commercially produced today, with the human gene for insulin inserted to a bacterium that would then multiply, and the whole colony would now produce the hormone.
The cultural equivalent of biogenetic engineering would be the introduction of modern education. Earlier I alluded to the role of colonialism in effectively ending slavery in traditional Malay society. I am not glorifying colonialism, rather its unintended benefits, in particular the introduction of modern education and economic development to hitherto undeveloped societies. Those two elements in particular brought rapid cultural transformation.
Education opens up minds and liberates them, akin to removing the coconut shell from over a frog long trapped underneath it. Economic development brings its own cultural transformation. At its most elemental level, wealth is liberating. With it, the individual could travel widely (and thus become exposed to different people and cultures), buy more books and periodicals, and access modern communications like phones, the Internet and television. These are mind-broadening. Once you are exposed to the BBC and Al Jazeera, Malaysia’s RTM and TV Tiga no longer have quite the same hold on you.
The process of creating wealth is also transforming. Increasingly, wealth (at least the legitimate variety) is created through trade and knowledge. Today’s villagers know that their welfare depends on whether the Americans and Chinese are buying their rubber and palm oil. To these villagers, the Chinese and Americans are not some foreign devils or wannabe neocolonialists, but valued customers. That immediately puts a different perspective on the relationship.
Today’s transforming force is globalization. It would transform Malay culture more than colonization ever did, but without the ugly consequences. With globalization one is judged on one’s merit, regardless whether one is a Bumiputra or non-Bumiputra, son of a sultan or a villager, an UMNO supporter or PAS enthusiast. What counts is whether one can perform. Bumiputras, used to special privileges, fear that this would challenge their entrenched position. I argue the opposite. We should use special privileges to enhance our competitiveness so as to be better prepared for globalization, not to protect the status quo.
Today’s Malay society is more complex and diverse. In addition to the sultans and nobles, there are others—politicians, professionals, and businessmen—claiming the mantle of leadership. If the sultan were to fancy the prized racehorses belonging to one of his subjects, he had better be prepared to pay the market price. Nor would those children of former village peasants who are now doctors and lawyers look kindly were a sultan or bendahara (minister) stupid enough to snatch their daughters. Were a leader, sultan or otherwise, be stupid enough to do so, he would be slapped with criminal and civil suits right away. In the 1980s, one sultan-in-waiting, taking his symbolic role as commander-in-chief-to-be too seriously, slapped a soldier mercilessly, killing him. The crown prince was successfully prosecuted for attempted murder; nonetheless he subsequently went on to become sultan. Modernity coexisting with feudality; only in Malaysia!