Towards A Competitive Malaysia # 124

Chapter 19: Islam: The Solution, Not The Problem


Malaysia has the potential to play three major roles in contemporary Islam. As the most developed Islamic nation, it could be the model for others, imparting the important lesson that Islam is not an impediment to modernization; on the contrary it complements and indeed is a necessary element. As a plural society with significant non-Muslim minorities, Malaysia could teach the world a lesson on getting along with others of different faiths. Lastly, as a prosperous nation that spends generously on matters Islamic, Malaysia could lead the faith away from the suffocating clutches of the fundamentalists and help usher in its renaissance.

I have great confidence in Malaysia’s ability to fulfill the first role (as the development model for the Islamic world), somewhat guarded with respect to the second (leveraging its diversity), and utterly skeptical of the third (ushering in Islam’s renaissance). While Muslim Malaysians may have shown exemplary accommodations towards non-Muslims in the past, this is markedly less so today. Worse, Muslims are becoming even less tolerant of their own kind who do not subscribe to the “pure” version of Islam, as they perceive it. In Malaysia, you could be jailed without trial for reading Shiite literature. To put that in perspective, that was the same punishment for reading Karl Marx during the Communist Emergency.

I will review the potential success with each of these three possibilities.


As A Model for Development

It was an accident of history that made Malaysia opt for capitalism. The nation suffered through the brutality of the communist insurgency right after World War II. The British successfully equated that godless ideology with senseless violence and terrorism. Malays, being Muslims, also developed a visceral reaction against communism. The chaotic events then unfolding in Communist China cemented that sentiment.

Malays made no subtle distinction between communism and socialism; both were seen as variants of the same specie. Leading Malay socialists who are devout Muslims like Kassim Ahmad and Syed Husin Ali could not breach that insurmountable cultural barrier.

That is not to say that Malay leaders are enamored with capitalism or value its intrinsic merits and assumptions. Rather they have managed to enrich themselves through capitalism, at least the UMNO variety. Through the incestuous relationships these UMNO leaders create between the state and private sectors, they have become fabulously wealthy. Hence their fondness for capitalism, as they understand it.

Back in the early days of UMNO, the term kaum kapitalis (capitalist hordes) was particularly pejorative, conjuring images of American robber barons of the turn of the last century and greedy heartless factory owners of Dickens’ era. Capitalists were bad characters, intent on exploiting their fellow humans all in the relentless pursuit of profits. It helped considerably that at the time the capitalists were exclusively colonialists; it was easy to hate them.

Malaysia’s opting for capitalism thus represented the choice of a lesser evil (the alternative being communism or socialism) rather than a passionate embrace. Consequently, the lessons learned and the benefits accrued were not optimal. Nonetheless, free enterprise is now well entrenched in Malaysia, defects and all. There were brilliant attempts by Malay intellectuals like Kassim Ahmad and Syed Hussin Ali in seeking the “Third Option,” the synthesis of the market efficiency of capitalism with the egalitarian ideals of socialism and infused with the ethics and morality of Islam. Thus far their attempts have failed. Such fusion could only come from individuals well versed and practiced in all three spheres.

The current rigid educational system with its early streaming is unlikely to produce such individuals. Malaysia has many Islamic scholars but they are woefully ignorant of modern economic realities and political thoughts. Likewise, we have many economists, but they are ignorant of Islamic scholarship.

The first Prime Minister Tunku Abdul Rahman’s understanding of capitalism, in particular his concept of a minimalist governmental role in the economy, anticipated those of Ronald Reagan and Margaret Thatcher by decades. While Reagan and Thatcher were successful, economically and politically, the Tunku’s version culminated in the 1969 tragic race riots and his subsequent ouster.

Reagan’s as well as Thatcher’s minimalist governments worked wonderfully because their societies were not burdened by preexisting gross inequities (except those suffered by minorities, particularly Blacks and Native Indians in the case of America). In contrast, Malaysian society under Tunku was plagued with economic cleavages that also paralleled racial and cultural lines, making for an explosive mix. This was aggravated by the fact that those economically and socially marginalized were (still are) of the majority ethnic group.

Tun Razak, Tunku’s successor, had a nuanced understanding of capitalism. He recognized the deficiencies of capitalism, at least the predatory variety as practiced then in Malaysia. He effectively used the power of his government to break down the de facto existing monopolies and monopsonies, thereby reducing the barriers for new entrants into the economy. He made the economic playing field more level.

Tun Razak’s daring intervention in the marketplace, unencumbered by the purist’s definition of capitalism, was reminiscent of Franklin D. Roosevelt’s “New Deal.” Following the Depression, Roosevelt did not hesitate in “intervening” in the economy and “interfering” with the marketplace by introducing such enlightened polices as Social Security, price controls, and massive public employment projects. He aggressively pursued anti trust enforcements and broke up giant monopolies that had effectively controlled the American economy. Yes, there were howling protests from the market fundamentalists (their present day disciples still revile him), but Roosevelt made American capitalism that much more robust and efficient through his interventions. Likewise, Tun Razak made Malaysian capitalism more vibrant and responsive through his.

Mahathir’s understanding of free enterprise was also different. His experience as a petty trader during his youth (he is rightly proud of that), and later as a private medical practitioner, bred in him a dislike for the bureaucracy. He believed in the efficiency of the private sector and was contemptuous of the inertia of the civil service. When he became prime minister, he privatized many government agencies and functions a la Thatcher. Unlike her (she would let the market determine the winners and losers in her privatization bids), Mahathir declared that he should be the arbiter. He would select who should be awarded and be the beneficiary of the various plum privatized projects. There would be no competitive biddings or such like exercises. Mahathir intuitively knew who were the capable ones and who were not. This hubris would later haunt him.

Instead of selling Malaysia Airlines and other government assets to the highest bidders, he had “negotiated tenders” with his chosen winners. His rationale was to ensure that only Malay entrepreneurs (especially UMNO supporters) would get the plum projects. Mahathir produced entrepreneurs all right, but the pseudo variety, the “ersatz capitalists.” Worse, the government lost out in not getting the best price for its assets, and again later in having to expend public funds to rescue these failed privatized projects.

Tajuddin Ramli was one such favored Bumiputra. He was asked to buy Malaysia Airlines with the help of friendly financing from government-linked banks. He would later squeal and blame Mahathir and the government when that venture flopped. Before running the airline, Tajuddin was with a phone company. It was successful only because it had a monopoly, again courtesy of the government. The debacle at Malaysia Airlines demonstrates what happens when you let a novice Piper pilot command a modern Boeing 747 jet, metaphorically speaking. Yes, that pilot is stupid, even more stupid are the powers that be that let him into the cockpit.

Tajuddin had neither the training nor the experience to run an airline. He could not tell the difference between the yoke and the throttle; worse, he did not recognize his ignorance, a common trait among nincompoops. If he had had more humility, he would have sought out competent assistance. Yes, I condemn Tajuddin, but I blame Mahathir more. The consequence was not just the debasing of a valuable national franchise, but in giving the whole Malay race a bad name. We could always rescue Malaysia Airlines by bringing in competent management, but resurrecting the honor of the Malay race would be much more difficult. The likes of Tajuddin have busukkan maruah Melayu (brought dishonor to the Malays).

Both Tunku and Mahathir had it only half right in their understanding of capitalism, and both paid dearly for their lack of full comprehension. Tunku believed that capitalism was essentially perfect, mere mortals like him did not have the power or ability to better it. Mahathir’s view on the other hand is that capitalism is essentially evil, a construct of the White Man to exploit and dominate the natives; nonetheless there are useful elements that he could exploit. The 1969 riot was the price Tunku paid for his lack of full understanding; it was instrumental in his premature retirement. The 1997 Asian economic crisis humbled Mahathir.

It is too soon to gauge where Abdullah stands with respect to free enterprise. Thus far he is reduced to mindlessly uttering trite free market slogans, more to please his Western audiences. He is no economist, but that should not be a barrier to understanding basic economic concepts. Millions of successful entrepreneurs had no inkling of economics; they just know it intuitively or through reading and their everyday business experiences. Abdullah does not read widely, and unlike Mahathir, has minimal private sector experience. His only foray into commerce was as a travel agent in his sister-in-law’s agency after he was booted out of Mahathir’s cabinet for supporting Tengku Razaleigh in the hotly contested UMNO election of 1987. That was the sum total of Abdullah’s private sector credentials. It is also instructive that such was the market’s valuation of his talent and experience, despite having served in such prestigious positions as Minister of Foreign Affairs, Defense, and Education!

Malaysia should embrace capitalism with enthusiasm. It is essentially a benevolent system but with imperfections that the government should be prepared to remedy. Besides, it is the only system that has brought the greatest amount of good to the greatest number of people. There is no other better system. America is trying to spread the gospel of democracy and capitalism in the Muslim world, but she is an ineffective and not credible advocate. America should instead use Malaysia as its conduit. Were that to happen, it would be wonderful for Malaysia, America, and the world.

America’s attempt thus far is limited to sending roving ambassadors and prominent Muslim Americans to Islamic capitals. Commendably, America is also giving educational grants to Muslim countries like Indonesia. Saudi Wahabbi organizations have been doing that for years, indoctrinating young Indonesians with its version of Islam. America also generously aided Indonesia during the 2004 Tsunami. That did more to change for the better the Indonesians’ perception of America.

America’s many goodwill gestures are negated by its military adventures abroad especially in Iraq. That mission is degenerating into a quagmire, and a very expensive one economically as well as in human terms. The Muslim world through the Organization of Islamic Conference should proactively work with America to resolve this tragedy instead of smugly watching America being humiliated. America may be humiliated, but it is fellow Muslim Iraqis who suffer most. As leader of the OIC, Malaysia should initiate the process. That could be the beginning of and the stimulus for fruitful co-operation between the West and the Islamic world that would benefit all.

One initiative would be to replace American troops with those from willing Muslim nations. If America were to pay those Muslim soldiers half of what American soldiers get, there would be no shortage of volunteers. This would lessen the American load both in human and monetary terms. The insurgents would quickly lose their propaganda were they to kill or maim these Muslim troops. Presently, with every American soldier killed, the standing of the extremists among the Iraqis soars; likewise when American soldiers barge into Iraqi homes in search of insurgents and find none.

America has outsourced just about everything; why not its military function? If OIC were to take over, America could divert the considerable savings to productive investments in education in the Muslim world. I would focus on Malaysia, as it is one Muslim country hospitable to and welcoming of America. Thousands of Malaysians have either studied in America or were taught by Americans in Malaysia. Many more have worked with American companies. There is a deep reservoir of goodwill towards America, its adventures in Iraq notwithstanding. Malaysia also has, among Muslim nations, the highest English literacy rate. One avenue of cooperation would be to enhance education in the Muslim world. America should “out Wahhabi” the Wahhabis by building schools, providing books and teachers, and help design the curriculum. The results would be millions of young Muslims sympathetic to America, just as they are now to the Wahhabi.

America is currently initiating such ventures in Indonesia. Rest assured that America would reap significant dividends. Such social investments would do more good than the hundreds of millions America spent in arming the Indonesian military.

To make such schools appealing, add an Islamic element into the curriculum in the manner of Catholic schools in America. Islam would only be one subject, with the rest of the curriculum filled with modern ones. The Islam taught would not be the Wahhabi variety but the more tolerant pattern as seen in Indonesia earlier. There is no shortage of teaching materials and books published in America by progressive Muslim groups that present Islam in its pristine and tolerant version. One is the California-based Council of Islamic Education (ww.cie.org), whose textbooks have been adopted by many school systems.2

America should also provide the teachers. Have a mini Peace Corp of teachers, recruiting in particular Muslim Americans. This would also expose young Muslims to a different breed of Muslims—American Muslims. These endeavors could be done through private foundations.

Such goodwill gestures would go a long way. I remember well during my school days of getting books from the American Embassy stamped, “A Gift from the People of America to the People of Malaysia.”

At a higher level, America could establish a series of American-model universities and colleges in Muslim countries. The American University in Beirut has done more than any institution to nurture Arab intellectuals and scientists. The Aga Khan is building an American university in Central Asia, staffed by American academics with American-style broad-based liberal tradition. The Aga Khan’s medical school in Pakistan, modeled similarly, quickly became the leading institution in that country.

Private American universities are expanding in many Muslim countries especially the Gulf States. One criticism to this otherwise admirable endeavor is that those institutions, being private, cater only to the rich. There is no attempt at broadening the application pool to be need-blind.

I would extend such educational efforts downwards to high schools. There is a hunger in the Muslim world for the American-model liberal education. Malaysia is striving to be the international center for education. There are formidable competitors with Singapore fast gaining the lead. Thailand is liberalizing its system and attracting many international schools. These countries aggressively recruit foreign students. There is a huge untapped market ready for Malaysia: foreign Muslim students. Malaysia has the competitive advantage in being affordable and having an Islamic ambience.

Malaysia’s International Islamic University, sponsored by OIC, is attracting many Muslims from abroad. As it uses English, it also attracts many non-Muslims. Unfortunately its academic ambience is still Third World. Imagine how attractive a similar university would be if it were based on traditional American liberal education!


Next: Encouraging Intra Muslim and Muslim-American Trade