Malaysia in the Era of Globalization #41

Chapter 5: Understanding Globalization (Cont’d)

Globalization and the Free Movement of People

Earlier, I alluded to the fact that unlike imperialism where there was mobility of labor, today’s globalization does not have the comparable freedom of movement of people. Unlike goods, services and capital that can slip in and out of borders readily, people still have to go through tedious immigration controls. Leaders like Mahathir challenged advocates of globalization to also equally liberalize immigration, that is, to make the movement of people as free as that of ideas and capital.

Much as I agree with this ideal, it is unlikely to happen, given present-day realities. Western countries that are today’s champions of globalization have elaborate social safety nets for their citizens. Indeed the greatest asset one can have at birth is not one’s set of genes, rather one’s birthplace. There are significant benefits just by being born as Americans or Western Europeans regardless whether you are contributing or not. These include free education and other generous entitlements. No wonder these citizens want to restrict immigration; it is a manifestation of the classic “rent seeking” economic behavior.

Despite the various immigration restrictions, there is nonetheless considerable mobility of workers today, but only for those at the two extremes: the highly talented and the unskilled. Someone with a Wharton MBA or Caltech PhD will have no difficulty securing a permanent residency status in America or elsewhere; so too talented artists and athletes. American college recruiters scour African villages for potential basketball players and track runners. Cuba and the Dominican Republic have little chance of retaining their marquee baseball players; they are sucked up into America.

These highly desirable individuals do not have to line up at the nearby American embassy for their visas. Their coaches or corporate lawyers would do that for them. For these fortunate souls the market for their talent is truly global, oblivious of national boundaries.

At the other extreme – the unskilled and the desperate – for them national borders too are irrelevant. Every day thousands of Mexicans slip through the porous southern border of America. Immigrants from Africa and Asia smuggle themselves in by a variety of ingenious and dangerous ways. Every so often a rusty trawler full of desperate Chinese or Indians would beach upon American shores.

The challenge for Third World countries today in the face of globalization is how to retain their highly skilled and talented citizens so they will not succumb to the lures of the developed world. In the past, appeals to nationalism and patriotism would keep them at home (at least some of them), but today such calls would fall on deaf ears. The only way to retain them is to give them their dues. This means paying the going global rates, not puny local salaries. Some countries like Singapore are aware of this and are appropriately rewarding their talented citizens with world-class pay. Many others, Malaysia included, have yet to learn this elementary lesson and are still in the mode of appealing to emotions. Sometimes that works, but most often not. There is a limit to what people would sacrifice.

Leaders like Mahathir who advocate the free movement of labor have to be careful for what they wish, for if it were to become true, the losers would be Third World countries like Malaysia. Imagine if anyone can enter America and Britain; what chance would Malaysia then have in retaining her brightest and talented citizens? They would all emigrate and Malaysia would be left with the losers, and the unskilled illiterate immigrants from Indonesia and Bangladesh.

With the spread of ideas, there would inevitably come a convergence or agreement on what is valued and what is not. That is, the emergence of a global standard or yardstick. I do not refer to the value system or the sense of esthetic, but more to mundane issues like quality of medical care and education. When Malaysians read about new advances in heart surgery elsewhere, they would not be satisfied if their local doctors were to stick with the old remedies. Malaysians too want the best for themselves and their loved ones. If they cannot get that at home they would go abroad. It is not just the King who goes to Singapore to get his pacemaker; every Malaysian too would sacrifice to get the best.

The only way for Malaysia to stop the exodus of local patients would be to train local experts to meet international standards. When Petronas was building its Twin Towers, it searched the world for the best architects and engineers; there were no nationalistic considerations given for such a high profile project.

The growth of private colleges in Malaysia is due to the widespread perception that local public institutions are not doing a good job. How do ordinary Malaysians know this? Well, they read about the achievements of leading universities elsewhere and then draw the conclusions.

Further, when local parents see graduates of foreign universities and local private colleges being eagerly sought for and paid more by employers, these parents would save hard to send their children to such institutions.

Singapore has very few private colleges because its public ones are so superior; private colleges could not compete easily. Only the prestigious foreign ones like Johns Hopkins, INSEAD, and the University of Chicago could compete in such a competitive environment. East London University need not bother entering; it would not survive the rigorous competition.

Medical care and education are only two examples. I can cite many more. Malaysians, having flown in the best airlines and stayed at the best hotels, would not patronize Malaysia Airways and local hotels if they do not have comparable levels of services. Just being a Malaysian establishment no longer sells. Like it or not, we have to adopt international norms and standards because our people demand them.

Next: Maximizing the Benefits and Minimizing the Downside of Globalization