It Takes More Than Just Money

It Takes More Than Just Money

M. Bakri Musa

www.bakrimusa.com

Engaging in trade and commerce involves the setting up of enterprises. They come in many shapes, sizes and types to serve a limitless variety of goals and customers. Starting an enterprise requires capital; not just financial, which is the popular assumption, but also the more important human and social capital.

            We are familiar with financial capital–money. Even the most economically illiterate Malay villager knows that you need modal (capital) to start a business. To them modal means money, and only that. In that respect they are no different from their supposedly advanced leaders who are also under the delusion that the key to successful Malay entry into business is only money.

            Based on that faulty and superficial thinking, Malay leaders focus on extending easy credit to these aspiring entrepreneurs. What these leaders do not appreciate, because they have never run a business, is that it takes more than just money to start and run a successful enterprise. Often money is the least important component because with a promising idea or product there will be no shortage of those eager to fund your business.

            At one time RIDA (Rural Industrial Development Agency), the precursor of today’s MARA, the agency tasked with encouraging Malay involvement in business, operated by disbursing loans to Malays who had some vague notion of starting a “business.” They had no skills or services to offer, but inspired by the rhetoric of our leaders, these Malays dreamed to be rich towkays (Chinese for tycoon) someday. In their imagination, they conveniently forget or choose to ignore the part of that proposition where you also have to work hard, remain frugal, and be patient.

            What these Malay leaders and would-be entrepreneurs did not realize was that those rich successful Chinese towkays had earlier spent long years toiling as unskilled laborers while patiently learning their skills as well as being frugal. Those Malay villagers saw only the successful towkays, not the hundreds of unsuccessful ones who squandered their money on opium, gambling, and prostitutes while dreaming of one day to “balik Tongsan” (return to China) with their riches.

            Had those potential Malay businessmen also seen the unsuccessful Chinese and Indians, those Malays would have had a more realistic assessment of the difficulties of starting and running a business. Perhaps then that would remind them to be diligent.

            My memory of those aspiring Malay entrepreneurs getting RIDA loans was their immediate indulgences. The first thing they did with their borrowed funds was to buy a new car to impress their clients. Never mind that they did not have any clients yet or that their store shelves were still empty as they had yet to buy their first inventory!

            It came as no surprise that the government’s early attempts at encouraging Malays to enter the business world failed miserably. There were no attempts to train or equip them with marketable skills. These leaders ignored the most important component–human capital.

            Had those MARA officials been wise and more resourceful, they would have instead focused on training these aspiring entrepreneurs to equip them with the necessary skills. Enhance their human capital before offering them financial support.

            Earlier I mentioned that during the Japanese Occupation, the authorities focused on training Malays in occupational skills, and then without any financial support from the government many of these individuals managed to start their own enterprises, again demonstrating the primacy of human over financial capital.

Next:  Elemental Capitalism

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.