By M. Bakri Musa
Chapter 5: Understanding Globalization
Foreign Investments in the Third World
Countries like Malaysia that were once colonized are rightly sensitive about their independence. Thus they tend to look upon foreigners, including investors, with suspicion. The typical Third World initial experience with foreign investors had been with companies of imperial powers. These companies were concerned primarily with plantations and extractive industries. In Malaysia they were involved in rubber plantations and tin mining. The exploitative nature of such investments was quite obvious. Rubber, tin, and other precious commodities were exported to Britain where they were turned into high-value manufactured goods and then sold back in Malaysia and elsewhere at exorbitant prices. Meanwhile the rubber tappers and tin miners were paid pittance for their efforts. The bulk of the profits were kept in Britain with little if any repatriated to Malaysia. No wonder such investments became easy targets for the nationalists.
Even though those early investments were clearly lopsided and exploitative (asymmetric, to use a modern phrase), nonetheless Malaysia benefited immensely. First, the country would never have known that it was capable of growing rubber had the British not started the plantations. Rubber is not indigenous to the country; the British brought the seedlings from South America via London’s Kew Gardens.
Second, such investments ushered the nation into the world economy. Thus events in other parts of the world impacted Malaysia. Conflicts in the Korean Peninsula in the 1950s resulted in a heightened demand for rubber and the consequent bonanza for Malaysian rubber producers. But it was short lived. With the discovery of synthetic rubber, the bloom was off. Tin too enjoyed an unchallenged market for a while until the ready availability of aluminum brought on by cheap hydroelectric power adversely affected the industry. Now “tin” cans are made of aluminum, and the market for tin collapsed.
For Malaysia these new industries also added a new and volatile political dimension: massive immigrations and the consequent race problems. Pressed by the need for cheap labor, thousands of penniless foreign coolies from China and India were imported, saddling the country with ethnic problems that it is only now beginning to come to terms.
As an aside, we should not blame the British in this regard; economic necessity dictated it. Decades later, independent Malaysia too had to import literally millions of cheap foreign labor to man its industries. Economic dynamics do not recognize race or ethnicity. Employers, local or foreign, native or colonial, always look for lowering the costs of production, and if that involves cheap foreign labor, so be it. In this regard present-day Malaysian political leaders are behaving very much like their earlier colonial masters whom they despised and severely criticized for making decisions based on short-term economic considerations and oblivious of the long-term social consequences.
With the lopsided nature of these early investments, it did not take long for ambitious native politicians to exploit the issue. These colonialists were now also hated as capitalists, out to exploit workers and natives (the two were often synonymous) all in the name of profits. All the good that these companies had done for the host country were forgotten in the nationalists’ rhetoric. The natives had conveniently forgotten that before those rubber plantations came into being, the landscape was nothing but impenetrable jungle. As for the tin, it remained buried underground.
Not surprisingly, with independence the first order of business for these new leaders was to nationalize these industries. They were visible reminders of colonial power as well as symbols of the exploitation of workers (read: natives). Besides, many of these leaders, having been trained at such elite institutions as the London School of Economics, were enamored with central planning and state socialism. They figured that they could run these industries better than the colonialists. The results, as we can now see so readily in Zimbabwe and Zambia, are disastrous. Once productive factories are now rusting under the tropical sun, and the ever-aggressive jungles now reclaim once thriving plantations.
Malaysia took a slightly more sophisticated route but the end results were the same. Instead of outright nationalization, it used its various state corporations to trigger corporate takeovers of these publicly listed colonial companies. Seasoned foreign managers were replaced by less-than-competent but politically powerful local operatives. To cite one particularly outrageous example, Ghaffar Baba, a top UMNO functionary but a man singularly lacking in experience or training in business or management, was made in charge of some of these blue-chip companies. Today not only is he a discredited politician, but he had been named in at least two personal bankruptcy suits. So much for his financial acumen! Sadly there are many Ghaffar Babas out there. Once great names in plantations (Guthrie, Socfin) and mining (Idris Hyraulic, Rahman) are today nothing but hollow corporations, more concerned with developing their real estate holdings than expanding their core expertise.
The next experience with foreign investors was during the pioneer industrialization phase in the decade following independence. These were aimed primarily at import substitution, to save foreign exchange. These second wave of investors were greatly welcomed as they were readily seen as contributing directly to the nation’s well being, first by producing much-needed consumer goods locally, and second for their export earnings. So enamored were Third World countries with these investments that they introduced various incentives to lure investors, including guarantees of a protected home market and generous tax incentives.
This Import Substitution Industrialization (ISI) mindset was popular in the 1950s and 60s in tandem with the dependencia thinking. This mindset looked upon trade as a “zero-sum” exercise: developed countries’ gain must of necessity be at the expense of developing countries. These “infant” industries were thus protected by tariffs to prevent “unfair” competition from well-established foreign firms. It did not take long for these protected industries to ante their demands, which were readily acceded to by a corrupt government. Insulated from the rigors and discipline of the marketplace, these companies would soon become flabby and non-competitive, their products expensively priced but shoddy.
Despite such outcomes, countries like Malaysia remain addicted to such protective instincts, inspired by the apparent successes of Japan and other East Asian countries that had instituted similar protective barriers. I say apparent because today these countries have lost much of their luster. The then prevailing view was that because of the protection afforded, their “infant” industries were able to develop gradually and learned from their mistakes. From those tentative steps in an insulated environment, they were then able to grow and then take on the world.
We all remember the crude jokes of the 1950s and 1960s on what “Made in Japan” implied! Today nobody remembers those ugly jibes anymore. If Japan had not protected those industries, so the argument went, they would not have had a chance to mature into their present highly competitive stature.
Indeed Japan’s success spawned many imitators, especially Malaysia. So impressed was Malaysia that Mahathir started a “Look East” policy in the early 1980’s to ape the Japanese. Come the 1990s however, Japan was a bust, its industries moribund and economy sputtering.
What gives? I will pursue this analysis in the next section.
Next: Missing the Japanese Lesson
Look East policy is not going to work because even though the government encourage Malaysians to follow Japan’s example, the majority of Malaysian mindsets are still looking at Middle East.
Instead of following Japanese work ethics e.g. Ganbatte (do your best), Malaysians prefer to imitate Pak Arabs who lived on subsidies from oil money. Malaysians try to outdo each other by being more Arab than others and also more Arab than the Arabs.
Bakri Musa expanded a great amount of energy and time to point out the evil ways of umno. But it will not change anything. Not with umno. This is so depressing. We have no way out. Umno controls everything in the country. From the rubbish collector to the judiciary. Our only chance is GE13. The GE12 experience showed us for the first time the real power of the ballot box.
Let me recount something a client told me recently. It was about his personal experience. Something that was told to him in his face. Nothing racist really in content but a very true reflection of umnoputra’s mentality and their unbaked and uncooked beliefs.
My client has a number of umnoputra customers. Actually they are now friends. One of them told my friend not too long ago that chinese are smart and very capable. That chinese are prepared to work hard and they make a lot of money. In spite of that, in his opinion “But we malays are better.” And his reason for saying that (brace youself for this one fellas): “Because we just take the money from your pocket.”
50yrs of independence. 40yrs of NEP. 30yrs of affirmative assistance and 20yrs of dr mamak. And that is where we as a nation are, now. Low, crude and stupid.
“Because we just take the money from your pocket.”
The Question is, if without financial discipline, how long will you keep it without it coming back to my pocket (especially in an economic upheaval)?
///“Because we just take the money from your pocket.”///
Only Muhyiddin talks about Malays should have nothing to do with non-halal money while others just dip into the pocket which might even be soaked with lard. Muhyiddin never said he would not touch non-halal money. So he considers himself not Malay because he would never return money he collected as government pay. Well, that could be understandable because he still insists that Malays are at the special position requiring special care; quite unlike Tun Dr Ismail who was DPM then and he said that out of pride Malays would give up crutch. That was 40 years ago. 40 years and two generations later, Malays who have been supported for the past five decades cannot even look after themselves if Muhyiddin’s claim is to be believed, then Muhyiddin must be suffering for not having the pride to say that his race can actually look after themselves. So Muhyiddin was actually luxuriating in that comment. He might be like Mamakthir who is something else inside but still enjoys the special treatment offered to Malays.
Chinese and Indian were bought into Malaysia because they were hard-working and have much better working discipline. In some way they had been slaved!!
The Chinese had Confucianism in blood for family and society while the Indians most probably had the yoga-spirit for survivial. The benifits of all these were only enjoyed by those Malays and colonists in power, and, not the many average Malay. The latter should in fact be facing keen competition but paralysed by the then “Bumi” policy which was and is enjoyed mostly by those cronies in power. The policy of “stealing” from non-Malay to Malay, and, not a policy for promoting or improving Malay for better in a practical sense, except “idleness as usual”!! A sugar-coated Policy but with anaesthetic if not poison for the sake of getting votes!! The Malays in general are marginalised with “unconsciousness” of being part of a nation after being offered a tiny part of the ambition of those power-thirsty politicians.
The main problem remains that those in power or the colonists are looking for their own benefits rather than for the overall benefit of the People and the Nation!!
Globalisation can hardly be realized and implemented in Malaysia because of the mindset of those in Power and the unconsciousness of most People (including all races) to grow together for the benefit of a nation. Those in power are thinking of how to abuse the People to get the benefit. And, the People are busy trying to find shelter or way to stay away from the Abuses!! Or, in the agony of trying to recover from the Abuses. Or, just join the current!!
The Abuses are not only in the Politic, Administration but anywhere in Commerce or economic because the mindset of many or most People or those runing the sectors are only care for their “own benefits”!!
Justice, Rules and Regulations are only meant for Decoration!!
Money over Dignity!!
The hearts for Right and Wrong had gone!!
What Change many Asian Countries into what they are or heading today are not found or even exist in Malaysia!!
Money over Dignity!!
The Dignity of one who has Duty to Perform!
The Dignity of one who has Ethnic to observe!
The Dignity of one who has Professionism to follow!
The Dignity of one who has Discipline to maintain!
The Dignity of one whose Talks and Walks are to be watched!
The Dignity of one who should hold Justice for livelihood!
etc..
They are all covered by greediness of money, power, relationships, …..
“Give him a chance” then come the Datukship but betraying what had not been authorised by her 10000’s members!!
etc…..
What Ingredients Malaysia has to stand at least not shorter than many of the East before Globalisation?
The Up-climbing of the West and Japan, in many way can be considered as rooting by the daring of the Countries to create “personal credibility” by means of mortgage, credit cards, credit line for individuals and corporation. The dare of using these kinds of future money into the actual development and construction of their countries, even these future money are to be repaid in 20, 30 or more years. The Government, the commerce and the individual are hooked together with the sharing contribution from each and every sector related. They will fall when hanky-panky are there with careless to monitor or enforce. The accountability, transparency and efficiency have made it possible with rectification and monitoring from time to time.
Because of Globalization, they have to meet the challenge and competition worldwide. The problem with Japan is they have to compet with their neighbours – China, Korea, India…..The latters are an element causing the burst of their bubbles. But, they still stand up right because their business has been globalized with manufacturing, investment, research, education, etc.. in hands with other nations with investment and co-operation and a working Government with responsibilty and duties under monitor.
China, with its huge population, market, manufacturing, technology, educational development into different industries and section and with their capability and experience in international trade and relationship have given much pressure to both East and West.
Malaysia has used similar financial tools for creating credits, even with the support of the Law – but lousy acts, such as STA, Housing Act, etc,, and under duty ignoring Ministry, . With such, these credits had been manipulated by many Developers so the credits for housing are bubbles. The poor governing of BNM does not turn banking as competitive or law-binding as it should be. How much water are in the books of many listed companies are yet to be found, including those of the Government with loosely attached Corporations that cannot be even reached by the Auditor General!
The burst of the Japanes should be seen more to be by external factors. The burst of Malaysia, depending when, are due to internal parasitic infection with efforts to rots and not with the heart to build!
Pensions are one of the important financial pillars for developed countries. What has the Malaysian Government done with it?
Banks are earning millions every years. But, BNM close their eyes on banks bullying clients even with dishonesty in transactions and charges!! Just as many other Government Departments, they just play deaf and dump to complaints or enquires.
What to make Malaysia financially sound or compatible to many countries in the East without any or too many of positive factors for proper maintainance of the Administration, Banking, etc.. Or, to stand the waves from outside!!
Look East or West cannot help when the heart for the Nation or People had gone!! When only parasites or cronies for powers have been the only aim for going into the Administration.
Find the Heart,
Find a Human Heart compatible to East or West
before Globalisation!!
No way to go with a ship of many holes overloaded with parasites and “crocodiles”!!
He said that “it is time for moderates to reclaim the agenda for peace and pragmatism… there was a need to marginalise the extremists, saying a “global movement of the moderates” of all faiths was needed to work together to make this a success….These extremists had held the world hostage with their bigotry and bias, adding that “we must choose moderation over extremism”.
Since the above speech could not get him the cherished Nobel Peace Prize, PR should set up a “Mata Sepet & Kaki Botol Prize” to present it to him.
Standing at a stage can play King or Queen. Even being a King, can also be “King with his NEW CLOTHES”!!
Going thru periods of Mongolian C4, ….Sibu Election….HE surely is moving up at the STAGE. A stage which does not meant to be for a PM!!