Category: globalisation

By M. Bakri Musa

Chapter 8: Culture, Institutions, and Leadership

Economic Culture of Malays: Our Purported Lack of Learning And Savings

Another pat explanation for Malay backwardness is that we do not save. The resounding success of Tabong Haji narrated earlier gives lie to this claim.

There are of course many productivity-eroding habits of Malays. While I expect these to persist among rural dwellers out of ignorance, I would expect better from the more educated urban elite. Earlier I wrote about Deputy Prime Minister Badawi not being able to afford a home but could put on a lavish wedding, but ponder the following.
Continue reading “Malaysia in the Era of Globalization #65”

By M. Bakri Musa

Chapter 8: Culture, Institutions, and Leadership

Economic Culture of Malays

The aspect of Malay culture that is pertinent here is the subset termed “economic culture,” that is, the beliefs, attitudes, and values that bear on the economic activities of individuals, organizations, and other institutions (Porter’s definition). I will analyze these on whether they are productivity enhancing or productivity eroding, that is, whether they add to or take away economic value from society.

I will concentrate on the three factors that, as previously alluded to, lead to progress or advancement of society. These are the cultural attitudes toward work, savings and frugality, and learning. First I will dispose of some stereotypes, indeed caricatures of Malays: we are lazy, do not save, and have no passion for knowledge. At the 2001 UMNO General Assembly, Mahathir introduced yet a fourth stereotype: Malays are an ungrateful and forgetful bunch. I simply dismiss this latest caricature because these traits (ungratefulness and forgetfulness) do not have any bearing on economic activity.
Continue reading “Malaysia in the Era of Globalization #64”

By M. Bakri Musa

Chapter 8: Culture, Institutions, and Leadership

Negeri endah kerana penghulu. (Great nation, great leader.)
—Ancient Malay Proverb

There is now gradually emerging a common Malaysian culture. Part of this is the result of a deliberate official policy, but more likely it is the natural consequence of people living and working together. I posit this process would have gone further had there been no governmental policy promoting a common culture. It is a predictable human reaction to be defensive and protective of one’s heritage when threatened.

In America there is no stated policy of Americanizing new immigrants, nonetheless new arrivals are always eager to join the mainstream. Within a generation, new Americans are already fully acculturated. Similarly, early Chinese immigrants to Malaysia, the “Straits” Chinese, readily adopted the Malay language and way of life precisely because the government and polity of the day were not harping on the issue of a “national” culture. Likewise, early Indian Muslim immigrants to northern Malaysia blended easily with native Malays, aided undoubtedly by the commonality of religion. Mamak Malays, as they are called, are fast vanishing as a subculture as they have become completely assimilated, with some becoming ministers and even Prime Minister!
Continue reading “Malaysia in the Era of Globalization #63”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Competition in the Public service

There should also be competition in the public service and society. Today for example, admission into the public administrative service is almost exclusively from the liberal arts stream. Widen the talent pool to include anyone with a degree; actively sought engineering and science graduate. With their quantitative skills they would make excellent managers.

Promotions within the civil service are exclusively from within, hence its present intellectual and professional insularity. Revamp the personnel policies that state you must have five years seniority before you can be promoted to a senior management (“superscale”) position. This unduly restricts the much-needed infusion of fresh talent at the upper levels. When one examines the resume of the heads of ministries (Secretaries General), they are almost always liberal arts graduates even in those ministries with high technical component like the Energy, Public Works, and Transportation. I would have thought that an MBA in finance would be the necessary qualification for a senior position at Treasury, but few in that department have this qualification. Thus this embarrassing response from a former senior Treasury official I met recently when we were discussing interest rates, “An interest rate hike of 5 to 6 percent represented only a 1 percent raise!” To those with even the minimal understanding of simple arithmetic, that represented a massive 20 percent hike!
Continue reading “Malaysia in the Era of Globalization #62”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Sharpening Malaysian Competitiveness

Trajectory of Progress

Advancement or improvements in a society, like elsewhere, occurs along two patterns. One is the rare person or event that comes once in a while that will radically alter the way we look at things and solve problems. There is no way to predict or encourage this. Discoveries of the steam engines, and later the internal combustion engine, heralded the Industrial Revolution; the integrated circuit (IC) sparked the IT revolution. Similarly with rare individuals like Bill Gates or Ted Turner (the man who started the all-news network, CNN); you cannot train or nurture them. These are random and unpredictable occurrences.
Continue reading “Malaysia in the Era of Globalization #61”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Sharpening Malaysian Competitiveness

Ensuring that the citizens are healthy and well educated is the first step in turning them into productive and contributing members of society. The two are enabling conditions or prerequisites, but Malaysia needs to go beyond that to ensure that her citizens, and thus the nation, are competitive. The surest way for Malaysia to thrive with globalization and free trade would be if her citizens could produce goods and provide services at a better price and quality than anyone else.

There is no way to predict which individuals will be able to do something better (more competitive) than someone else. In feudal societies birth and social ranking determine one’s place in society and what one does. Children of nobility and royalty are born to rule others, while those of the warrior class will continue to become warriors, and children of peasants are fated to remain as peasants. This is not a design of nature, rather shaped by the social norms and culture. Were human societies like colonies of bees, yes, biology would then rule supreme. It is biology that determines whether individual bees would become the queen, drone, or worker bee.

In modern societies, it is the individuals who determine their own fate. Continue reading “Malaysia in the Era of Globalization #60”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Enhancing Human Capital Through Education: Revamping Schools and Universities

The Malaysian government recently published a massive plan, Educational Development – 2001-2010, aimed at revamping the entire education system. However, only a year earlier it had undertaken another massive revision of the curriculum, and that project was yet to be completed (it was not yet begun to be implemented!) when this new policy was unveiled. Despite its 250 pages, replete with the obligatory buzzwords like knowledge workers, IT revolution, and globalization, the report fails to address the glaring inadequacies of the present system. These include the atrociously low standard of English, abysmal levels of science literacy, and appalling mathematical skills of our students.

To address the increasing disadvantage that graduates of public universities face because of their low English fluency, the government proposes to have private institutions use Malay as the medium of instruction. In other words, handicap everyone to the same level of mediocrity!
Continue reading “Malaysia in the Era of Globalization #57”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Enhancing Human Capital Through Education (Cont’d)

Malaysian schools today are a far cry from their earlier days. At the recent Third International Mathematics and Science (TIMS) assessment, Malaysia stood way behind South Korea, Japan, Taiwan, and Singapore. But our leaders are not embarrassed by such comparisons; they keep harping on how Malaysia is the “center of educational excellence” – for the Third World. Malaysian leaders eagerly compare the nation to the likes of Zambia and Malawi so they can pat themselves heartily. When you cannot measure up, why, simply change the yardstick! Or choose a less competitive league.

Malaysia should do to its ministry of education what the Russians did to the former Soviet empire: dismantle the massive ossified structures; decentralize its immense authority; and privatize its myriad activities.
Continue reading “Malaysia in the Era of Globalization #56”

By M. Bakri Musa

Chapter 7: Enhancing Human Capital
Enhancing Human Capital Through Education

Globalization is driven essentially by knowledge; the new economy is appropriately called the K(for knowledge)-economy. Knowledge is the important ingredient of the new economy, and also its measure. Knowledge has replaced the economists’ “factors of production” – land, labor, and capital – as the chief economic resource.

The philosopher Saidina Ali perceptively observed that knowledge, unlike wealth, protects us under all circumstances, but we have to protect our wealth constantly against theft and inflation. The world around may crumble but with my knowledge and skills as a surgeon, I can still contribute and be productive. Further, wealth is diluted when shared; knowledge on the other hand, increases and gets enhanced when shared. A discovery in one field often stimulates innovations in another, thereby increasing our overall knowledge. Knowledge is also amplified through such exchanges. The nuclear magnetic resonance (NMR) that was used initially in basic research to identify chemical molecules is now used routinely in clinical medicine. Indeed the market for this is worth considerably more. Wealth if kept secret may retain its value, but knowledge kept secret will quickly become obsolete and worthless.
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By M. Bakri Musa

Chapter 7: Enhancing Human Capital

Enhancing Human Capital Through Better Health

Good health is good for the economy. A National Bureau of Economic Research (NBER) paper showed that a one-year improvement in a country’s life expectancy (an index of health) contributes to a four percent increase in its economic output, and that good health has a greater impact on the economy than work experience or years of schooling.

The World Health Organization’s (WHO) Commission on Macroeconomics and Health (CMH) Report reaffirms the powerful link between health, poverty reduction, and economic growth. The report challenges the traditional argument that health of the citizens will automatically improve as the result of economic growth. Indeed the opposite is true; improved health is a critical requirement for economic development in poor countries.
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by M. Bakri Musa

Chapter 7: Enhancing Human Capital
Adding Value to a Routine Airport Taxi Ride

The second anecdote concerns an airport trip in Atlanta my wife and I took after a medical convention. On discovering that a limousine was only slightly more expensive than a taxi, we decided to go in style. We stepped into this luxurious limousine, with the driver in tuxedo no less, dutifully opening the door and helping us in. I felt like a celebrity, or perhaps a sultan. The driver inquired of our flight and he immediately phoned ahead to find its status. As the flight was going to be delayed, he suggested we take the scenic country road. Normally he would charge extra for such a detour but since he would be saving gas by not getting stuck on the freeway at peak commuting time, he would dispense with it. Delighted, we cheered him on. He also welcomed us to some complimentary beverages and fresh fruits from his small fridge. We felt vindicated; the extra cost more than compensated by the freebies!
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By M. Bakri Musa

Chapter 7: Enhancing Human Capital

People are the real wealth of nations.
—UNDP Human Development Report 2001

One surprising observation following the American stock market meltdown of October 1987 was that there was very little change in the behavior of American consumers. The Dow Jones Index may have dropped by over 40 percent but stockbrokers and their clients did not jump off the skyscrapers on Wall Street. Citizens did not hoard food or withdraw their savings as they would when faced with major uncertainties. Nor did they withhold spending in anticipation of tough times. To be sure the sales of luxury cars and yachts were dampened, but by and large there were minimal changes in the economic behavior of Americans.

Citizens’ reactions in Malaysia to the much more severe economic crisis of 1997 were also similar to the Americans’. Both were in marked contrast in nearby Indonesia, where the nation was nearly ripped apart because of the economic crisis.
Continue reading “Malaysia in the Era of Globalization #52”

by Bakri Musa
Malaysia in the Era of Globalization #51

Chapter Six: Malaysia: Assets and Liabilities

Enhancing Special Privileges

To enhance the efficacy of special privileges I would first focus on the bottom 50 percent (better still, bottom 25) of Bumiputras. I agree with Grameen Bank’s Muhammad Yunus who feels that development should be defined to mean positive changes in the economic status of the bottom half of the population. Consequently I would cut off the top quartile Bumiputras (or those with certain net worth or income) from special privileges. Such a modification would effectively target special privileges on truly needy Bumiputras. At the same time it would reduce the resentment felt by non-Bumiputras. Disqualifying ministers, top leaders, royal families, and affluent Bumiputras would also have the additional salutary effect of forcing them to be self-reliant.

This “means testing” at the gross level would not entail much administrative costs or erecting another huge bureaucracy. A simple statuary declaration under sever penalty of perjury and intent to defraud the government would deterrent enough. For added weight, have those applying for benefits of special privileges submit their or their parents’ previous year’s tax returns.

For the royal class, I would eliminate many of their present tax-free privileges. Make them pay their share of income, property, road and other taxes. If Britain’s Queen Elizabeth has to pay income tax, Malaysian sultans should also do likewise. The aggregate impact of such measures on the Treasury would be minuscule, but the psychological benefits to members of the royalty would be immense. For one, they would share in the pain suffered by ordinary citizens, always a salutary experience. For another, if they had to pay their share of taxes on their luxurious toys, that would likely rein in their obscenely flamboyant lifestyles. Malaysia should not have to put up with such nonsense as when the Sultan of Kelantan drove off with his impounded luxury sports car without paying the necessary road tax.

Lastly, seeing families of leaders, royalty, and aristocrats being kicked off the dole would appease immensely the social sensibility and sense of justice of ordinary Malaysians. At the very least that would eliminate the current hypocrisy where many of these leaders would with nauseating frequency exhort the masses to be berdikari (self reliant) while they and their families are the first to hog the public trough. I am astounded at how many members of the immediate families of ministers are getting government scholarships, aids, subsidies, or otherwise dependent on public dole. They have no shame. If they cannot be independent on their ministerial income, then they have no right to lecture the masses on being berdikari. Continue reading “Enhancing Special Privileges”

By M. Bakri Musa

Chapter Six: Malaysia: Assets and Liabilities

The Barnacles of Special Privileges

Malaysia’s affirmative action programs can be viewed in one of two ways. One, they were designed to ameliorate the deteriorating socioeconomic status of Bumiputras; and two, they are part and parcel of the inherent rights of Bumiputras consequent to their being the indigenous people of the country. With the first, the primary objective is to enhance Bumiputras’ competitiveness so they could compete effectively not only with non-Bumiputras but also the rest of the world. The program’s effectiveness could thus be objectively evaluated by this ready criterion.

The second premise views these privileges as essentially being part of our heritage. It is a right. There is nothing to assess; the program would be permanent. Whether such privileges are boon or bane depends on how they are administered and on the recipients. Native American Indians have many privileges not afforded to ordinary Americans (sovereignty of their reservations, free education, tax free status, etc.), but they still remain far behind. They have become essentially wards of the state; their initiative and industry sucked dry out of them.
Continue reading “Malaysia in the Era of Globalization #50”

By M. Bakri Musa

Chapter Six: Malaysia: Assets and Liabilities

Malaysia’s Digital Divide

The digital divide (the lag in IT) is seen not only between Malaysia and the developed world but also within the nation itself: between Malays and non-Malays, rich and poor, and urban and rural. It is widening. This digital divide is also reflective of a more general technology gap.

For Malaysians to benefit from globalization, we must not only be comfortable with these new technologies, and specifically IT, but also be able to master and make full use of their potential.

Technologies directly impact productivity. A generation ago it took 16 farmers to feed 100 Americans; today only 2 or 3, thanks to superior technology. One man can now effectively farm hundreds of acres by using combines and tractors. Similarly, with efficient fertilizers, pesticides, and improved seeds, the yields have increased tremendously.
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By M. Bakri Musa

Chapter Six: Malaysia: Assets and Liabilities

The Far and Pervasive Reach of the Malaysian Government

In Malaysia, the government’s powerful reach is extensive and pervasive, affecting everything and everybody all the time. This was dramatically demonstrated to me recently. A bright Malay student on her own effort was accepted for graduate work at Cambridge University. She applied to a local university for funding under its academic training program, and was accepted. But to get that scholarship she had to be interviewed by the Public Service Department (PSD). Fair enough. Then she was told that because her TOEFL (a standardized English test) score was outdated she would not qualify, she would have to re-sit the test.

Here she was, accepted by Cambridge and deemed qualified by the dean of a local university, but the bureaucrat at PSD had veto power over her. Never mind that she had graduated from a top American university (which was why she was accepted to Cambridge in the first place) and had aced the TOEFL years ago, but those facts did not persuade the esteemed civil servant. Fortunately she was tenacious enough to fight such inanities; but it took the personal intervention of the deputy prime minister no less to resolve the issue in her favor. Why should the deputy prime minister have to decide a simple matter like this? Is he not busy enough?
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Malaysia in the Era of Globalization #47
Chapter Six: Malaysia: Assets and Liabilities
Big Government, Big Problems
by M. Bakri Musa

The remarkable achievement of the Reagan Revolution in America and Thatcher’s in Britain is the recognition, long overdue, that government is not always the solution. In many instances, it is the problem. The most spectacular example of the failure of big government is the Soviet Empire. It collapsed not because it was defeated in war (although the West would like to claim that it won the Cold War) but because the Soviet state had been too massive and highly intrusive. Given the momentum of globalization, the Soviet system would have imploded anyway.

The only other major totalitarian government today is China; it survived because its leaders were smart enough to recognize the desperate need for change, and did it quickly. The 1989 Tiananmen Square uprising was a rude awakening for those leaders. Today’s Chinese communists are a far cry from their dogmatic Mao comrades. This difference is best encapsulated by Deng Xiapeng’s celebrated slogan, “To get rich is glorious!”

Deng was decidedly more pragmatic. He quoted the Chinese proverb to the effect that it matters not what color is the cat as long as it catches the mice. The Chinese are now realizing that capitalist cats are more productive (can catch more mice!) than communist ones! Continue reading “Big Government, Big Problems”

By M. Bakri Musa

Chapter Six: Malaysia: Assets and Liabilities

Bless Our Geography!

Allah has been generous to Malaysia. Malaysians are reminded of this every time they read about natural disasters occurring elsewhere. There are no earthquakes, hurricanes, volcanic eruptions, or devastating floods. God has spared Malaysia such natural calamities.

Then there is the climate; it is not visited by extremes of heat or cold. Whereas Californians have to pay to warm their houses in winter and cool them in summer, Malaysians are spared such expenses. And if Malaysians were to design their homes well with cross drafts and adequate natural ventilation, air conditioning would not be essential. It is only for comfort. In temperate zones heating a home is essential lest you freeze. Home designs in temperate zones must necessarily be more complex to cope with both winter and summer. Unlike Malaysians, those living in temperate zones need two sets of clothing.
Continue reading “Malaysia in the Era of Globalization #46”

by Bakri Musa

(Malaysia in the Era of Globalization #45)

Our Plurality An Asset

Malaysians, especially the leaders, have always regarded their plural society as a liability. If only the nation were racially and culturally homogenous, these leaders would lament, many of our problems would be gone. Such wishful thinking! I argue the contrary. That is, Malaysia’s racial plurality, far from being a liability, is actually an asset. And a significant one at that!

Malaysian policies and strategies are constantly being looked at and analyzed in racial terms. Often the implicit assumption is that what is good for Malays must necessarily be bad for non-Malays, and the reverse, what is good for non-Malays is bad for Malays. This mentality is ingrained at all levels. As noted earlier, Malaysia’s racial plurality is another legacy of the British colonial rule.

The country’s multiracial society has indeed been a source of problems, both past and present. In part this Malaysian dilemma results from socioeconomic divisions paralleling racial lines. This is not a uniquely Malaysian problem. With the massive migrations and arbitrary drawings of political boundaries in the last century, many countries have ethnically and culturally diverse populations. Today’s headlines are filled with tragedies consequent to those diversities: the ethnic cleansing in the Balkans; the genocide of Rwanda; the continuing sectarian strife in Northern Ireland; and ethnic hostilities in Sri Lanka. Continue reading “Chapter Six: Malaysia: Assets and Liabilities”

By M. Bakri Musa

Chapter Six: Malaysia: Assets and Liabilities

Other Colonial Legacies

The other enduring British colonial legacy – a professional army – saw Malaysia through many a crisis, from the konfrontasi against Indonesia in the early 1960s and the 1969 race riot, to the constitutional crisis of the 1980s, and the recent unrest over the Anwar affair. Through it all the military remained neutral and loyal to its elected civilian commanders. Malaysia has not fallen into the trap visited upon many previously colonized countries where the army is part of the problem. In Indonesia, the military is the only viable institution; unfortunately it squandered that unique trust by actively meddling in civilian matters. What was once a noble and highly regarded institution is now no different from the nation’s other corrupt and ineffective institutions. Indonesia’s armed services are less the guardian of the nation but more a constant threat to its stability. Malaysia is fortunately spared such a fate.
Continue reading “Malaysia in the Era of Globalization #44”