Category: globalisation

Malaysia in the Era of Globalization #43

by Bakri Musa

Part II: Transforming Malaysia

The instinct to censor is a powerful one. It is also an acknowledgment of the unpredictable power of words. Goenawan Mohamad, Indonesian editor and journalist.

Chapter Six: Malaysia: Assets and Liabilities

To prepare for globalization Malaysia must first take stock of herself. She must assess her positive as well as negative attributes; and enhance her assets and lessen her liabilities. She must also be mindful that with ingenuity, liabilities can be turned into assets while assets not improved upon or left to deteriorate can become liabilities.

Malaysia is vulnerable on a number of fronts, with many simmering problems yet to be addressed or even acknowledged. Malaysian leaders must critically reexamine their policies and revisit their assumptions. They must not hesitate to jettison ineffective policies, modify inadequate ones, and expand on effective strategies.

In this chapter I will review some of Malaysia’s attributes, both positive and negative. Continue reading “Malaysia: Assets and Liabilities (Malaysia in the Era of Globalization #43)”

By M. Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

Maximizing the Benefits and Minimizing the Downside of Globalization

Understanding the consequences of and the forces driving globalization would help us maximize its benefits and minimize the risks. Globalization has its own dynamics, and like the mighty Mississippi, there is no point in trying to stop it and getting swamped in the process. Malaysians would be better off trying to channel and tame the beast to benefit them. Levees along the Mississippi created vast expanses of rich fertile farms while at the same time controlling the floods. Channels and locks converted the river into an efficient and vital transportation artery. Likewise, damming provided cheap hydroelectric power as well as vast recreational lakes.

Thus instead of bemoaning the erratic cycles and the seemingly overwhelming power of globalization, Malaysia would be better off preparing her citizens to meet this new challenge and making it benefit the nation. Malaysians should concentrate on building the equivalent of channels, levees, and dams to tame and exploit globalization so it could benefit Malaysians by taking advantage of this massive global flow.
Continue reading “Malaysia in the Era of Globalization #42”

By M. Bakri Musa

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.
Continue reading “Malaysia in the Era of Globalization #41”

By M. Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)
Correlates of the IT Revolution

What marvels me is that this IT revolution has not even reached its maximal potential. Each day promises even more dramatic improvements and new achievements. Today’s personal computer is a quantum leap in performance over those of only a few years ago. Bill Gates is planning to encircle the globe with low orbiting satellites to enable any one anywhere to get Internet connectivity. While such a development may not seem impressive to someone in America who already has convenient Internet access, imagine what it would do for areas like East Malaysia and Africa. They would leapfrog into the IT age overnight. There would need to wait for the local government or telephone company to lay phone lines and cables.

With ease of communication, ideas and information would spread easily. News is no longer controlled by any one authority. Whereas in the past citizens had to rely on one government-controlled source (as in Malaysia) or a few commercial outlets controlled by powerful groups (as in America), today we have literally limitless sources of news and information on the Internet. Malaysia’s independent web daily Malaysiakini.com is now more popular than the established media. During the Afghanistan bombing in the war against terrorists following the 9-11 attacks, with the mainstream American media not doing any frontline reporting, readers could still follow the news by tuning into the Arab television channel Al Jazeera (available on cable and the Internet).
Continue reading “Malaysia in the Era of Globalization #40”

by Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

The Corollary to Globalization

A corollary to globalization is the development of a common acceptable standard, or to use the language of computers, a common platform, or at least a compatible operating system. In the computer industry, a common platform enables my computer to link and communicate with thousands of other computers. One of the common platforms of globalization is language. There is a need for a common language to facilitate communication. By default English is now assuming that role. This is not a dictate from Britain or America but simply the result of an evolving pattern.

Another imperative would be a common currency. At present there is no single currency that has successfully assumed the role of a global currency. In pre-Breton Wood days when the dollar was tied to gold, it could probably be acceptable as a world currency. And indeed it was. Currently the dollar is like any other currency, backed only by the confidence consumers and investors have on the underlying American economy. When that confidence is high, the value of the American dollar shoots up; when America runs chronic deficits and its financial house in disarray, the dollar plummets. It has ranged from over 300 yen to under 80, all within a few decades.

It is more likely that eventually the world would settle into a few major currencies, with the others tied to one of them. Western Europe has dispensed with its multitude of currencies into the euro. The dollar is fast becoming the currency of choice in the Western hemisphere. Continue reading “The Corollary to Globalization”

By M. Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

The Forces Driving Globalization

Much as the Industrial Revolution of the 18th Century was driven by machines, so too is today’s globalization propelled by technology, in particular Information Technology (IT), and knowledge. The Industrial Revolution began with the invention of steam engines that were used primarily to pump water out of mines. Later they were adapted for other uses, from weaving machines to steamships and locomotives.

The mechanized weaving mills revolutionized the textile industry; locomotives and steamships, transportation. Machines could produce goods not only in mass quantities but also of consistent and reliable quality. And those goods could now be transported to vast distant markets, thanks to cheap mechanized transportation modes. The locomotive was also instrumental in opening up the vast American continent and propelling America into a major economic power.
Continue reading “Malaysia in the Era of Globalization #38”

By M. Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

Trading in Money

Malaysia cannot modernize its financial sector and capital markets in part because its leaders are stuck in the pre-globalization mindset, especially in their attitude towards money and capital. While to consumers everywhere money is now simply a convenient medium of commercial transaction, to Mahathir and other Third World nationalists it assumes a more important symbolic function. Currency represents the nation’s sovereignty. It is instructive that one of the first orders of business for many newly independent nations is to declare a new currency or to rename its old one. Malaysia has the ringgit, and to symbolize its new beginning, prints a portrait of its king on the paper notes. Money is no longer simply money, rather a powerful symbol of the nation’s sovereignty.

It is this symbolic attachment to the currency that irrationally dictates many economic policies. Governments often go to extreme lengths to defend the value of their currency when market conditions dictate otherwise, as happened in Thailand and Malaysia during the 1997 crisis. They forget that the value of a currency is a reflection of consumers’ and investors’ confidence in the underlying economy. A weak economy will have a weak currency, regardless of the nationalistic frenzy used to whip support for it. Malaysia lost billions and nearly exhausted its foreign exchange reserves in the early part of the 1997 economic crisis trying to defend the value of the ringgit, only to admit finally that the market was correct.
Continue reading “Malaysia in the Era of Globalization #37”

By M. Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

Missing the Japanese Lesson

In truth many misread the Japanese success story. As Harvard’s Michael Porter observes in his book, The Competitive Advantage of Nations, the successful Japanese companies that now dominate global markets – the Sonys, Olympus, and Toyotas – had survived rigorous competition at home. They competed aggressively among themselves and only the most vigorous, those who have mastered the art of satisfying their customers and reducing the costs, go on to conquer the world. Meanwhile their “protected” industries – their banks and other financial institutions – are wallowing in misery, unable to compete beyond their shores.

As a result of its commitment to foreign trade, Malaysia enjoyed a boom in direct foreign investments in the 1980s and 90s. These later investors were chiefly in manufacturing, especially semiconductors. They were welcomed because, quite apart from the employment opportunities provided and foreign exchange earned, they spread the “Made in Malaysia” brand names worldwide. Malaysians also discovered that being a factory worker, even a foreign-owned one, was much more agreeable to working the land under the blistering sun. Indeed those foreign employers, yes even those companies owned by our former colonizers, were much more enlightened and generous with their benefits than native ones!
Continue reading “Malaysia in the Era of Globalization #36”

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.
Continue reading “Malaysia in the Era of Globalization #35”

By M. Bakri Musa

Chapter 5: Understanding Globalization

Leveling Effects of Globalization

What critics in the West fear most about globalization is its leveling effect. It means that an uneducated American will fare as badly as an illiterate Indonesian, but at the same time, a skillful Indian programmer can compete equally with his American counterpart. The much coddled and highly unionized American workers panic when they discover that Mexicans earning a fraction of the wages can do the same work just as efficiently and skillfully. Consequently many major American manufacturers are moving their plants to Mexico. It is this aspect of globalization that is most feared by America’s Pat Buchanans and Ralph Naders.

Manufacturing jobs are not the only ones heading south. Typists in India do the transcriptions for many American hospitals. My medical dictation at the local hospital is digitized, encrypted, and then transmitted via Internet to India, where it is downloaded and transcribed, and then re-transmitted back to America, ready for my patients’ charts by the next morning. Many of these typists are Indian doctors who found that they could earn more as medical transcriptionists working for American companies than as practicing physicians paid by the Indian government. Looked at differently, American capitalists value these Indian physicians for their typing skills while the Indian government does not value their healing skills.
Continue reading “Malaysia in the Era of Globalization #34”

Chapter 5: Understanding Globalization

Earlier Forms Of Globalization

Globalization is not a new concept. There have been other globalizing trends in the past. Imperialism was one form, based essentially on the “White Man’s burden” to enlighten the dark world. The ensuing economic bounty to the colonizers is not to be dismissed. The world of the 19th and 20th Centuries was carved according to imperial dictates.

The legacy of colonialism is such that today Malays in Malaysia, having been under British rule, know more about Britain than about their kindred across the strait in Sumatra. Malays in Sumatra in turn, being under the Dutch, know more about Amsterdam than Kuala Lumpur even though imperial forces have long left the region. Colonialism was able to break longstanding cultural and ethnic ties. Another ready example is Hong Kong where its residents, though ethnically and culturally Chinese, feel more at home in Britain than Mainland China. Quite apart from their choices of names, there is a gulf separating Hong Kong’s Christina Chin with her affected British accent from Beijing’s Jeng Zoumin. They each view the world very differently; one ignores such differences at one’s own peril.

The difference between today’s globalization and the colonialism of yore is that with the latter, there was no choice. Colonialism was imposed; the colonized had no say on the matter. It was premised on the supremacy of the colonialists over the natives, or more crudely, the White man over the colored. Colonialism’s globalizing trends were restricted to within territories controlled by that particular power. There was freedom of trade and movement of people only within the colonial empire but not beyond. British colonies were integrated only with Britain.

Like colonialism, today’s globalization is also broad and transcends race and geography. But unlike colonization where there was no choice on the part of the colonized, in today’s globalized world no nation is forced to join in. It is completely voluntary. Continue reading “Malaysia in the Era of Globalization #33”

By M. Bakri Musa

Chapter 5: Understanding Globalization

There is no doubt that globalization is an idea whose time has come….[But] the fact that [it] has come…does not mean we should sit by and watch as the predators destroy us.
—Mahathir bin Mohamad, Prime Minister of Malaysia

The one dominant force shaping the world today is globalization. That is, the increasing integration of markets, economies, infrastructures, and other institutions into one world standard. As a consequence, there is increasingly free movement of goods, capital, services, and ideas across borders.

Globalization, observes the World Bank, is not just an economic phenomenon. While the accounting of benefits and costs of globalization depends very much on one’s perspective, there is no question that it is a relentless and inevitable tidal wave. And like any tidal wave, one is more likely to survive and even thrive, if prepared. A non-swimmer will be swept away and drowned, but a skillful surfer will exhilaratingly ride the crest.
Continue reading “Malaysia in the Era of Globalization #32”

By M. Bakri Musa

Chapter 4: Modern Model States

The Relevant Lessons For Malaysia (Cont’d)

Moving on to South Korea, it is an example of what sheer determination, discipline, and an obsession with learning and education could do for a nation. When General Park took over, he whipped the nation into strict discipline and regimentation, with a single-minded purpose of economic growth and competitiveness. Being an ethnically and culturally homogeneous society, Park was able to ramrod through many changes without giving rise to sectarian dissatisfaction. In Malaysia, with its racial diversity, any political or social initiative inevitably would be analyzed into which race would benefit more and which group would lose. This invariably leads to the politics of envy and resentment. No such problems arose in South Korea.

As Korean society changed however, Park remained the same. Pursuing the army analogy, even though his initial recruits were now disciplined and accomplished officers, Park still treated them as if they were still a bunch of raw recruits. The Koreans expected greater political and personal freedom commensurate with their economic gains, but the military-backed Park and his successors still persisted with their authoritarian mindset.
Continue reading “Malaysia in the Era of Globalization #31”

By M. Bakri Musa

Chapter 4: Modern Model States

The Relevant Lessons For Malaysia (Cont’d)

A few years ago I was a guest teacher for the senior class in the school near my village in Malaysia where I once taught briefly as a temporary teacher. What an experience! I was taken aback at how passive and quiet the class was. There was no spunk or energy. In an attempt to stimulate some discussions I uttered some really silly and outrageous remarks just to get a reaction. Alas, none was forthcoming.

These students had such reverence for their teachers that they did not dare question me. More startling, when one brave soul attempted to challenge my statement, the others quickly put her down, saying in effect that questioning what I said was tantamount to being disrespectful, and thus sinful. It is this psychological effect imparted by the religious teachers that is so devastating.
Continue reading “Malaysia in the Era of Globalization #30”

By M. Bakri Musa

Chapter 4: Modern Model States

The Relevant Lessons For Malaysia

At first glance, Malaysians cannot readily identify with any of these three countries. Although they differ in a number of significant ways, nonetheless each has important lessons to offer Malaysia.

The most obvious difference is that none of three countries have multiracial societies and the accompanying interracial problems. South Korea is ethnically and culturally homogeneous. There may be some tension between the Buddhist majority and the Christian minority, but that does not lead to serious social or religious conflict. Polarizations and schisms in Korean society are more along regional and class lines.

Argentina is also deeply divided along class lines; between landowners and workers, and urban and rural dwellers. Ethnic differences are not significant as they are all essentially Europeans. Granted there are significant differences between the Germans and the Italians Argentineans (language, culture, religion), but those are of not of the same scale as the differences between Malays and Chinese.
Continue reading “Malaysia in the Era of Globalization #29”

By M. Bakri Musa

Chapter 4: Modern Model States

Don’t Cry For Argentina (Cont’d)

Argentineans today must be wondering where they had gone wrong. How could they mess up such a wonderful country? With such promising attributes and rich resources, it would take a real effort to screw things up. The Argentineans did not accidentally stumble their way down; they must have deliberately taken that path of self-destruction.

I deliberately choose this Latin American country as a negative example, of how not to proceed; or how to mess things up royally. To see how far Argentina had fallen, a cursory review o f its history would suffice.

In the early 20th century Argentina enjoyed a standard of living much higher than that of Western Europe. Capital and labor poured in to tap the country’s wealth. United States too had a massive influx of European immigrants at that time. Unlike America however, Argentina did not have a dominant culture into which the immigrants wished to assimilate. Thus the Italians in Argentina pretty well maintained their own culture and value system, as did the Spaniards and other Europeans.
Continue reading “Malaysia in the Era of Globalization #28”

By M. Bakri Musa

Chapter 4: Modern Model States

Don’t Cry For Argentina

Argentina, like the rest of Latin America, conjures a certain indelible image. The phrase Banana Republic is both evocative and descriptive: a country dependent on a single commodity. It is banana for Honduras, sugar for Cuba, tin for Bolivia, and meat for Argentina. It also refers to military dictators in their crisp uniforms seizing power every now and then. Indeed such khaki attires are now chic, a trademark of the Banana Republic brand. Alas, these caricatures are all close to the truth.

There have been many ready explanations for Latin America’s social and political instabilities. These range from cultural, racial, religious, and even geographical. The famous Latin temper seems a reasonable enough explanation. Then there is the entrenched role of the Catholic Church. The cultural explanation, once favored, is now being resurrected. After all it was the “laid back” Southern Europeans rather than the presumably more “cultured” Anglo Saxons who colonized Latin America.
Continue reading “Malaysia in the Era of Globalization #27”

By M. Bakri Musa

Chapter 4: Modern Model States

The Celtic Tiger (Cont’d)

Liberalization went beyond the economic sphere. It was Lemass’s political genius to use old-style nationalism, an inherent part of the Irish character, to forge progressive changes. A considerable part of that change involved a marked curtailment in the role of the Church both in the affairs of the state and in the lives of individuals. Thus birth control and sale of oral contraceptives were legalized in1979, despite severe opposition from the Church.

With the widespread use of birth control and the increasing participation of women in the workforce, Ireland’s former dizzyingly high birthrate declined substantially. The large unruly brood of yore is now replaced by one considerably smaller, but much better clothed, housed, and educated.
Continue reading “Malaysia in the Era of Globalization #26”