UMNO’s Middle Income Trap

UMNO's middle income trap.

Since Sunday, I have been writing issues relating to UMNO. These are in anticipation of the Pahang UMNO convention this weekend. My objective is to have as many UMNO people read and ponder the issues before they participate in the convention. Let's have a serious convention. The convention is not a jamboree where you get to sing scout songs.

Let's talk now of UMNO's middle income trap. As you know, a middle income trap occurs when a middle income country finds it cannot compete technologically with an advanced country nor can it compete in terms of low cost with a low income country.

UMNO finds itself in such a situation, albeit a political one. It can't compete with the technical superiority of its political adversaries while at the same time; it can't compete in winning adherents to its cause among the common folks. UMNO's currency is its people. The quality and productivity of its members. Its exports are its ideas, cause, vision articulated.

The quality and productivity of its members is suspect. Its losing ground competing to offer a coherent vision for the future, arrest the fears of the Malay heartland. It appears unable to secure the confidence of the younger and intelligent set. It cannot also compete to secure the allegiance of the poorer sections of the population who gravitate towards religious solutions and therefore to parties offering religious agenda.

When I was covering the Bukit Gantang by elections the last time, I took note of two things. The Pakatan Rakyat people, especially the PKR and DAP were tech savvy. They had notebooks around, computer gadgets and other machines of one type or another. They sent sms, e mails and what not, of which we UMNO people were not aware of. En route to a kampong, I saw Anwar Ibrahim on a screen speaking live from somewhere else but his image was projected there. A few kilometers away, some old men clad in sarongs were putting up banners and posters.

Were there lessons to be learnt? What does familiarity with the latest technology reflect? It reflects modernity, advancement and possibly rich. What do sarongs indicate? If I were to use Ungku Aziz's sarong index theory, they would indicate poverty, backwardness, less advancement.

Where does UMNO stand? It slowness and lethargy over embracing technology suggests that it hasn't arrived at a stage of modernity, advancement or rich. Only the top Bumiputeras are rich- the puteras more than the bumis. But more importantly to me, it exposes the vulnerability of UMNO in that important department- it is failing to attract higher quality people to its cause. Good and intelligent people are not coming your way to dedicate themselves to your cause. Instead they gravitate to the other side or chose to stay out.

So what happens in the end? You end up having a strong body, but weak head. You become a sports jock, good at physical and rough sports but lose out in the battle of the minds, in activities that demand the nimbleness of the mind.

The scarcity of its people clad in sarongs would suggest that it's not poor either. So, UMNO despite having 3.5 million members is neither a modern/advanced nor a poor and backward party either. It's neither here nor there.

So what happens in the end? You don't have strong legs to carry you over the distance. You lose out on stamina.

This is double jeopardy for UMNO. It has failed to address the issue of quality of people at the top, i.e. at leadership levels and it has also failed to address issues at the bottom.

UMNO is actually caught in its own middle income trap. Middle Income trap illustration: - blueprints flow from California to China, while manufacturing goods flow in the opposite direction, leaving middle-income countries in limbo: they are not technology-savvy enough to compete with rich countries and are not cheap enough to compete with China.

UMNO's middle income trap: UMNO is not technologically proficient enough to compete with the technological keenness and the zealotry of PR party workers and not poor and humble enough to attract the PAS type crowds. Usage of blogs, tweeter, facebooks is not extensive as we would like to think. UMNO couldn't hold their own trying to convince the PAS types- those wearing skullcaps and folksy clothes more interested to asking you to pray alongside them. UMNO people are either shy/scared to make walkabouts at Pasar Malams.

UMNO can't compete at the high end technology with its adversaries. Opposition parties are using the new media to the hilt. They aim at one particular group- the intelligentsia. It is sufficient for ideas to form within an enclave of inquisitorial and potent minds. Small groups serve as catalysts to spread ideas, thinking, mood and perception.

Look around you. Does UMNO have its equivalent answer to Malaysia Today? Does it have an answer to Malaysian Insider and other Online Media Communicators that appeal to the inquisitive and critical crowd? It thinks it can neutralize the small but powerful groups by trying to appeal to the raw senses of the people outside the reaches of the new media. The ordinary people who are more likely to respond to stories about perceived threats, about threats to their religion, special position and all that. Aiya- clever Malays are not going to fall for those same tricks.

But UMNO is also losing at the low end technology- ceramahs, public speaking, mass gatherings. Why do you think, that UMNO the Goliath of Malay politics is stopping that low to embrace Perkasa? It doesn't hide its shamelessness by cavorting with a group whose very ideas and reason for existing stand in stark contrast with the vision of PM Najib.

This is the clearest example of UMNO losing its plot on how to galvanize Malay adherence. You can't compete at the high end and you are also losing at the lower end. You can't yet become a high incomer but not poor enough to become a low incomer.

This is of course an oversimplification. It doesn't mean that UMNO being trapped as a middle incomer, isn't attractive to rich incomer or less incomer. As the political market becomes fluid, party workers from the technologically advanced party can migrate to the other side. We have seen that happening already- the low calibers from the technologically advanced party are crossing over to UMNO.

Will UMNO gain? Difficult to say because the recent migrants are low enders- 2 of the Perak migrants still have some charges hanging over their heads while the DAP deserter has her shortcomings. As for Zahrain, no one is impressed with some personal endorsements of his character. UMNO will lose because accepting these people augments the low quality talent pool that's already dominating UMNO. This will lead to dominance by type B politicians.

It's like some sort of political second-order general equilibrium effects. You do get some spillover effects from the fluidity of the market, but the impacts of the spillovers are not certain. Boon or bane?