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Sakmongkol ak 47

Thursday 30 July 2009

The Foundations of Wealth of a Nation.

We may remember, the government has used an extensive repertoire of catchphrases to prop up Malay dynamism. From the 1960's and 1970's- it was berdikari, jati diri, Malay par excellence, towering inferno Malay, Melayu Baru, and countless others. We have even used religion. Sometime ago it was Islam Maddani which was abandoned when the chief architect of that concept exited UMNO politics is 1998.

For a while Islam Hadhari was the craze. Both watered down faces of Islam were designed in part, to create the rugged Malay. These were aimed to inculcate strong individualism and ruggedness so essential, it is thought to empower the Malays. More importantly Malay leaders recognised and acknowledged these as essentially individualistic values.

We accept these are necessary qualities Malays must have. These qualities are also necessary to enable Malays to play a more active role in economics. While we accept these qualities as vital for the development of the rugged Malay, the Maddani or the Hadhari Malay,the 2020 Malay and now the One Malaysia Malay, we appear to have missed a crucial point. These qualities are associated with a particular nurturing political environment. That environment calls for limited government interference in the affairs of the Malay. As F.A. Hayek pointed out, these individualistic qualities can only be achieved under a liberal order in which government activity is limited to providing the basic framework within which each individual is allowed to purse his own interest. In other words, it is the Malay Adam Smith we are looking for and not a Malay commissar.

Malay politics especially the one that is pursued by UMNO is counterproductive when it comes to nurturing the rugged Malay. Its central weapon has always been the use of governmental/political power to prevail over others. Governmental power is essentially coercive by nature. It uses a slew of legal instruments, legislation and raw political power. It stands for the enlargement of government programs. As it does all these, government saps the one essential quality which they sought out to do- the creation of the rugged individualistic Malay. Instead it spawns generations of dependent Malay paranoid over losing political power.

Two things stand in the way of Malay progress:-

  1. The Malay elite's intoxication with power masked behind the facade of benevolent and paternalistic despotism.
  2. The reality that the elite are actually fearful of the rise of the rugged Malay. Hence the incessant and tireless invocation of the good old days. The glorious feudal past or in modern times to the golden 22 years.

Our solution then, is always to find ways to justify enlarged government involvement and intervention. There is a possibility that we have been wrong in our approach. Perhaps the better approach is to cultivate the voluntary cooperation between individuals allowing each to pursue his or her own economic interest.

Up to the 1960's, we argued against the evils of capitalism. We believed all the social ills were the result of unbridled capitalism. The greedy capitalists who control the means of production were turning the people into impoverished and exploited masses. Capitalism never seemed to die. People continue to be rich as they also became poor. The poor were that way because of capitalist greed. Capitalism is evil.

The ideological weapon to stop the evil of capitalism was found in communism, socialism and their variants in one form or another. In economics, these political beliefs were translated in the form of enlarged government involvement in economics. They took the form of central planning- the commissar, the government bureaucrats planning and determining what is best and beneficial for the people. Government intervention in economic affairs was regarded as necessary to stem the greed and rapaciousness which are associated with greedy businessmen and individuals.

When communism became no longer appealing, objections to capitalism took novel forms. For example damage to the environment stirred up ecological consciousness. Damage to our environment is caused by the greed of evil capitalists, correctable only through enlarged government intervention. The shortages of foodstuffs and essential items must be the result of capitalist speculations and can only be corrected again, by determined government intervention. Although communism or its variants that provided opposition to capitalism are no longer around, the same collectivist tendencies exist in the form of determined government intervention.

In Malaysia, the greedy and rapaciousness of businessmen and people was represented by the Chinese businessmen and capitalists. Government intervention was regarded as necessary to provide the counter balance to the expansion of Chinese economic power.

Politics and government were dominated and controlled by the Malays. The division of power therefore was neatly demarcated along the division between politics and economics. Allow Malays to dominate politics and let the Chinese control the economy.

This rough division of powers as it were, led to differing outcomes. Focussing on politics resulted in Malays lagging behind in economics. The truth emerged that actually, economics is the more important element in statehood. A poor country breeds instability and dissatisfaction. If government is but the external expression of political power, economics is the substance. Malays soon realised that without the substance, the form crumbles and is weakened from within.

The Malay answer to counter economic sluggishness is through determined and aggressive government intervention. More government intervention created more dependence and prevented the rise and emergence of rugged Malay individualism so essential for economic prosperity. As Malays rely more on political solutions to correct their economics, such reliance reduces the schooling of Malays in the art of pursuing their own economic interests, a central tenet of Adam Smith's foundations for the wealth of a nation.


Anonymous,  30 July 2009 at 21:27  

The tendency is always to equate success to wealth>>even the GLCs KPIs are more focussed on financial indicators..

And the problem with the benchmark of "instant wealth" is real,organic sustainable growth is often sacrificed.

The Chinese accumulated experience,networks,education and customers thru the ages...piece by piece.And they reach a critical mass that makes them more immune to cyclical downturns.In any event..with the solid foundations..recovery is easier.

The assets and subsequent wealth is the result of the success of the work ethics.

Bumis need to develop in the same manner..cos instant wealth corrupts the desire to actually run a business (with all the inherent risk n hard work.)

We are pretty hollow at the mid level supply chain for EVERY industry...

Navi 31 July 2009 at 11:32  

I am sure you would have read what Tan Sri Robert Kuok has to say in 'de minimis'. What is said is very relevant to be instilled in the minds of all businessmen irrespective of race and creed. What has destroyed a lot of potentials amongst the Malay business community was greed and the perceived need to cheat to succeed in business. My opinion only and on observation of some close family and friends who have self destructed.

ajoyly 1 August 2009 at 11:40  

Agree with Dato' that education play an important role in preparing an individual to earn a living whether on his own or working for others. Therefore it is important that he recieved as much lesson on the information that would help him in this regard. In other words, to ready him for the working world.

Subjects taught should be related to this objective. And if in the end he should decide to start his own enterprise, the information he has obtained through education including online via computer would become handy and useful. It will become the basis of guiding him in running his business.

However the ultimate insurance for success is his own person. Not all that he has learnt. Because it is determination and hard work which will become the factor that will make the business rise or fall. Therefore having the spirit of wanting to achieve the goal set, whatever the challenges or obstacles, will be a very important asset to the individual concerned.

After-all, education is only a means. A bridge if you will, to help a person achieve his ambition in life. As mentioned above, success in any venture is a matter of sweat and toil. A working experience. And therefore, it is important for a Bumiputra to go through a similar process. Not to rely on a handout or government project.

By undergoing this exercise, he will have created a resilient spirit within himself, giving him the ability to overcome failures and to rise again until finally achieving success.

Every race whether Chinese, Indian or Bumiputra can be successful. Education can help but the most crucial components are determination and an atitude or spirit of not being afraid of hardwork and failures.

These are the tools of success which had been proven effective since time immemorial.

Government should rethink its policy on creating a rugged Bumiputra society which can stand on its own economically by applying the above-mentioned techniques.

Instead of helping just a few selected ones, this can be applied to all Bumiputras by inculcating in them the right atitude and spirit as mentioned above.

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