Economic Corridors and our Fatal Conceit.

The luster of the economic corridors is fading as the hard evidence about their success is very sparse. The Singaporeans are not coming in droves into Iskandar region. In the other corridors, the economy hasn't taken off beyond the pyrotechnics and dry ice smokes.

In Pahang for example, there was much spectacle about planting 8000 acres with a new species of pineapples. Also in the show, was the rearing of Boer and Jamnapari goats. These two ventures could easily be handled by the state's own agencies. We don't need ECER to tell us that. The goats too were brought in from goat farms so that the PM, the MBs of Pahang and Kelantan can enjoy stroking the kids.

Other than that, what is the public's perception of ECER? It's just another extraneous institution coming into existence to supersede and duplicate what can be done by the state. They have money all right, which will in due time degenerate into avenues for streaming money into a few selected beneficiaries. The ECER for example is headed by PETRONAS people. They may be ok in oil and gas industry, but that ok is not transferable into general business ventures such as rearing goats and planting pineapples.

There are now doubts as to whether the economic drive assumed to be inherent in the creation of the various corridors is there or not. The problem is, the boys advising on the economy think, everything can be micromanaged. In some ways I blamed our senior civil servants for not arguing the case against setting up these behemoths with more substantive reasoning and even probably pointing out to the unsoundness of such projects. Now almost 70% of the country is enveloped by these corridors thereby making the various economic development agencies in each state, seem superfluous.

If what I hear about MOF officers spending time yik-yaking eating potato chips while serious meetings about the economy are in session is true, then no wonder the text-book young guns occupying the 4^th Floor can bulldoze through with their plans.

But I want to talk about the philosophical underpinnings of such esoteric ideas as these economic corridors. To me they are essentially extensions of the mind of central planner. Someone out there think they can micromanage our economic lives.

Last week I wrote several articles about the parallel economy and the lessons we can learn from it. The parallel economy is a live lab for studying the principles behind economic vibrancy to distinguish them from the formal economy so loved by our central economic planners. You have people still wetting their underpants impressed you with some economic models that they think are answers to break beyond the thresholds.

Look at the driving principles behind the parallel economy and our own formal economy. I am not asking you to look at the declaration that the parallel economy is the answer to the BN's NEP or something along those lines. That's a stupid way of engaging in a fruitful discourse. What's more meaningful is to realize that the vibrancy in the parallel economy is the result of relative de-regulation and economic freedom. The less vibrancy in the formal economy is probably the result of excessive government intervention and meddling by officious napoleons.

People are still besotted with the idea of centralization and concentration of power. They think they can substitute the spontaneous order of human economic cooperation with a detailed input output tables and plan every single minutiae of economic urges. The facts are they can't. We don't have to produce those elegant rebuttals against the attractions of centralized economic planning. It is sufficient for our practical purposes to see the principles behind the parallel economy.

The underlying principle driving the parallel economy is this:

The great advances of civilization, in the industry or agriculture, have never come from centralized government. Columbus did not set out to seek a new route to China is response to a majority directive of a parliament, though he was [partly financed by an absolute monarch. Newton and Leibnitz, Einstein and Bohr, Shakespeare, Milton and Pasternak….; no one of these opened new frontiers in human knowledge and understanding, in literature, in technical possibilities, or in the relief of human misery in response to governmental directives. Their achievements were the product of individual genius, of strongly held minority views, of a social climate permitting variety and diversity.( Friedman in Capitalism and Freedom]

I doubt whether those people behind Saville, Wisma Shun Li, Pearl Point and Elken Convention centre did what they did in response to directives from government officers. Harun Johari or Ikmal or whoever could have accomplished more if a social climate permitting variety and diversity is provided.