Boycotting nonsense

The new Minister of Domestic Trade and Consumer Affairs has made a major misstep when he merely said that the federal government did not approve of the boycott of Chinese goods and services but proceeded to defend the right to boycott.

Sometimes you can be legally correct but wrong on the economics.

Usually it is not a big deal because everyone knows that political motivations are usually irrational exuberance.

But...when you are a Minister responsible for an economic portfolio as important as Domestic Trade and Consumer Affairs you have to be a big picture person. 

You are running the entire Malaysian economy.

You cannot be pandering to petty politicking even if it is just a fortnight since your party won by a whisker. 

You have to check that tribal, petty, parochialism.

You are the Minister in the Malaysian Cabinet with a portfolio to manage Domestic Trade and Consumer Affairs.

Malaysia holds itself out as an open economy. Malaysia measures itself by trade competitiveness. Malaysia aspires to obtain foreign direct investments.

For instance, how would the Minister reconcile his defence of racial boycotting to investors and businesses from mainland China or Taiwan? 

Would he say via an interpreter, "Sorry, this boycott of Chinese goods and services apply only to Malaysian citizens of Chinese ethnicity and descent. It definitely does not apply to you people because you are from mainland China/Taiwan".

How lame is that?

Do I need to remind everyone that Cabinet Ministers hold a federal portfolio? 

Do I also need to remind everyone that people cannot be fooled all the time?

You cannot have the Prime Minister himself, Husni, Mustapha, Idris Jala and Wahid running around telling all and sundry that the Economic Transformation Plan is still on foot when your fella in charge of Domestic Trade and Consumer Affairs cannot send the correct signals out as a Federal Minister and, he is still labouring under the misapprehension that the stupid General Elections is still on.

As I said before, GET TO WORK!

Facing the human capital challenge

This is Part 2 of the interview that RB Bhattacharjee conducted with the Universiti Malaya Professor Rajah Rasiah as reported in the Edge Daily:

In part 1 yesterday on Malaysia’s economic direction and the constraints that are holding it back, Universiti Malaya Professor of Technology and Innovation Policy Rajah Rasiah talked of the strategic initiatives needed to raise its economic prospects. In the second and final part, he tells R B Bhattacharjee about fixing the public delivery system and how Malaysia can draw on its diaspora for help


TEFD: What are the priority reforms needed to make the public delivery system a selling point for the country?
Rasiah: The best is probably in Penang. For some reason, there is much more involvement. But even there, things have flattened. During Tun Dr Lim Chong Eu’s time as chief minister, at least during the tail end of his career, they had evolved a system where it was the Penang Development Corporation’s (PDC) responsibility to keep firms happy.

Penang was one of the success stories, because in 1970 the incidence of poverty was something like 50% and it went down to 0.3% or thereabouts by 2005. How was that possible? The state recognised that it may not enjoy much support from the federal government, because it is dominated by the Chinese, even though the ruling party was with Barisan Nasional.

They often did things that included providing the requisite service that is necessary to see that firms continued to upgrade or involve firms in the network, promote linkages so that greater progression of synergies.

Some of their methods come from Singapore and Ireland. They knock on doors to identify species of firms. At one time they realised that consumer electronics is too labour intensive, then they mistakenly went to disk drives, then they realised that too was labour-intensive, then they scaled down.

Later, they went to different species of industries, knocking doors and requesting them to relocate.

Penang was among the first to face the problem of a lack of skills. The Penang Skills Development Centre evolved in response to that. PDC was the facilitator. The old PDC building was rented out at RM1 a year as their contribution. The firms came in because they knew the group of stakeholders there were interested in helping each other. Firms put in the equipment and a whole range of other things.

While providing this state-of-the-art training, it also made sure that Penangites were being trained. Some of the training went to people who were not working in those firms.

That sort of initiatives also led to linkages. PDC tried to match multinationals with local firms, and facilitated the birth of local firms from employees of multinationals. That is well recorded.

But that did not evolve into the scale of upgrading necessary to match Taiwan, Korea and Singapore because of a number of institutions governed by the federal government.

The rules of the game were established by the federal government. Say, whether Penang can have enough professionals from abroad in a particular area. That’s a decision the federal government has to make.

Rasiah uses Penang to illustrate the example of a successful public delivery system.

Whether the government will provide the requisite educational infrastructure to create the human capital they require, those instruments are governed by the federal government, and whether the federal government would put up these labs.

I have brokered this myself, with the federal government’s backing. I assisted Khazanah on it. The Indian Institute of Technology Kanpur had a MoU with Universiti Sains Malaysia, for the federal government. The idea was to undertake research, using Masters and PhD students who were some of the supervisors from there. For the moment, they are targeting what firms want, which is the research focus.

We need to get into things the firms may not want, namely some elements of those technologies that will go to the poor. That means they won’t make money, so the government will have to buy the research products and pass the benefits to the poor.

Or you can have situations where firms have not recognised the potential in their sector. There you need incubators.

At one level, you serve the firms, and at another, you provide technology for incubators. At another level, you produce the graduates that firms and others can hire.

We should give green cards to these guys. Target the whole world for employees. At the same time, take in local participants. You need this networking between the best around for them to capture the best practices, and for the improvements to stick.

I also recommended a leading Taiwanese university for that. But the reason why the university is not in the equation now is because of some political considerations then.

Can Malaysia wean itself from its dependency on cheap foreign labour without going into economic shock?
We have broad statistics to show that in a number of industries we are relying on foreign labour. There have been attempts many a time to stop taking new foreign workers, but we have not thrown back those who are already here.

From time to time, there have been raids to check that the foreign workers have not been here for more than five years.

I don’t think the government should take any steps that contravene the joint governmental agreements with Bangladesh and Indonesia to repatriate the workers. Nor with the Filipinos, who even have minimum wage legislation that requires that maids here are paid probably a premium compared to the rest.

What they should do is through policy governance, by introducing levies that make it more expensive to hire foreign workers. Not immediately, because then the immediate retracting factor could be deleterious to the country, but gradually, they should defer recruitment. This would be like in Taiwan, where they imposed a levy if you take in unskilled labour.

You have to start somewhere, but you should not do it abruptly. If you do that, you are actually going back on your word. Firms should be given the assurance that you will stick to the word you gave earlier, otherwise they will lose confidence in whatever you do.

What is the positive news about Malaysia’s economic situation?
The minister mentioned that in the first quarter they had more than RM5 billion already. If they can maintain that they will be able to achieve more or less the annual figure to reach the RM115 billion in five years.

The positive news is the promise that the NEM provides. Of course, there are things that are unclear. Among them, you need to achieve 12.8% annual growth in investment over the next 10 years. Does it make sense? People are reluctant to believe that when it has slackened substantially from 1995 to 2010.

I remain convinced that NEM has provided the motivation that policy should focus on inclusive growth. In other words, embrace corporate social responsibility (CSR) practices as an inherent part of growth itself, not as a detached one, that you take care of afterwards.

NEM has taken head on the need to generate the human capital necessary to reinvigorate economic growth in the country.

Thirdly, the focus on the 40% of families with income levels less than RM1,500 per month. When you enable their thinking faculties, it gives them the opportunity to improve their situation, although the NEM does not explain that much. I would prefer that they look at the Scandinavian countries, so that they will create a welfare state without free riders.

There should be no misallocation of subsidies. There needs to be different instruments to address the problems of targeting subsidies. The focus should not be the distortion they think they are creating. Even if there is distortion, the welfare state will correct that better because you don’t have misallocation of resources.

You now identify the poor, which you know from the Statistics Department’s household income and expenditure survey. Of course, real income varies between locations, and you need to adjust for that. Then, if they divert the current system of providing additional income or coupons or whatever form they give aid in, then I don’t enjoy the subsidy, I don’t become a free rider, and neither does a foreigner.

It also reduces smuggling. That figure will be very small.

Although there are some sceptics, I think the NEM’s good points are that it provides the conceptual and epistemological rationale behind why these 12 economic activities should be done. That to me is exciting. What is not clear to me is that it is not very explicit about how they will go about doing it.

That same thinking is found in the 10th Malaysia Plan. Perhaps more foreigners were involved and they did not understand the workings of the macro organisations. Perhaps they weren’t able to outline the responsibilities to different ministries that the previous Malaysia Plans had done.

Those things need to be made clear, but we at least have the motivation.

You can also see universities now getting into this bandwagon of competition. In the past few years, Malaysian universities have been investing and working towards raising their performance, especially in the science faculties.

That means positioning themselves to hire anyone from any part of the world, provided they meet the standards required to perform. So, we can hire anyone from India, UK or elsewhere, provided they can provide the publications required, because we believe universities should be led by research to drive teaching.

These things weren’t done before. These are things that are happening, but the results may not be immediate, but the long-term effect will be there. Local staff strength is going up, as well as foreign staff standards, and this will have some kind of effect on the economy, including towards supplying the labour force in all fields, including science and engineering.

Is the Talent Corp idea workable and what are the lessons from previous exercises to attract the Malaysian diaspora?
I am a participant because I came back under the brain gain programme. I also coordinated the brain gain report of 2009 for MOSTI. We recommended that a Talent Advisory Council be set up. We called for an R&D investment of GDP of 1%. We wanted the ratio of R&D personnel and scientists per million persons to be raised from 367 to 1,500, if I recall correctly. I think they are looking at 1,000.

The Talent Corp, from the R&D side, again is not very explicit to me. It is hoped that we adapt from the experiences of successful countries. In a country like India, there is no incentive scheme for talent to come back, and yet there are all sorts of talent going back.

Taiwan and Korea are our real models, compared to Singapore, which targets the world, like the US. Taiwan and Korea have talent advisory councils which play an important role because they connected to the diaspora very well, and they gave them recognition to participate in the initiative.

You must look at the whole ecosystem that has been evolved. You must see all the parts, and the way they are organised. This is critical.

In the case of Taiwan, they continue to spin off incubators that are potential world class firms. Then they bring people from similar industries to head them, like Morris Chang, who was senior vice president at Texas Instruments taking over Taiwan Semiconductor Manufacturing Corp or Dr Wang from IBM. There are so many of them in many different things. You have all these hi tech firms like Vanguard, Asus, etc.

The advisory committee is very well linked to them. And they don’t discriminate, at least from 1985, because they recognise the role that they play. Before that, the local people thought they were the most loyal.

In the case of Malaysia, they must see a transition. We have a problem, again, of political economy. Most of these people abroad are not Malays. Of course, there are Malays too. Are they willing, say, to bring a Chinese, who may be the best suited to run Mimos? Or Silterra? This is an area we have to solve, because you are now competing. You cannot suddenly have a sub-optimal performer running a big corporation or a meso organisation without the standards that you put there in order to achieve running those things. Is Talent Corp going to do that?

We have a problem because more often than not the person who comes back plays a secondary role. He is not the boss and has no autonomy to do anything.

Let me give you examples of people who left. They came back, they didn’t mind being second in command, but the first in command often left critical meetings when the minister called. These people were trying to establish MoUs with critical suppliers, even buyers, from abroad.

But when they come, the main person is not there because the minister has called. And his position, if he doesn’t take care of the minister’s interests, he won’t be here. And the real talents are the people who came from abroad.

I thought this would be a rare case, but when I speak to them, I find that it is a common case.

Reinventing Malaysia’s economy

I must warn you that I have reproduced a very long piece from the Edge Daily. It is a first-part distillation of an interview that RB Bhattacharjee conducted with the Universiti Malaya Professor Rajah Rasiah:

Malaysia’s diminishing appeal to both foreign and local investors has been in the news of late. Energising the country’s economy will need some strategic policy shifts, Universiti Malaya Professor of Technology and Innovation Policy Rajah Rasiah, who has been appointed the Holder of the Khazanah Nasional Chair of Regulatory Studies, tells R B Bhattacharjee in a frank and free ranging interview. Here are some excerpts in the first of two parts:

TEFD: To what extent is Malaysia’s poor investment performance in recent years, as reported in the UN’s World Investment Report 2010, due to internal and external structural factors?

Rasiah: Investments have gone up this year, so the outlook isn’t bad. The government has made some changes that have had a positive impact. If the investment flow sustains, it is good.

Obviously the global recession has had an effect. Among members of a good neighbourhood that has done relatively well in relation to the global economy, foreign direct investment (FDI) having contracted only by 17% for Asean, you have us as really a bad example, showing a drop of 81%. That has sent a wrong message that things are not okay here, especially that Malaysia is probably the worst place to go and invest, because they have had the largest contraction.

But it could also be seen differently, that this is a country that does not really need massive FDI because it has the capacity to invest abroad, not only domestically.

There must be a holistic approach to investment dynamics, with government policy identifying FDI as an integral part of development policy.

The New Economic Model (NEM), as well as the 10th Malaysia Plan (10MP), addresses the need to focus on economic activities that provide the value-add required to bring Malaysia’s growth path back to the trajectory required to achieve Vision 2020.

We need to see how FDI can contribute. So far, a whole lot of FDI goes into manufacturing, and that’s one of the reasons why there has been a trend fall from the golden years of 1988-1993. It is because they are no longer competitive in low-end, labour-intensive manufacturing. We have delayed that by importing foreign unskilled labour.

It is recognised by the NEM, and 10MP, that we are facing a severe human capital deficiency problem. There have been attempts since the 1990s to overcome this, through the Private Investing Bill and a whole range of other instruments that were created. But they haven’t solved it; The deficit has been growing.

Malaysia is facing the problem of matured industrialisation. It is deindustrialising, meaning the share of manufacturing in GDP has started to fall since 2000, although the sector has not reached maturity status. The target is to achieve 20% value-add in Malaysia’s output, against 32% in Korea. In some sectors like steel, it is about 13%, it’s that low.

What that means is we are not migrating or upgrading our manufacturing sector sufficiently fast to keep up or at least stay in touch with Korea and Taiwan, as well as Singapore.

Prof Rasiah says there must be a holistic approach to investment dynamics, with government policy identifying FDI as an integral part of development policy.

Meanwhile, other countries that are growing rapidly — China, India and Vietnam — are closing the gap. Even more scary is their sheer size. Imagine, as India and China get closer, then surpass us, the consequences will be more difficult to deal with.

If you plan properly and address the shortcomings raised in the NEM and 10MP, at least you give yourself a fighting chance to make yourself attractive to those sectors where FDI is likely to come.

We must have the requisite human capital and macro-organisations that deal with R&D labs. This can be through specific sector specialisations, for example, R&D labs on electronics, like the Electronics Research and Service Organisation (ERSO) in Taiwan, and incubators then that are co-located.

That produces knowledge, which is critical. You have this systemic effect of knowledge that spills over into firms, which will find it attractive.

What advantage have we got in relation to India and China? We have much better basic infrastructure, comfort and choice of residence. These are things I’m picking up from interactions with CEOs of firms.

Once you have those serious deficiencies addressed, we will be better placed than our competitors, including Taiwan and Korea in many ways.

In these countries, there were clear government initiatives to develop indigenous capital. They saw that development meant the development of domestic capabilities.

They also recognised it is pointless reinventing the wheel. There are different paths to reach the frontier. They sought technologies that they thought the country should focus on.

Korea went into steel, electronics, shipbuilding and industries of that sort. They looked at the flagship firms in these industries in an attempt to catch up. Initially, because the gap was so wide, they went into licensing. Secondly, they hired Korean personnel working in those big firms because they carried passive knowledge, which includes experiential knowledge.

This allowed them to acquire a labour force that can really perform. They also remained networked to markets and R&D labs in all these places. They had a strategy of ensuring that all these flows of knowledge, either by licensing, using their own human capital or bringing back their diaspora, generated results.

They developed vetting, monitoring and appraisal instruments by evolving these capabilities. The equivalent of the Economic Planning Unit of Malaysia led the drive in Korea, Singapore, Taiwan and Japan. They improved by continuing to appraise and remove their mistakes, identifying new thrust areas and so on. They evolved planning and execution capabilities.

They relied on their diaspora for advice as well as foreigners whom they thought could contribute to them. If you have a mechanism with that sort of standards, then you can subject any performance to that measurement. They have that. We don’t. If you have that, then you can plan against the countries and firms you are catching up with, and close the gap. These are very critical.

FDI should not just be seen as capital flowing in, but includes multinationals which may not relocate here. One channel for developing our own skills is by either establishing an outsourcing link, and growing from there, or accessing technology through licensing.

What short- and medium-term measures are needed to restore business confidence in Malaysia?

In the next five years, the 10MP is seeking inward investment growth of RM115 billion, which translates to RM23 billion a year. This is not really impossible because we got more than that in 2007 and 2008. Only in 2009 it crashed.

If we say that we need FDI reviving, rebounding to the amounts that we recorded in 2007 and 2008, then we need to find out why those figures have gone down.

The dominant players that are coming in are industries that typically did not come here previously. In the 70s and 80s, it was electronics, garments. All that were big, and they went into manufacturing.

Now, it is Kuwaiti oil, even Indian firms into infrastructure and properties that are bringing in FDI. We need to go back to the drawing board and see if that is the sort of capital we still want. In those areas, we’ll have competition for our own producers.

Because we are also investing abroad a lot, and if you want them to allow us to build infrastructure in India, then you have to allow them to come here. Otherwise, bilateral arrangements don’t work.

But if you want to pursue the new growth policy, then we need to address and convince the firms that are here. Firstly, firms like Intel, for example, have been asking government leaders whether its plan to fast track applications for permanent residence (PR) has been executed.

Some, however, are concerned that this policy might lead to a dualistic economy where the set of foreigners who come may not have a long-term responsibility to the country.

It is still a fact that the government needs to tell investors that it means action. The officials must take the steps and put it out that we are already doing this, that foreigners working in firms here can now apply for PR.

We now have a one-stop agency that deals with the entire range of issues on this. So, those things must immediately take effect.

You are dealing with the FDI crowd here. These are flagship firms: Motorola, AMD and others. You are really dealing with the big guys in an industry I think is still important — electronics.

Secondly, Malaysia is known for its universal spread of MIDA offices, that were known to promote FDI, at least in the past, quite effectively, so that potential investors knew the investment opportunities here.

I feel the focus has shifted somewhat to tourism and related sectors. They must bring real information to potential investors. Don’t go back and promote the same thing because nobody believes it now.

In the 1990s, CEOs of Taiwanese companies told me they felt cheated coming to Malaysia. They were clearly told there was an abundant supply of cheap labour and they were literate in English. When they came, they had to go very far to get their workers. Once they got them, they brought them by the busloads to their factories. The next day, they had been poached by neighbouring firms.

Clearly, they didn’t have the labour force. The building was already up, so what could the investor do? One CEO was quite upset about this. It is unfortunate that they had to adopt practices such as holding back workers in the previous shift because they didn’t know how many would turn up in the next shift.

The officials have to recognise the transition that has taken place and they must have the requisite labour force. These need to go hand in hand. You can’t make statements about things you can’t deliver.

The longer you do that, the more people won’t believe you, like the boy who cried wolf.

The prime minister seems sincere in trying to see these things happen. But there must be execution by the officers who are made responsible. The line of responsibility should mean that the range of people involved must be made to recognise that they will be rewarded only if they continue to execute the things required of them.

Otherwise, if loyalty is the only thing that the leaders look for, then their officers won’t deliver.

Another measure would be to connect with the officials of the Ministry of International Trade and Industry and the Economic Planning Unit, who are looking at new species of industries to promote. The idea is not to create for the universe here, but to observe trends elsewhere, identify the right players and attract them here. For example, the planners are looking at solar energy and medical devices, which is already in the field, but now they want to go much broader into these areas.

This goes back to the same old strategy: you connect with a multinational value chain and attract them. The species are not new to the universe, but they are new to the country. Then it grows. It has happened before. The semiconductors moved to consumer electronics, then to disk drives. Suddenly, they went labour intensive, and on to other industries, computers and so on, and Dell came in.

But that strategy, I am reluctant to believe, connects with structural change. The structural change that is expected is not just about moving to different industries.

The most important thing is to move to higher value-add industries. They can be in the same industry category as such. If you’re looking at electronics, then it’s designing and wafer fabrication, where it gives you the higher value add which is necessary.

I’m not clear if they are going to reintroduce the policies which were seen before. You attract one industry, then you see a range of firms growing there, then suddenly they get up and go. That does not make for an economy that wants to progress from one level of income to another.

Taking up medical devices, there must be follow-up panels, comprising industries they want to promote. Previously, there was even avionics. In that case, you need to see that they will have at least design capabilities, if they don’t do basic research.

To do that, you need a different set of policies, which require a link with universities and R&D labs. All of them must be seen as an ecosystem that we need to have in order to have the sort of industries you think the country needs. Not simply industries by name, but industries that can support the value-add required to establish the growth rate so that we bring back the growth path to Vision 2020.

I wouldn’t like simply to do the promotion then, in economic terms, create a bubble; things that grow on the basis of perception. The prime minister is planning for a transformation, but when firms realise it’s not happening, then you see a huge fall because the requisite infrastructure, promotional instruments, macro organisations all have not been created.

You mentioned some concerns that industry representatives have raised about the business environment. What are the main hurdles in the way of attracting investments, from the political economy point of view?

We haven’t been successful at producing a responsible and capable labour force that can evolve with the expectations to become more productive. The kind of workers required can not only earn higher salaries but are able to support the upgrading of firms.

Political economy is one of the reasons why we have not been able to deal with the issue of targeting labour transformation. When the NEP was created in 1971, there were some shortcomings. The government had to introduce quotas for the Malays and non-Malays, for example, for places in education.

That was already flawed. Affirmative action should target providing equal opportunities. It should never be targeted at some because they have the colour or they think they were underprivileged before.

It gets worse because the community that you favour could have been financially much better endowed compared to the others who are competing for it.

We’ve got many things wrong, I think. The utility of money to the rich is low or zero. RM1 means nothing to the rich, but means a lot to the poor.

The dynamic argument is about moving the poor out of their situation by enabling their thinking faculties. Then they participate productively because they now have equal opportunities, and can perform better than the others. That’s the logic of affirmative action, not going along ethnic lines. If you do that, you may end up misallocating resources such that you may not establish equal opportunity. The beneficiaries could be the rich themselves.

Secondly, you no longer have the same standards for all. It becomes the right of one group to enjoy privileges.

In the initial stage, some good things happened. The restructuring targeted where the Malay communities were. They built canals, drains and roads. That integrated them into markets. That was enabling.

What was not enabling was the provision of 30% equity for bumiputeras. What do you establish from that, by simply fixing an artificial figure? That may even backfire because the poor Malays may not even enjoy it.

Because you have a framework of that sort, then a whole network of macro-organisations are created targeting bumiputeras. You have elements of collusion setting in.

I happened to have the opportunity to study Pusat Giat Mara and Institut Kemahiran Malaysia, both Malay-based.

I was visiting places in Johor, Perak, Selangor, I did not find the kind of skills they were teaching state-of-the-art.

When I spoke to the person in charge, I was told these students couldn’t grasp precision engineering and tool and die-making. I was surprised because this is the age at which you catch people’s attention. You never know how much they can learn. That’s the state-of-the-art skills the industry wanted, as reported in a 1994 World Bank study.

When I asked the Mara and polytechnic administrators, they said they were doing very well, because all their graduates get hired.

But when I went to the firms (this was at the peak of the labour shortage), they said they had no choice but to take them in and train them because they were already here and the misinformation was that skilled labour was in abundance here.

The training institutions claim they are market-oriented, but the firms say we pay lower salaries and we give them training. There’s no premium in that. They should bring the best to train the students. I would have preferred that they go to the poor irrespective of race, then you build nationhood, a society.

Even if you started with the Malays, the trainers shouldn’t have been those whose skills are mediocre. Get quality instructors even if you have to source them from abroad.

I criticised the political hierarchy in Johor on this point, and they said whatever you have said, we recognise and we’ll change, but I don’t think they have.

A World Bank official said, ‘Malaysia is an interesting country. Whatever FDI instrument there is in the world, it has, legislatively. But whether they enforce it and execute the policy properly, the answer is ‘no’.

When they say they don’t have the labour force etc, firms will say, they told us we can get tool and die makers and precision engineers from abroad, but approval is not easy. There is a lag period, sometimes they allow a few, sometimes they don’t. They talk about bureaucracy.

It’s also a tremendous waste of resources, isn’t it?

When I was doing the Iskandar Development Region strategic chapter, I spoke to many managing directors. Five of them told me they were keen on relocating their designing facilities from Singapore. Whatever Singapore has, Johor has. There are things Johor has that Singapore doesn’t have. Big land mass, more options for tourism, and they can have more people to work there, but unfortunately, after looking at a number of details they decided not to work there. Some CEOs decided they would drive to Johor daily from Singapore because Singapore is a better option. For example, education facilities are better.

I brought the matter to the state officials, who said, ‘This is the problem with Malaysians. Most of them run away to Singapore. Just 10% more wages, and they go there.’ One figure is that 50% of Singapore’s engineers are Malaysians.

We found some of these employees and talked to them. They said, ‘You think we’re fools? For 10%, we can’t get to see our children. They are asleep when we leave for work and again when we return. The real reason for choosing Singapore is that their problems with the local authorities are not solved because of bureaucracy. But they say we are a one-stop agency, we solve everything immediately.

The myth of homogenous ethnic Malaysians: The case of Chinese Malaysians

An interesting analysis has been done by Rita Sim, the Deputy Chairman if MCA's think-tank, INSAP, in a piece entitled, Untangling complexities of Chinese community where she proposed a framework of segmenting the Chinese Malaysian community into the following categories:

A proposed framework for segmenting the Chinese community is the "G1, G2, and G3" model. The majority can be identified as "G1s". They identify readily with traditional ideas of ethnic Chinese culture, language and expression. This group wholeheartedly supports Chinese media and schools. The existence of Huazong, Dong Zong, and other organisations -- including the MCA -- depends very much on the G1s.

The "G2s" are English-educated Chinese. Predominantly, if not exclusively, middle-class and urban, they identify more with specific civil society issues and are more likely to forge alliances with like-minded individuals or groups (church groups, for example, or Lions or Rotary Clubs) than with any of the traditional Chinese associations.

The "G3s" exist between these two groups in an overlap. G3 Chinese are those who, through language or work, have moved from one group to the other and survived, and perhaps even thrived.

The G2s and G3s are unlikely to associate themselves with any "Chinese" platforms at all, and may move in circles that are markedly multiracial as a factor of class and education. They are unrepresented politically by the MCA, as traditional communal dynamics cannot appeal to them.

This approach has been critically examined by Dr Daphne Loke in a 3-part series in the Malaysian Mirror.

Part 1: Political representation in M'sia

Part 2: Public issues and political actors

Part 3: Political representation in M'sia

The issue, essentially, involves the process in which one Malaysian community, the Chinese Malaysians, have sought channels through which their voices and aspirations may be heard.

The interesting insight offered in the above analyses is that formal political parties, be they BN or Pakatan, are a mere fraction of the channels through which Chinese Malaysian communities have used and, are using.

This should serve as a stern reminder to political leaders of all shades that like the Indian community, the Kadazans, Dayaks and other Malaysian communities, the Chinese Malaysian community is NOT homogenous in spite of all the racial stereotyping and profiling that political leaders often descend into. In the process of politicking and policy-making, the politcal players will find that the various Malaysian communities will defy ethnic and racial profiling and classification.

Malaysian political parties of all shades need to understand that the way forward is very likely to be that of preparing programmes that appeal to various Malaysian communities NOT on the basis of ethnicity but more relevant categories such as demographics, income-level, education and geography.

Failure to adjust to this reality will result in outright failure.

English at work is 'weird'

It is this type of completely flabbergasting views from within the ruling coalition's senior ranks that rankles and baffles the rest of Malaysia. This is the report:

MALAYSIA'S deputy education minister has said that speaking English in the workplace is 'weird' and harmful to the nation's culture and identity, a report said on Wednesday.

Mr Mohd Puad Zarkashi said employees in the private sector used English 99 per cent of the time and should switch to Bahasa Malaysia in order to show pride in the national language, the New Straits Times reported.

'This also occurs in government-linked companies where we have this weird culture of people speaking to each other in English instead of the national language,' he said at the launch of a linguistics seminar. 'We are polluting our own culture and identity as a nation,' he said.

'It would be difficult to strengthen the position of Bahasa Malaysia if this culture continued,' he added, urging Malaysians to emulate the French, Japanese and Koreans, who stuck to their own language.

The New Straits Times said Mr Mohd Puad also criticised young people for using a mix of English and Bahasa Malaysia in SMS text messages and on the Internet.

He called on the nation's leaders to use Bahasa Malaysia for all meetings and events and said that when he receives letters in English he returns them and asks for them to be written in the national language.

It is hard to imagine the Deputy Education Minister being able to understand this piece of advice given by Vikram Nehru, chief economist for East Asia and the Pacific for the World Bank:

THE World Bank said on Wednesday that Malaysia must introduce sweeping reforms if it wants to achieve its ambitious goal of becoming a developed nation by 2020.

'To reach the 2020 developed status, the World Bank is proposing a four-pillar strategy,' Mr Vikram Nehru, chief economist for East Asia and the Pacific, told reporters.

'Malaysia must specialise the economy further, improve the skills of its workforce, make growth more inclusive and strengthen public finances,' he told reporters at the launch of a report on the Malaysian economy.

The World Bank said Malaysia's economy will shrink 2.3 per cent this year but rebound to a 4.1 per cent expansion in 2010.

Mr Nehru said the South-east Asian economy was on track to grow between 5.6 to 5.9 per cent in 2011 and 2012.

The report said Malaysia faced the challenge of shifting from an upper-middle economy to a high-income economy.

Nationalistic hubris and fervour may be a form of gallery-pandering. But, it is tragi-comedy in the context of the difficult and challenging task of re-positioning Malaysia's economic competitiveness.

We are heading towards a rock and a hard place, as the Americans say, when we are no longer a low-income destination and, nowhere near a high-income sophistication in terms of human resources and skill sets.

The significantly lower amount of foreign direct investments is a telling sign that Malaysia's previous comparative advantage as a low-income, low- to mid-skilled manufacturing hub is waning.

What this country needs are political leaders who understand what's going on, not some opportunistic superficial mouthpiece who only spew nonsensical, inane and unhelpful remarks that serves only to rankle the rest of us who are trying to get the job done.

Shoe fetish: Dr M's exasperating opportunism

I found the Kaki Dalam Kasut post by Dr M very exasperating.

This is one example of his ability to titillate the basal instincts of his target audience.

Dr M is definitely not a racist. But, I do think he's too Machiavellian. Using his considerable intellect to tweak at the teats of ethnic sentiment is low.

He could have used his intellect for a positive view of things. But, the canny politician probably found that pandering to the ethnic gallery was a good idea to sustain his popularity. Spinning an innocuous question on political freedom and equality to a reply with a heavy ethnic flavour and a distorted socio-economic picture is irresponsible.

It's a waste of time to examine the definition of "master". What is economic "mastery" without political "mastery" when the latter allows the political master to misallocate the tax revenue collected from the economic players? Even this is an irrelevant issue.

As PM why did he permit non-Malay tycoons to get massive privatisation projects? Why didn't he as PM impose a "social tax" on these people so that some funds flow to the ethnic group that he now pretends to sympathise with?

On days when I'm very tired from the pressure of work, I dream of receiving handouts.

But, rather than rely on ethnicity as a crutch to prop up my superficial arguments, I would just say that during those difficult moments in working life, I dream of being an UMNOputra, an MCAputra or an MICputra. It's easy. Just play politics and get rent-seeking contracts.

The UMNOputra, an MCAputra or an MICputra are the Malaysians who should try and imagine how it feels being in the shoes (or, more appropriately, slippers) of average Malaysians, regardless of race. We are the ones who have to work hard and honestly everyday.

We are the lembu while the sapi is owned by Dr M and his former political subordinates.

That is why I found his post so exasperating.

And, perhaps this is why the whole of Malaysia has been waiting for 52 years (and counting) for the other shoe to drop in the context of this incessant and obsessive fixation on ethnicity by politicians of all colour, creed and credo.

pix from here.

By the way, for those with a shoe fetish, get the footwear idioms here.

Maids vs Work-life balance

There is another aspect to the maids issue that we tend to overlook. It may be ignored because at the micro-level there is nothing any individual can do about it. But a collective will may bring about a gradual shift.

Most families need dual-income or even quadruple income to finance their aspirations. Both parents need to go out to earn a living.

It is no longer appropriate to expect parents or in-laws to look after our children. Besides, they are ageing and, it is not fair on them. The extended family system of care that many older Malaysians used to witness and enjoy when we were children ourselves is a bygone thing. Another victim of "modernisation".

So, here we are. Housing loans to pay. Car loans to pay. Dining out. Inflation. Lifestyle. Tuition for the children. Saving for the university fees that our children will need.

The causes are manifold, of course.

So, domestic chores such as basic housekeeping, gardening, laundry, ironing and, cooking needs to be outsourced.

But, on a shoe-string budget most Malaysian families are prepared only to pay, say, RM600-00 for domestic help. And, the agents who intermediate on this, are more than happy make arrangements with their overseas counterparts, particularly in Indonesia, to liberally recruit all and sundry in the most remote villages of Java. There is hardly any quality control because screening and training is costly.

In the competitive stakes for domestic help Malaysians cannot afford to pay what the people in Dubai, Hong Kong or Singapore can pay. So, Malaysians are scraping the bottom of the barrel.

So, Malaysians have a problem. We cannot afford to have only one spouse work. We cannot afford good quality domestic help.

Is this due to a cheap and weak Ringgit?

Is this due to low wages and salaries relative to other countries?

Is this due to poor quality primary and secondary education that requires us to pay tuition for almost every subject to augment what teachers don't teach in class?

These are social and economic issues that requires a seriously holistic appraisal. The process has started albeit hesitantly. But, it will be a long and arduous path.

Where does that leave any aspiration for work-life balance?

That uncomfortable feeling that won't go away

There is an item of news today, a part of which reads like this:

Bumiputra and Indian investors have been asked to take up the remaining two billion Amanah Saham Malaysia (ASM) units as the Chinese have already snapped up their quota of 999mil units.

“I hope the bumiputras and Indians will not let this opportunity go,” Deputy Prime Minister Tan Sri Muhyiddin Yassin said in his speech yes­­terday when closing the Malaysia Unit Trust Week organised by Permodalan Nasional Bhd, which began on April 18.

“This clearly shows the level of understanding among the Chinese when it comes to in­­vestment and financial planning for the future.”

I cannot help this very, very uncomfortable feeling after having read the news report and, in particular, the verbatim quote of the DPM.

I can't explain it.

I know the DPM isn't trying to make me uncomfortable. But, unfortunately I do feel uncomfortable.

I was looking at how attractive the Bond yields were.

But, after reading this news report I had this strange feeling that the only reason why I could appreciate the attractiveness of the Bond yields was because of my ethnicity.

Is it because of my ethnicity that I can appreciate Bond yields?

That inference screams violently against all the skills that I picked up during the course of my being educated and taught - at primary school, at secondary school, at the undergraduate level and, at the post-graduate level.

Selangor Retrenchment Helpline

Selangor has a state retrenchment task force set up to aid those who have lost jobs and, the task force is expanding its scope to also tackle unemployed graduates.

The state’s career and resume clinics are being held at local government offices throughout the state.

At these clinics, retrenched workers can register themselves and obtain aid or advice.

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Apparently, there are officers from the state's Lembaga Zakat and Welfare Department present to help retrenched workers get assistance while consultants from Jobstreet.com are also in attendance to help find new jobs for them.

Tricia Yeoh, speaking as the Selangor state research officer is quoted as saying that the consultants will have a list of available jobs and can help workers apply for them.

“This includes cleaning up their resumes and preparing them to go for interviews.”

Applicants can also obtain information on retraining programmes which are available under the Human Resources Ministry at these clinics.

It appears that to-date most seeking help are blue-collar workers with only secondary education but these training programmes are an opportunity for them to upgrade their skills.

And, to-date 3,264 retrenched workers in the state have registered themselves either online or at municipalities and district councils.

These are good moves to deal with unemployment.

Apart from Selangor, other states should highlight their job placement, re-training and social safety net schemes.

For those who are in need do click on the Selangor Retrenchment Helpline link that I have embedded. And, good luck in your job placement!

Kudos to the Selangor State Government for this socio-economic programme.

Young Malaysians relying on Internet for info

To someone reading this blog in the Internet, this survey finding may seem obvious. But, there are some troglodytes out there, possibly in a position of power, who may not be imbued with this level of awareness:

Young Malaysians are increasingly relying on the Internet for information and to keep themselves up-to-date, according to a recent survey by market research company Synovate.

About 45% of the Malaysian youth interviewed in the survey said they planned to use the Internet more than other media, Synovate said in a statement today.

"Young Malaysians are definitely turning to the Internet more for their information and entertainment needs and it’s not surprising that the Internet is slowly becoming the medium of choice," said managing director of Synovate in Malaysia, Steve Murphy.

....

"Malaysians in general have embraced blogging and bloggers alike as a way of expressing themselves and this virtual form of communications has certainly had an effect on the nation's youth," Murphy said.

"A total of 21% of Malaysian youngsters create and update their blogs regularly and this figure is expected to rise," he said.

The survey also found that young Malaysians aged eight to 24 spend an average of 1.2 hours a day on email, one hour and thirty-six minutes a day as part of online communities, two hours and 48 minutes on instant messaging and two hours and 36 minutes on other Internet activities.

Be afraid. Be very afraid. Ignore this at your own peril.

A toll on BN strategy

I am quite bewildered by BN's tactical nous. My bewilderment arises in the matter of the declassification of the privatisation agreements for roads for public scrutiny albeit in a limited manner. Apparently you have to present yourself, pay a small fee and, you are given 2 hours to pore over each agreement.

This has led to an amusing (as opposed to amazing) race between DAP-PR and MCA-BN to produce their respective party's positions on the nature of the financial and operational arrangements between the government and the toll concessionaires. In both cases, to no one's surprise, the prognosis was a negative one.

The inference, quite correctly, is that the toll agreements are lop-sided in favour of the toll concessionaire. The agreements are said to minimise major financial and operational risks to the toll concessionaire while leaving the government to underwrite significant downside risks.

As it were, the monopolistic nature of the toll roads have proven to be a major financial coup for the toll concessionaires which proves that the traffic flows and urban planning studies were entirely correct. So, the toll operators are making tonnes of money. Both the DAP and MCA representatives are saying that the profits are excessive. Again, no surprises there.

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Roads are public goods
I have examined the issue of privatisation in a post entitled The Malaysian problem with the privatisation of public goods. Suffice to say here that roads fall squarely into the category of public goods.

Nationalisation of toll roads
I have also advocated the nationalisation of toll roads as one of several key economic issues in another post entitled An economic agenda to consider.

But, that was in June, 2008.

Two points
Having given a prolix preamble I have two points to present for your consideration. The first will deal with the economics and timing for any proposal to nationalise toll roads.

The second point is a humble observation on BN's tactical nous in declassifying the toll agreements at this time.

Economics and timing for nationalising toll roads
Upon examining the toll agreements, the DAP has called for the nationalisation of toll roads. Such a move will alleviate the financial burden on the public users of the toll roads in two ways. First, toll rates will be better regulated and, presumably lowered with each passing period of time. Second, any surplus or profits will be paid into the Consolidated Revenue as public funds.

These are sound propositions and, frankly, it warms the cockles of my heart since I have advocated the nationalisation of toll roads as a Malaysian economic strategy. But, there is a slight chill running down my spine at the same time. Why?

Funding the nationalisation process
The issue is funding. The toll concessionaires need to be bought out in order to amicably terminate the toll agreements. Without even having had the chance to read the toll agreements it can safely be assumed that there are sufficient provisions that require the unexpired portion of the toll concession period to be compensated. So, funding is required.

The federal government is cash-strapped. The fiscal policy is in deficit mode. Any funds scraped from the bottom of the barrel is likely to go to economic stimulus packages.

However, one clear source of funding is the issuance of sovereign bonds by the government. That should not be too difficult. It is easy to calculate the yields since there is a financial track record of the revenues received from the toll operations.

The problem will be to find investors at a time of global economic recession.

BN's tactical nous (or, the lack thereof)
If I were to wear the BN hat (something I literally did as a boy but, no longer ... because BN caps are not cool or properly designed, unlike the Nike Tiger Woods caps. But, I digress) I would be wondering about the political advantage for the toll agreements to be declassified at this time.

Perhaps the Works Minister can explain this.

As a citizen, a taxpayer and toll road user, I am happy with the declassification and the hard work done by the DAP and MCA to examine the contents of the toll agreements.

But, if I were a BN hack I would be wondering what the gameplan was?

You are exposing yourself to public opprobrium because the privatisation process, the toll agreements and negotiations were all conducted by the BN government.

The only mileage (pun intended) BN will receive from the declassification is that it has become more transparent. That is an abstract positive.

But wouldn't any BN strategists (if there are any) have given pause to consider that revelations such as these would only invite a real negative backlash? Didn't they realise that the toll agreements are rent-seeking arrangements that have upset Malaysian taxpayers and road users for the past two decades? Didn't they consider that there will be an outpouring of latent negative emotions when the rakyat finally discover that the bloody toll concessionaires have been profiting so obscenely while the rakyat suffered a higher cost of living as result of the toll roads?

And, for good measure, let it also be noted that if the declassification was an attempt to embarass past BN leaders that have become gadflies, the tactic fails for the simple reason demonstrated by a scene in Star Wars when Obi-wan Kenobi permitted his physical self to be slayed by Darth Vader after Obi-wan was certain that Luke Skywalker was safe. Thereafter, Obi-wan had become an ethereal and, yet ominous, presence as part of the Force. You cannot punch a shadow. 

Given these concerns, wouldn't it be more prudent to prepare a set of solutions in anticipation of the negative public response to the toll agreements before declassifying them? At least, BN could then say, Oh, yes! We knew that. That is why we have this plan in place and, ready for implementation to deal with the matter.

What were these guys thinking? In football parlance, this is clearly an own goal by the BN.

The Age of Aging

The Economist reviewed an interesting book by George Magnus entitled The Age of Aging: How Demographics are Changing the Global Economy and Our World that contains Malthusian overtones. Here are some interesting observations the review made:

EVERY age has its big demographic scares. In 1798, when the world’s population was about 1 billion, Thomas Malthus published his “Essay on the Principle of Population”, predicting that, thanks to mankind’s enthusiastic procreation habits, by the middle of the 19th century there would no longer be enough food to go round. In the event, people happily continued both to multiply and to eat.

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Indeed, in the early part of the 20th century, when the world’s population had grown to double that at Malthus’s time, fears started to run in the opposite direction: that people were having too few babies and mankind was in danger of dying out. The super-abundant baby-boomer generation after the second world war gave the lie to that. But by 1972 the argument had come full circle again. The Club of Rome, a global think-tank, produced a doom-laden report, “The Limits to Growth”, which claimed that within less than a century a mixture of man-made pollution and resource shortages would once again cause widespread population decline. What the think-tankers had not reckoned with was the green revolution. By the start of the new millennium the world’s total population had reached 6 billion. It is now expected to rise to nearly 9 billion by 2050.

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By 2050 the world will have about 2 billion people aged over 60, three times as many as today. In parts of the rich world, mainly Japan and western Europe, that age group already makes up nearly a quarter of the population. By 2050 their share will rise to 30-40%, and even in the—much younger—developing world it will go up to 25-30%.
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There is no doubt that global greying will happen. Many of the people that will contribute to it have already been born, so short of some catastrophe that kills off large numbers of people, or some Viagra-fuelled leap in birth rates, population numbers and age composition can be predicted with fair accuracy for decades ahead. What remedies should be adopted it is much harder to say.

The pundits who have pronounced on this over the past decade or so fall roughly into three categories: those who claim that this is just another Malthusian scare story and can be sorted out with a few tweaks to retirement ages and pension policies; those who preach gloom and doom (a meltdown in asset prices, poverty in old age, health-care rationing and even intergenerational warfare as the young and the old slug it out for scarce resources); and those in the middle, who crunch the numbers and try to come up with sensible ideas to make their effect less grim.

This book falls firmly into the last category. It provides a clear, sober and well-written analysis of the problem, both in developed and developing countries, and runs through the options for heading off the worst effects. The biggest part of the solution lies in expanding the shrinking band of workers, mainly by getting people to retire later and persuading even more women to take up paid employment. At the same time more productivity will have to be squeezed out of the labour force that remains. And people will have to be persuaded to save a lot more for their old age.

Read also, John Wiley's review of the book.

Blue Ocean distortion

Dr Azly Rahman's academic and intellectual credentials are beyond reproach. He is a Malaysian academic based in an Ivy League campus in the United States. His written pieces are usually ponderous and thought-laden. It takes quite a while to read, let alone consider his pieces which are mini-theses in and, of themselves.

This Malaysiakini piece, entitled Blue Ocean distortion by Dr Azly is, by his standards, quite accessible. More importantly, he slices and dices with such a high level of precision, the recent Blue Ocean speech by the Deputy Prime Minister and, by so doing, completely devastate the central thrust of that speech.

It's a lazy, hazy Sunday. I am not mentally nimble enough to even dare to summarise Dr Azly's analysis. So, I'm taking the trite route of reproducing his piece in Malaysiakini for your edification. As I said, it is a devastating response to you-know-who's speech:

"... Because blue and red oceans have always coexisted however, practical reality demands that companies succeed in both oceans and master the strategies for both. But because companies already understand how to compete in red oceans, what they need to learn is how to make the competition irrelevant."

MCPX

- Kim and Mauborgne, Blue Ocean Strategy, pg. 190

You must be the change you wish to see in the world.

- Mahathma Gandhi

Leaders are fond of discussing management concepts and theories of social change and next, apply them to political paradigms.

They do this within the framework of Structural-Functionalism in which society is seen as a stable entity such as in the case of ‘power transfers’ and the ‘transitions of hegemony’.

Oftentimes political leaders and their opinion leaders, technocrats, intelligentsia, speech-writers, perception managers, and other members of the regime will embrace new ideas to help fine-tune the political economic structure of the old regime and help sustain the base and superstructure of the power arrangements.

These days, a popular concept of change in Malaysia and Asia perhaps is the blue ocean strategy in which the idea of cooperation takes over competition, and that novel opportunities are to be created to contribute to an environment in a future that promises more peaceful coexistence between producers and consumers, and providers and clients.

This idea is taken from the work of W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, published in 2006 by The Harvard Business School Press.

In a yet to be charted territory of the blue ocean, competition is said to be irrelevant.

Innovative companies thrive without having to compete for saturated markets. ‘Red oceans’ of chaos and competition is abandoned for ‘blue oceans’ of conflict resolution and collaboration, as this new idea goes.

Again, limited findings from the study of a few business entities is used as a model to be applied to public service.

Is Malaysia a blue ocean?

To answer this one must consider what state she is currently in.

Malaysia is wading through the (dark and dismal) River Styx in which her McCarthyism is keeping dissenting voices in jail, hunting down students and faculty, arresting peaceful protesters, battling with new media, making its politics of race and religion is evolve into a Balkan and a Bosnia.

The postmodern condition of this open sky neo-capitalistic country is debilitating and its citizen are in utter confusion of where the national leaders are bringing them to, at time when the central and ethnic-based leadership is rotting to its core, creating a hideous form of a human being infected with a Human Papilliomavirus.

Especially at the time of the December party elections the level of corruption within the ruling parties is at a critical stage that even those vying for top leadership have admitted that one needs many millions of ringgit to get elected.

This is happening at a time when the poor of all races are struggling to survive by the day, maintaining a roof over their head, and making sure that their children have food on the table.

Malaysians are in a bipolar condition in a unipolar form of governance in which there is the belief that only race-based politics is the one best system.

Dissenting views are to be crushed and destroyed by any means necessary, and the hegemony of the previous regime need to be maintained either through force or false consciousness inflicted upon the masses.

The red ocean of Malaysian politics

Malaysians are charting into an unknown territory brought about by the yellow wave of the recent March 8 revolution and the red Makkal Sakthi cries of repression, anger, and frustration.

There is also the ever ‘green’ ideology of Islamic-based parties and the light blue radical multiculturalism of PKR adding to the Kandinsky and Jackson-Pollock type-of political landscape painting of this country's future.

There is chaos and complexity in the pattern of political scenario, unlike the ‘blue ocean’ strategy feel-good ideology embraced by Barisan Nasional leaders who probably have not done an internal and external reading an critical analysis of what actually blue ocean strategy means in which the country is now trying to choose between depression and the deep blue sea.

In short, Malaysia is in a bloody red ocean that has been plagued with cut-throat shark-eat-shark world of racial politics.

In all these, Malaysians are in need of a leader that will not only embrace all these colors of change and turn them into a ‘rainbow coalition’.

Use that as a symbol to navigate through the blue ocean to arrive at a destiny that will promise a land of opportunities for all, less annoyance of race and religious politics, and onwards to march of participatory democracy and further on towards the reconstruction of a republic of virtue grounded in ethics of philosophical, economic, and political sustainability.

Replace paradigm and people

The theme in the book Blue Ocean Strategy, is hope for the creation of a future of peace and prosperity.

In Malaysia, who has the licence to give that hope? Who has the ability to be the captain of new consciousness and steer away from a Vision 2020 that has become a Myopia of 2012 as Malaysia's await the next General Election?

Is the present government, ailing with social cancer that started from the head and now heading to the soul, able to help create a blue ocean?

Can it do so with the happenings in the Judiciary, Executive, and Legislative?

This is a question Malaysians have to answer fast, while "hitting the ground running" as an American saying goes.

Paradigms and people need to be replaced. Democrats in America cannot rehire 'Bush-men of Texas' to navigate through the American Kalahari desert of Casino Capitalism in order to enter a new world of the unknown.

Can Malaysians do that too -- continue en masse supporting a regime that has betrayed its people?

Can Malaysians afford another 50 years of race-based politics albeit fine-tuned?

Making incremental changes are like fixing a machine that has interchangeable parts whereas that machine need to be reassembled or disposed in a junkyard of history together with its operators and owner of the means of economic and ideological production.

New games need brand new players.

In a game of strategies played in the deep blue sea, we need a clear blue sky above us with a rainbow right above so that we may learn to think elegantly like dolphins - rather than think brutishly like piranhas that will turn the ocean bloodier.

Denial or the Nile?

I read this Malaysian Insider op-ed piece entitled, The economy: Government not in denial but... with a twinkle in the eye and a loud sigh. Such a contradiction in physiological response can only come from reading news reports about the Malaysian government.

Many Malaysians, even those who are not contemplative by nature, cannot avoid the sensation that something is about to give way. We're not sure what. The air can sometimes be so thick with tension that you can use a knife to cut through it. Behind the quietude of the happy and inscrutable mask that Malaysians wear the electrons are zooming around the connected synapses of Malaysian minds about things that may not be said.

There are things Malaysians can't say aloud for fear of offending of ethnic sensitivities.

There are things that Malaysians can't say aloud for fear of offending religious sensitivities.

There are things that Malaysians can't say aloud for fear of offending language sensitivies.

There are things that Malaysians can't say aloud for fear of economic sabotage.

These are things that Malaysians can't say aloud for fear of incarceration.

Just what exactly can Malaysians say?

There are even things that the Malaysian government can't say aloud for fear that Malaysians will suddenly lose their confidence.

So I say aloud here and now that many Malaysians should apply to emigrate to any part of the great nation of Egypt that is appurtenant to the Nile.
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Re-visiting Veblen

Some time ago I wrote about Thorsten Veblen and his thesis on conspicuous consumption. In almost all economic news of late, the overt intention of most governments is to implement stimulus packages that are intended to stimulate consumer demand.

What kind of consumption is are governments talking about?
Do governments want consumers to consume anything and everything that they can afford? Or, do they mean basic necessities? Basic necessities have to consumed anyway to provide humans with a comfortable living.

Do the governments also hope that consumers will also consume luxury goods also? That would appear to be the case. Consume. Consume. Consume.

Maslow's hierarchy of needs
Abraham Maslow was quite a guy. You can read about his theory on the hierarchy of needs here. This basic construct of the psychology of consumption has influenced generations of management and marketing people.


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Where are your needs within this hierarchy? In our modern society, unless you are poverty-ridden, we head straight for the top. We always perceive ourselves at the level of self-actualisation.

Beyond the brief language of the pictogram above, modern corporations have adopted a detailed understanding of the need for Esteem and Self-actualisation even more than we can imagine.

Advertising stimulates conspicuous consumption
Maslow's pyramid is the foundation upon which the entire advertising industry frames their marketing and promotional campaigns for corporations.

The idea is to tell the consumer that he or she will have better self-esteem if they are seen to own and consume certain luxury products. Thus, a Perodua Aviva is different from a Toyota Camry. Thus, a Poh Kong diamond is different from a Lazarre diamond.

The idea is to tell the consumer that he or she is seen to have arrived at the peak of the socio-economic ladder, self-actualisation, when they are are seen to own and consume even more expensive products. Thus, a Toyota Camry is different from a Mercedes S320. Thus, a Lazarre diamond is different from a Tiffany diamond.

The production trap
The role played by advertising to stimulate desire and, therefore consumption and demand is only one aspect. This is where I will try to get to what I believe to be the structural problem with modern capitalism, the production trap.

This expression, production trap is an expression that I hope to have just coined. And, if some great economist has coined it earlier I will immediately offer my apologies.

What do I mean by production trap? Briefly, I want to draw your attention to the ridiculous situation where almost every product undergoes model and design changes within very short periods of time.

Just staying with the car analogy. I seem to recall that prior to the 1980s, a new car model launched will stay the same for at least four to five years with some very minor modifications. Since the 1990s, car models are changing every two years.

Even if you don't have any inkling of production costing, you will know that when the shape of the car model changes, when the dashboard changes, when the headlights and rear lights change, all these mean that a lot more money is being spent on industrial design, production of new parts and even more advertising and promotion.

The basis for this trend of quickening model changes is competition.

This leads to ever more rapid consumption and discarding of old models. Multiply this phenomenon a billion-fold to every single product (other than meat and vegetables) and you will get the picture of the production trap i.e. the reckless and continuous production of similar goods and services in the name of capitalistic competition to meet the redundant wants of consumers whose needs have been more than fulfilled.

The RM64 billion question (it used to a RM64 question but, now got hyper-inflation) is, how does modern humankind get off this careening and bumpy wagon?

Now, THAT would be a thesis that is worthy of a Nobel prize.