Malaysia at 55

BANGKOK — Was it only 55 years ago, when Malaysia was formed on 16 September 1963?

On that day, I was super proud to witness at the parade ground in Jesselton (today Kota Kinabalu) the formation of an independent nation, joining Sabah and Sarawak with the 11 states of Malaya.  One forgets easily today that it was a time of grave uncertainty, when the Philippines had a claim on North Borneo and Indonesian President Sukarno was actively against the idea of Malaysia.

At the middle age of 55 years, an individual could be forgiven for reflecting on those golden days when we did not think we were just Malays, Chinese, Indians, Kadazans, Ibans or Orang Asli.  We were simply Malaysians, proud to get rid of colonialism and eager to form a unified, independent nation.

Economically, Malaysia has become one of seven top “outperformers” that achieved or exceeded real annual per capita GDP growth of more than 3.5 percent for the last 50 years or 5 percent annual growth over 20 years (McKinsey Global Institute, September 2018).  The top seven are China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, and Thailand.  Furthermore, Malaysia is placed 20th out of top 30 countries globally for connectedness, mainly because of her advanced infrastructure, strategic location at the Malacca Straits and sound policies on trade and communications.

But globalization has also created inequality, particularly between the rural and the urban.  Malaysia was one of the first countries to tackle inequality seriously.  The Malaysian New Economic Policy (NEP) was a pioneering effort to narrow the economic and wealth gap.  The NEP succeeded in creating a Bumiputra professional class, but it has not succeeded so far to create a Bumiputra entrepreneurial class. The dilemma is that entrepreneurship cannot be nurtured politically, because cronyism overwhelms entrepreneurship.  And without entrepreneurship at all levels to generate inclusive income and wealth, inequality will not be narrowed, risking even more social tensions.

Malaysia is an example where identity politics has made nationhood much more complex.  As political philosopher Francis Fukuyama identified in Foreign Affairs recently, “groups have come to believe that their identities – whether national, religious, ethnic, sexual, gender, or otherwise – are not receiving adequate attention.”

Fukuyama shrewdly pointed out, “multiculturalism has become a vision of a society fragmented into many small groups with distinct experiences.”   The more specialized we become by profession, creed or religion, the more we break up into pockets that do not talk to each other, even when we use the same language.  This is true not only in the United States, but almost all across the world.

The central challenge, in Malaysia as in the rest of the world, is how “to define larger and more integrative national identities that take into account the de facto diversity of liberal democratic societies.”

Because Malaysia is both diverse culturally, religiously and ethnically, as well as connected globally, the quality of education has become seriously debated, since education also shapes identity.

To progress, education and re-skilling – how our citizens are equipped for the modern age – will determine what management philosopher Peter Drucker (1909-2005) called a knowledge society.   Competitive knowledge defines future growth and prosperity, not the color of students’ shoes (one of the first acts of the new Minister of Education).

To Drucker, “the knowledge society, by definition, is a competitive society, with knowledge accessible to everyone.”  But widespread knowledge means that aspirations as well as frustrations increase simultaneously.  Polarization occurs precisely because not everyone has benefited from the Knowledge Age.

Success through entrepreneurship comes first from failures.  The more we protect ourselves from mistakes, the less chance we have of future success.  We grow by learning from our mistakes.   Thus, the willingness to accept failure and yet protect the needy is not just an economic issue, but also a moral and political imperative.   How to do this has been the fundamental challenge of building an inclusive yet prosperous society.

The traditional way of taking care of the social good has been the state or the firm.  But with the rise of free market capitalism, most companies pay lip service to their social responsibilities, focusing mainly on their bottom line.   Furthermore, increasing the size of the bureaucracy not only does not deliver the expected quality of social services, but also becomes a source of corruption.

Indeed, one of the curious features of Malaysian politics has been the overbearing influence of political warlords, who know how to run the system by creating divisions by race or creed, but not necessarily how to fix the problems, because they are themselves obstacles to change.

Drucker suggested that we need a social sector that enables individuals to help contribute to society through the sphere of community service.   What he means is that a community cannot be an artificial concept, but requires all of us to work together daily to solve common problems, not delegate it to another government agency or hoping that profit-oriented companies will do that for us.  That means that growth will come from experimental diversity, not from centralization.

Because Malaysia is a Federation, the centralization of powers has not solved many of the complex and diverse problems at the local level.  What is needed is more delegation of powers to the state, city and local levels, allowing different communities to experiment on how to bond diversity together through common values that can only be shaped through trial and error.

In 2018, Malaysia voted for change.  Thus, the nation would be stronger if the government does less and the communities do more for their own futures.

Since he became Minister of Education in 1974, then Minister of Trade and Industry and Deputy Prime Minister, twice Prime Minister Tun Dr. Mahathir has led and shaped the most important policies of Malaysia for 29 years out of 55.   With a coalition government of very diverse interests, there is both hope as well as a cacophony of different signals.   And amidst all the noise, the external environment has become as confusing and dangerous with the coming storms of global trade wars, emerging market crises and geo-political rivalry.

How the nation will celebrate her 60th birthday in 2023 will depend very much on how Tun Dr. Mahathir steers Malaysia to get his legacy straight in the days ahead.

That is the true Malaysian dilemma.

The author, Andrew Sheng, writes on global issues from an Asian perspective.