Transcript IMAGE(S) OF MALAYSIA`S MODERNISATION: A

IMAGE(S) OF MALAYSIA’S
MODERNISATION: A CRITIQUE OF
DEVELOPMENTALISM
Abdul Rahman Embong
Emeritus Professor & Principal Fellow at IKMAS, UKM
Keynote address at the
International Conference on Reflection on Development and Beyond:
Exploring Alternatives to Social Progress held in Kuala Lumpur on
21 March 2015
Modernization & development
• Modernisation & development -- two key
concepts & policy imperatives at the centre of
debates in developing countries in their agenda
of nation-building.
• While modernisation and development closely
inter-twined, but conceptually distinct:
Modernisation refers more to socio-cultural and
political change -- it’s about society-making;
• Development is more economic in nature; about
growth, industrialisation, employment, income,
etc.
Images of Modernisation
• ‘Image’ or ‘images’ are part of the imagination
by elites and ordinary people.
• But society divided into classes, ethnic groups,
religious groups, regions, etc., their
imagination need not be the same
• Thus the ‘image of modernisation’ should be
spoken more in the plural than the singular.
• This paper – focused more on image(s) of
mdoernisation that’s state-driven
Three defining moment – on images of
Malaysia’s modernisation
Three defining moments that shape images of
Malaysia’s modernisation
• 1957, 1963 – Federal Constitution
• 1970 – Rukunegara (National Philosophy)
• 1991 – Vision 2020
Federal Constitution – 1957, 1963
• Federal Constitution -- founding principles of
modern state
• Defines character of state & standing of citizens
• Federal-state relations; underlines secular, multiethnic and multi-religious character of the
country; with citizens granted rights &
responsibilities.
• What was envisaged was evolution of a modern
united multiethnic society with different groups
respecting and accepting each other as citizens.
Rukunegara – 31 Aug 1970
• Preamble of Rukunegara adopts an inclusive and
far-sighted approach presenting an image of
modernisation as the evolution of a united,
democratic, just, liberal, and progressive society
based on science and technology.
• The five principles of belief in God, loyalty to King
and country, supremacy of the Constitution,
upholding rule of law, and good behavior and
morality are principles in building such a modern
society.
Vision 2020 – Feb 1991
• United Bangsa Malaysia (first & most important
challenge)
• “By the year 2020, Malaysia can be a united nation,
with a confident Malaysian society, infused by strong
moral and ethical values, living in a society that is
democratic, liberal and tolerant, caring, economically
just and equitable, progressive and prosperous, and in
full possession of an economy that is competitive,
dynamic, robust and resilient.”
• “There can be no fully developed Malaysia
until we have finally overcome the nine
central strategic challenges that have
confronted us from the moment of our birth
as an independent nation.”
• To achieve developed nation status, GDP
required to grow at 7% p.a.
• Vision 2020 – announced at a qualitatively
different stage, i.e., during a period of what I
would call ‘developmental triumphalism’
(Malaysia Boleh) following Malaysia’s
dramatic economic growth and the East Asian
‘economic miracle’.
• Key policies – NEP; NDP; NVP, etc..
Developmentalism – some key points
• Developmentalism as ideology of development for
nation-building & to catch up with the West.
• A doctrine/ideology that legitimises the role of the
state in development and of the right
arrogated/claimed by the state to conduct social
engineering in the name of nation building
• A doctrine that defines the country’s economic
performance in terms growth rates & increased living
standards; & its achievement as the state’s central
source of legitimacy
• Market dominance with state working closely with
market; and dominance of capital over labour.
Developmentalism … contd.
• Emphasis on stability & continuity -- thus authoritarian rule should
be tolerated as a means of ensuring law and order to create
stability and confidence for foreign investment.
• Demands people to show gratitude as they ‘owe’ their well-being to
the goodness of the regime, and thus should give it their loyalty and
support.
• In sum, developmentalism creates the conditions for
(a) Dominance of development as inevitable & necessary for
progress, & that society should give way to development;
(b) Dominance of state over society, and of the acquiescence and
dependence of the latter on the former, and that the state should
not challenged;
(b) Dominance/hegemony of capital over labour.
Change of discourse…. From Developed
nation to High Income Nation
Najib Razak (2009 -- )
• 1Malaysia
• New Economic Model (2009)
• Government Transformation Programme (Jan
2010)
• NKRA
GOALS OF NEW ECONOMIC MODEL
NEM -- Characteristics of Malaysia
in 2020
ECONOMIC TRANSFORMATION ECONOMIC PROGRAMME (ETP)
launched 25 Sept 2010
•
•
•
•
•
Making Malaysia a High income Country
Gross National Income (GNI) GNI – US$523 bil.
Per Capita US$15,000 from US$7,000 in 2010
6% GDP growth per annum
High-income threshold of US$15,000 is based
on World Bank’s threshold for a high-income
economy of US$12,476 & global inflation rate
of 2% until 2020.
Shift in Discourse
• Discourse has shifted from “developed nation” to “high
income nation” – income as indicator.
• Rich nation is quantifiable; measured in terms of name.
GDP per capita – average income, not income
distribution.
• What are implications of shift in discourse? –
‘Developed nation’ concept multidimensional –
tangible & intangibles; ‘income’ unidimensional.
• Little attention paid to challenges in Vision 2020 –
developed nation discourse of Bangsa Malaysia –
creation of united, psychologically liberated, liberal &
just society
WHAT IS REALITY of income & living
standards?
‘Poverty & inequality in a High Income Nation’
Some examples:
• 14 million EPF contributors
• Wages low
• Inequality (Gini measure)
• Debt
Earnings of EPF Contributors 2015
• Total no. of contributors: 14 mil.
• 75% earn less that RM2000 per month
• 15% earn between RM2000-RM5000
• 10% earn RM5000 & above
• EPF calculation – At time of retirement (55), to have retirement
income of RM800 a month to live for 20 years, each contributor
needs to accumulate savings of RM196,800 at time of retirement.
• BUT only 20% of EPF contributors who turn 55 this year expected to
have RM196,800 or above in total savings.
• This means 80% of EPF contributors who turn 55 this year expected
to live below poverty line of RM830.
• That percentage is likely to stay about the same in the coming
years beyond 2020.
• EPF CEO said for the next 20 years, the
workers would not have enough in total EPF
savings to enable them to live on RM800 a
month, which is close to Malaysia’s average
poverty line income of RM830.
• WHY? Because most of them had low wages
when they started contributing to the fund in
1980s, and continued earning relatively low
salaries till they turned 55.
Wages as % of GDP
• Wages as percentage of GDP: Malaysia very
low at 33.6%
• Malaysian Government is planning to increase
the ratio of wages to GDP from 33.6% in 2012
to 40% by 2020
Share of Wages as % of GDP (Various Countries)
•
•
•
•
•
•
•
•
•
Malaysia – 33.4%
Singapore – 40%+
Australia – 48.7%
Norway - 51.3%
Sweden -- 53.8%
United States – 57.9%
Germany -- 57.9%
Japan -- 59.6%
South Korea -- 63.7%
Income Inequality measured by Gini
Low inequality -- Scandinavian countries
• Sweden – 25.0
• Norway – 25.8
• Finland – 26.9
V. High inequality -- Africa
• Seychelles – 65.8
• Comoros – 64.3
• Namibia – 63.9
• South Africa – 63.1
• Zambia – 57.5
High inequality – Latin America
• Bolivia – 56.3
• Colombia – 55.9
• Brazil – 54.7
• Paraguay – 52.4
• Chile -- 52.1
Inequality in North, Southeast & South
Asia (selected countries)
• Malaysia – 43.1 (2013)
• Philippines – 43.0
• China – 42.1
• Indonesia – 38.1
• Vietnam – 35.6
• India – 33.9
• Pakistan –
• Bangladesh – 32.1
• Thailand – 30.4
Nation & society in debt
• Three types of debt – government, corporate and household (as %
of GDP)
• Government debt -- 35.3% (2001); 45.7% (2005); 55.4% (2010);
53.1% (2013); just slightly below the statutory ceiling of 55 per
cent.
• Corporate debt rising -- 79.9% of GDP (2007) to 95.8% (2013).
• Household debt -- overall trend rising
Household debt -- 69.0% of GDP (2006); 76.0% (2010); 83% (2013)
one of the highest levels in Asia.
Loans from banks, finance companies and other institutions for
various purposes. Purchase of residential properties and nonresidential properties took up 56% loans in 2012
Housing loan repayment takes up about 45% of income; the rest
goes to pay off car loans, personal loans (17 per cent), credit cards,
etc.
Consequences of developmentalism
on society
• Ethnic divisiveness; assertion of ethnic &
religious identities rather than Malaysian
identity
• Rise of uncivil society along ethnic/religious
lines
• Perpetuation of old politics versus new politics
• Culture of dependence; lack of
competitiveness; opaque practices
Moving Forward
• Reaffirm the basic principles of Malaysia’s
modernisation – Constitution, Rukunegara,
V2020
• New disccourse -- Economic growth & societal
growth
• Promoting Societal growth: a multi-dimensional
concept that refers to growth in institutions,
culture, values, social equality, social capital,
human relationships, respect for diversity & social
inclusion.
• Change of paradigm: From ethnic to nonethnic paradigm (beyond ethnicity)
• Focus on social development and social justice
– overcoming developmentalism
• Inclusive growth – i.e., growth for distribution;
share of wages to GDP should be increased.
• Appreciation of talent
Questions
• With Malaysia’s emphasis on developmentalism, what
happened to the quality of growth and development –
has it been socially inclusive, economically competitive
and ecologically sustainable?
• Second, with such an over-drive towards a high income
nation status, what happens to the agenda of fostering
a united and developed multiethnic society that is at
peace with itself?
• Under conditions of 21st century globalization, what
are the possible alternative pathways for the country’s
future?