PROLOGUE
There are multiple crises in country’s economic developmental effort since gaining independence that culminated to present precarious state of a nation in trillion dollar debts after six and a half decades of economic growth. By itself, each crisis is a calamity, but collectively – as each subsystem is linked with associated suprasystems – constitute the catastrophic crises of capitalism in its manifestation: meaning that there are deep structural contradictions and challenges for this country.
What distinguishes between these crises arising from factors outside of country – as exogenous crises – and those generated by contradictions within own domestic economic and political environment, as endogenous crises. Exogenous crises included the inflation that confronted the present caretaker government, the global economic instability of 2008, and the Asian Financial Crisis of 1997, while endogenous crises included those associated with significant developmental phases and turning points, such as oil exploration and exploitation by and with Big Oil, FELDA land resettlement, the New Economic Policy, and Industrialization in the early 1970s, and later premature de-industrialisation and the subsequent financialisation capitalism phase. By the time of capital financialisation, the nation was engulfed with the insurgence of Political Islam, a Ketuan Melayu narrative, state corporated capitalism and increasingly an indulgence in wide-spread odious corruptive practices. In each instance, the resolution of the problems of one crisis carried within it the seeds of the next, a dialectical process which is continuing to the present period of uncertainty in economic affairs and possibility in the furtherance of political instability post-General Elections, November 2022 (GE-15).
These cascading crises are indeed not isolated incidences but formulated policies that subjugated rakyat2 to deliberated dependency to ruling regimes. Dependency Theory became closely identified with the Latin American Left in the 1960s and ’70s, when there was already a long history of such analysis (notably the work of José Carlos Mariátegui in the 1920s). The Cuban Revolution and the ideas of Che Guevara – as well as Andre Gunder Frank’s article in the Monthly Review where he stated that development of underdevelopment is about less developed countries being entrapped in dependence and dominance relationship with rich countries. Only that it also occurs when an ethnocratic governance practices kleptocracy – supported by national corporate capital that is connected to monopoly capital in the Global North that is assisting national kleptocrates to dominate their owned and controlled client states in the country.
All these crises have moments that may be budgetary or fiscal system imbalances and stresses which required policy intervention and innovative resolutions. They are regarded as “crises” in classical political economic sense that we have explored, and expanded, on many other national politico-economic issues for the past ten years in various postings and publications that shall be summarised as the dozen dimensions herein.
1 With neoliberalism economic policies as the preferred approach since independence , but without shared common prosperity nor progressive elements of developmental governance ethos or a new ideal socialist praxis referencing an equitable distribution of social wealth. The preferred present economic growth model undermines, and underdevelop, the country’s developmental effort.
This is compounded right at the birth of nation when coteries of foreign advisors from the Colonial Office, Development Advisory Service Harvard (DASH), the World Bank and International Monetary Fund - succesors to IBRD and IDA - successively spun the narrative threads of neocolonialism, and later neoliberalism, and then bonded by neoimperialism intent that tightened the knots in dashing the country’s vision of betterment on a shared common wealth environment.
Through successive advisory consultancies have the World Bank and its twin entity the International Monetary Fund (IMF) attempted to restructuring the economy (IMF, 2001) or in implementing an infrastructure project than socio-economic considerations (World Bank 1957) to the quest of productivity growth (World Bank, 2016) and re-energise public sector (World Bank, 2019), by aiming high to achieve an accelerating growth path (World Bank, 2021), and to surge ahead (World Bank 2021b), but most catastrophically, country is still mired and entrapped within capitalism crisis to crisis in a struggle to catching up, (World Bank, 2022) among ASEAN peers:
(To read E.S. Anderson's A note on Erik Reinert's Listian-Schumpeterian Development Economics 2008); Reinert 2009; Vries 2013; Ohlin et al have collectively argued that structural change and innovative creativeness are the keys to eradicating not only poverty, but a better prospect in sharing a common wealth destiny.
What kind of development does a country need to share wealth within communities and between states? Then, we also need to ask what kind of institutions can promote socio-economic development? Third, how to develop? These three questions are crucial to understand why Malaysia – despite 65 years of “developmental effort” – performance outcomes that are glaringly deteriorated among emerging market countries (EMCs) in ASEAN, and even has accentuated poverty in Sabah and Sarawak states within its borders.
Schumpeter had once outlined a fundamental distinction between economic development and economic growth. This distinction helps us to approach the first question. Mere quantitative growth does not amount to economic development. Schumpeter (1934/2012: 64) had said figuratively that adding successively as many kerera api coaches as one pleases, one shall still never get a railway thereby. GDP growth nor Petronas towers, for example, do not equal an Schumpeterian economic development.
Economic development ‘comes from within the economic system and is not merely an adaptation to changes in external data; it occurs discontinuously, rather than smoothly; it brings qualitative changes or “revolutions,” which fundamentally displace old equilibria and create radically new conditions’ (Elliott 2012). A country needs this kind of economic development to escape impoverishment (Reinert 2009 op.cit.), otherwise, rakyat² continously being poverty poors (firesstorms, 2021).
Schumpeterian institutions are concerned with the importance of innovation in generating new knowledge and modes of production, which helps move the economic activities to the next ‘stage’ or ‘paradigm’ (on Reinert and Vries studies, 2000). Schumpeterian institutions tend to focus on production, and this stands in sharp contrast to the view of institutions adopted by mainstream economics and local legacy economists in the Economic Planning Unit (EPU), which focus on the free market and trade and favours export-led and FDI-driven economic growth (Reinert 2006;Lim Mah Hui, 1982) where transnational corporations suppressed indigenous capitals and exploitated workers through labour arbitrage.
Further, Schumpeterian institutions differ from the World Bank’s conception of ‘good institutions’ including those for ‘building market institutions that promote capital growth to the detriment in poverty reduction and social benefits (World Bank 2002: III).
At a time when 70% of lower-income households cannot even meet monthly basic needs – indeed, more than 60% of these households reported having no savings at all – not much of a difference than 10 years ago:
After six and half decades of sustained neoliberalism economic developmental effort, the nation of Malaysia is still as accentuated in absolute income inequality as ever:
In short, if development in Malaysia is to be self-directed and comprehensively inclusiveness, then traits of such a “developed society should also embrace secularisation, industrialisation, commercialisation, increased social mobility, increased material standard of living and increased education and literacy besides such things as the high consumption of inanimate energy, the smaller agricultural population compared to the industrial, and the widespread social network” (Syed Hussein Alatas, in a paper presented at the Symposium on the Developmental Aims 1996, pp 70-71).
Prof Dr. Mohd Tajuddin Mohd Rasdi, Professor of Architecture, meanwhile, has extended the concept building of what is known as “beehive apartments” for urban poors where each capsule consists of basic living needs; and to allocate graduates and youths with 100 acres of farmland using the latest technology to solve national food security and rural employment, thus encouraging domestic entrepreneurship.
Related article:
Neoliberalism is Neoimperialism
[ To be continued… ]