Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : ST.CATHERINE
Tarikh/Date : 16/04/96
Tajuk/Title : MARKET ECONOMY AND MORAL AND
CULTURAL VALUES -
A MALAYSIAN PERSPECTIVE
1. I consider it a great honour to be invited to
this august seat of learning to give a talk on
Malaysia. I have chosen to speak on `The Market
Economy and Moral and Cultural Values' from the
Malaysian perspective and I hope it is a tolerable
subject.
2. The economy of Malaysia has come a long way
since its independence in 1957. From being a
producer of primary commodities, namely tin and
rubber, it has become a fairly heavily
industrialised nation with almost 80 percent of its
total exports valued at about US$70 billion made up
of manufactured goods. Its economy has been growing
at an average of 6.7 percent since independence,
with 8 percent plus growth sustained during the last
eight years. The per capita income grew from US$300
at the time of independence to about US$4,000 in
1995. Inflation rate has remained low throughout,
averaging three percent, so that the Purchasing
Power Parity of the 1995 per capita income is
actually well over US$10,000.
3. Malaysia has always been a free market economy.
Socialism and Communism with their centrally-planned
economic theories never made any headway in
Malaysia. True, there were experiments with
Government-owned companies and State Economic
Corporations, but these existed side by side with
private enterprises. Unlike many newly independent
countries, narrow nationalism which invariably
results in the nationalisation of foreign-owned
companies, did not rear its intolerant head in
Malaysia.
4. But it must be admitted that the Government did
buy a number of large foreign companies,
particularly mining and plantation companies. But
it did this through the market, buying up a majority
of the shares of Guthrie Corporation in the London
share market for example. The British Government
immediately stepped in, declaring that `dawn raids'
were henceforth to be regarded as illegal. Since we
did it before it was declared illegal, it should
have been accepted in good spirit. However,
Malaysia was accused of backdoor nationalisation.
5. But at home foreigners have always been welcome
to participate in the economy. When in 1982 the
Government decided to opt out of business and to
privatise many of the Government's functions and the
companies it owned, foreigners remained free to
purchase shares in the stock market and participate
in privatisation from the initial stage. Such is
our faith and liberal attitude towards the free
market economy.
6. Along with privatisation came the concept of
Malaysia Incorporated, i.e. the partnership of the
private and public sectors in the interest of
speeding up the development and economic growth of
the nation. It is difficult to identify what
contributes most to Malaysia's good economic
performance. But it is fair to say that
privatisation and the Malaysia Incorporated concept
contribute a significant share towards this growth.
7. From the growth figures mentioned, it seems as
if all was smooth sailing for the economy of
independent Malaysia. This is far from true. A
multi-racial, multi-religious, multi-cultural and
multi-lingual country, Malaysia was not the best bet
among the former colonies of Britain which gained
independence after World War II, to grow and
prosper. Indeed, it started off on the wrong foot.
The attempt by the British to unite the Malay states
and the Straits Settlements into a Malayan Union
where all who happened to be there would be
considered citizens, sparked off tension between the
indigenous Malays and the Chinese. Race relations
was far from harmonious when Tunku Abdul Rahman
brought the Malays, Chinese and Indians together
under the Alliance banner and gained independence
for the country in 1957. To this fragile mixture
was added in 1963 the other races and tribes in the
states of Sabah and Sarawak in Borneo.
8. For a time the Tunku's magnetism held this
unstable mixture together. Independent Malaysia
grew economically on the rubber and tin trade
developed during the colonial period.
9. Then in 1969, following poor performance of the
government party, the Alliance, in the election,
race riots broke out in Kuala Lumpur. People were
killed; shops, houses and cars were burnt. As
Malays and Chinese and their political parties
glared at each other, the Government declared a
state of emergency and suspended Parliament.
10. The International Press which had always
predicted disaster for the polyglot nation, visibly
gloated over how correct they had been. Malaysia
was written off. The experiments at democracy were
described as a failure. Having taken over the
Government, the Malays would impose authoritarian
rule. The economy would regress and Malaysia would
become a basket case.
11. In the event, democracy was restored in less
than two years, Parliament was recalled, and in the
interest of reducing the risk of recurring racial
conflicts, approved a New Economic Policy (NEP)
designed to eradicate poverty and the identification
of race with economic functions. In other words, a
bold experiment in socio-economic engineering was to
be the main thrust of the Government, so as to
reduce the disparity in the wealth between the
different races, a disparity which was identified as
the basic cause of the race riots of 1969.
12. Many Malaysians and the outside world were
quite cynical of the NEP. Social engineering even
within a single racial community, as represented by
the Socialist and the Communists, had not really
succeeded. The only result was to equalise the
distribution of poverty. How could novices in the
art of governing manage a complex socio-economic
engineering programme involving such an unstable
pluralistic society with large disparities between
them, as was found in Malaysia in 1970 when the NEP
was launched, succeed?
13. The Government imposed many constraints on
itself. The whole scheme was premised not on taking
from the richer Chinese in order to enrich the
Malays, but on stimulating the growth of the
economic cake and then distributing the enlarged
cake to correct the economic imbalances between the
races. The whole scheme really appeared far-fetched.
Getting the economy to grow in any country,
especially a developing country, is difficult
enough. But to cause it to grow and to restructure
it at the same time is really hopelessly optimistic.
14. Political stability is a prerequisite for
economic growth. In 1970 when the NEP was launched
nobody expected that the riots of 1969 would not
occur. How then can the Malaysian Government even
think of achieving so many things simultaneously;
political stability, economic growth and the
restructuring of its society through a complex
scheme of affirmative action?
15. But Malaysia has done it. There is political
stability and a democracy in which the opposition
has not only won many Parliamentary seats but has
actually toppled the government party and taken over
state Governments. Racial peace and harmony is far
better than found in any other multi-racial country.
Indeed, it is better than in some European countries
where off and on racial minorities have been bashed
and their houses burnt sometimes with the occupants
still in it.
16. Economically Malaysia has done quite well too,
achieving more than eight percent growth every year
for the past eight years while maintaining inflation
at about three percent. The market economy is
flourishing, with privatisation helping to lessen
the financial burden of the Government while
boosting the infrastructure. Such is the confidence
of the Government that it has actually dared to
launch a 30-year perspective plan. The Plan calls
for average yearly growth of seven percent so as to
become a developed country by 2020. Looking at the
record, 6.7 percent growth in the 20 years up to
1990, it is not unreasonable to expect the target
to be achieved.
17. As an instrument for socio-economic
engineering, the New Economic Policy (NEP) deserves
a few lines of comments. Initially, it was condemned
by many as discriminatory against the Chinese in
favour of the Malays. But most Malaysian Chinese
not only accepted it but actually cooperated in its
implementation. When it was found not to dampen
economic growth, the critics turned on a new tack.
18. They now condemn the NEP for benefitting only a
few Malays, particularly those close to the ruling
party, UMNO. It is true that some of those who
succeeded in business are close to UMNO, a party
with 2.4 million paying members and many millions
more supporters. Considering that there are only
six million adult Malays, it would be amazing if
some of those who benefitted from the NEP are not
UMNO supporters. But the fact is that very many
Malays who are in UMNO or close to the leaders are
far from being rich. They merely benefit from the
general improvement of the economy like everybody
else.
19. The NEP is not about producing millionaires
among the Malays only, as the detractors imply. It
is for all Malays and other indigenous people at all
levels. Through the NEP, hundreds of thousands of
the indigenous people gained a headstart through
scholarships for higher education at home and
abroad, training in all kinds of skills, loans for
petty trading, even outboard engines for in-shore
fishermen. Most importantly, poverty was reduced
from 50 percent plus to a mere seven percent for
Malaysians irrespective of race. There is now full
employment. Everyone's income, including those of
the non-indigenous citizens, have more than
quadrupled while the cost of living remains low with
only three percent inflation on the average. There
are today almost as many rich Malays as there are
rich Chinese and ditto for the middle class and the
poor. In other words, a more equitable society has
emerged, contributing to a degree of racial harmony.
20. These are the results and the record of the
much-maligned NEP, perhaps the only socio-economic
engineering project that has truly succeeded.
21. When Malaysia talks of becoming a developed
country it is not thinking of industrialisation and
per capita incomes only. Wealth and success have a
way of undermining the moral fibre. Countries which
are regarded as developed now show evidence of decay
in societal values which must eventually lead to
their retrogression. In history, great empires and
nations have emerged which looked as if they would
last forever. But wealth and power corrupted them.
The drive that built them in the first place was
lost. With varying speeds they all collapsed and
became mere shadows of their former selves.
22. The fall of the Roman Empire was due to
overindulgence and loose living on the part of the
ruling class. The pleasures of life, hedonism,
replaced good human values. The affairs of state
were neglected. Power corrupted the Romans in all
ways. And the Empire regressed and collapsed.
23. We detect the same trend in modern developed
countries. The virtues of working, the so-called
Judeo-Christian ethics, are no more. Everyone wants
to do less and less work for more pay and more
leisure. Wages go up while productivity lagged
behind. Competitiveness is lost.
24. When challenged in the market place by new
industrialising countries, the developed nations
resort to arm twisting. The developing countries
were told to work less and pay higher wages.
Sanctions are threatened ostensibly because of human
rights violation or pollution of the environment.
Democracy is made an issue. If there is democracy,
then the standards are said to be not right, and
need to be corrected or face restriction in trade.
25. Not only have work ethics deteriorated, but the
normal institutions of society seem to collapse.
Thus marriage and family have lost their legitimacy
in society. Homosexual marriages and unmarried
single parent families have been legitimised. The
family has broken up.
26. Hedonism is pursued by all. The clothing worn,
music and songs, films, dances, the graphic arts and
everything about daily life is centred on sex and
sensual pleasures. Gratification of the senses
seems to be the main purpose of life.
27. Religions have been downgraded. If at all
religion is practised, it has been so corrupted that
it is hardly the religion that was originally
preached. Thus religious authorities sanctioned
homosexual marriages and turn a blind eye to live-in
mates, casual sex, nudism and all kinds of
immorality.
28. Perhaps the discarding of old values and the
acceptance of absolute freedom reflect the advanced
thinking of a very mature society. But developing
countries like Malaysia, while desirous of being
developed, are not convinced that the collapse of
our moral values are good for our society. We want
to retain our values and our standards of morality
while achieving economic development in the material
sense.
29. Perhaps Malaysia is too naive. Practically all
human societies deteriorate after achieving wealth,
power and success. The cycle which empires go
through is well-known to everyone. Indeed, we are
witnessing the deterioration of great empires and
nations taking place today right before our eyes.
But still we will try.
30. The peoples of European origins have devised
systems of Government and management of the economy
which have made them rich and powerful. At one time
their empires smothered the globe, leaving no race
or country free or outside their sphere of
influence.
31. The achievements of the Europeans naturally
captured the imagination of the peoples of other
civilisations. The Japanese were the first to
emulate the European. They not only restructured
their system of Government but they even tried to
set up European-styled empires. And European ways
of organising business enterprises and doing
business were copied wholesale.
32. Following the break-up of the empires after
World War II, the newly independent countries
naturally adopted the European model of economic
management. The East Asians are perhaps the most
adept. They adopted the free market system of
Europe while imbibing and improving on the
technology. However, they retained their work
ethics.
33. In a very short space of time, the East Asia
nations had developed to the extent that they were
able to compete with Europe. The retention of their
work ethics apparently gives them the edge over the
Europeans.
34. When the Europeans were on their way up they
too had good work ethics. Work was regarded as
honourable. Loyalty to the establishment was
regarded as a good trait. Although the skills no
doubt played an important part in the economic
success of the West, hard work, loyalty and
discipline contributed much to their achievements.
35. We in Malaysia cannot help but notice all
these. Malaysia has embraced the free market
economic system fully. No other country in the
world has implemented privatisation as Malaysia has.
The Government considers that it is its duty to
ensure businesses succeed and are profitable. The
whole Government machinery has been reoriented in
order to support business activities.
36. And so today Malaysia has become one of the
fastest growing countries in the world. We are
elated and have become somewhat egoistic according
to our detractors. It is pointed out that of late
we have been building monuments. The world's
tallest building, the world's biggest airport, a new
administrative capital, new roads, new railways etc.
37. But have we already started on the road to
decay even as we announce our ambitious plan to
become a fully developed country?
38. It would be satisfying to be able to say that
we are totally free of the early evidence of decay.
But it must be admitted that there are some signs.
39. Drug taking has continued despite severe anti-
drug laws. Young people are given to loafing and
the mindless pursuit of fun and pleasure. Loyalty
to the establishment has diminished. Commercial
crimes have increased. Corruption is still very
much in evidence though not to the extent that is
made out by foreign critics.
40. To achieve developed nation status, as defined
by Vision 2020, it will be necessary not only to
sustain good work ethics and morality but to
actually roll back some elements of the national
culture which are not conducive to good progress.
To do this not only must the legal system be
adequate to deal with any breakdown in the ethical
code but an active campaign has to be mounted in
order to define and propagate good values. These
things will not be approved by Western liberals.
But Malaysian society still believes that freedom
should not be absolute, that Government has a duty
to promote good values and to protect the people
from the breakdown of moral and ethical standards.
41. These the Government is actively doing.
Religions are promoted. Work ethics and cultural
values are defined and deliberately cultivated.
Slogans and campaigns are carried out, as are talks
and seminars on subjects which are no longer valued
by the West.
42. We may succeed or we may fail. We may actually
be doing the wrong thing. Wealth and success will
probably undermine our morals anyhow. In the end we
may decay like the others. But we are not going to
just sit back and do nothing. We are going to try,
and we are going to try very hard.
43. We think the market economy is a winning
formula. We are convinced by it. But what is the
good of prosperity which is transient? What is the
good of prosperity if in the end we are going to
return to the status quo ante; to be back to square
one, to be poor and miserable again?
44. Some societies, realising the deleterious
effects of material wealth and power, have chosen to
remain poor and, so they think, morally strong. But
to us there is no virtue in poverty and weakness
even if our moral fibre remains strong. We have
experienced the indignity of poverty. Morally
strong people going around with begging bowls and
`kowtowing' to the powerful and the rich hold no
attraction for us.
45. So we will continue to try and achieve the
impossible. We must, in order to retain our honour
and dignity, our sense of values and our pride even
when we become developed and exposed to the
corruption of wealth.
46. Malaysia has succeeded so far, even if we say
so ourself. We think we can succeed in achieving
our dream. God willing, by 2020 we will be a
developed country in the true sense of the word -
developed materially, spiritually and enduringly.
47. As Malaysia continues its transformation into a
market-driven industrial economy, we see the
important need to retain the very basic foundation
of our success thus far, and that is our moral and
cultural values. While we strive for progress, we
must not lose sight of some of the basic positive
aspects of our society - the Malaysian society. We
need to assess the positive values of the developed
nations, adopt and modify them perhaps and retain
those of our own values and culture which we think
are good and constructive.
48. Vision 2020 is not just about attaining a
certain rate of growth over a specified period of
time through the market economy. It is not about
becoming a developed nation at break-neck speed. It
is not about development at all cost, but
development as we define it, progressive and more
durable.
49. My hope is that in the year 2020, a leader from
the next generation of the new Malaysian society
would stand here and, with pride and humility,
report on the status of the vision and that status
is as what we have envisioned.
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