What change? A reply to Dr M ― Pak Sako

January 4, 2013

What change? A reply to Dr M ― Pak Sako


Dr MFormer Prime Minister Dr Mahathir Mohamad published a piece called “Change” yesterday in his blog. In it he asked why change governments.He then criticised the socialist ideology. He strangely claimed that “Malaysia has no ideology”.

That is completely untrue.

When Dr Mahathir came into power in 1981, Malaysia was introduced to the neoliberal ideology.This is an ideology that is biased in favour of corporations and capitalists.It is the opposite of socialism, which aspires to put people first.

The neoliberal ideology was aggressively promoted around the world in the early 1980s by influential global networks of business interests and their supporters. Their mantra?Sell off public assets. Remove regulations, so big businesses can run free. Control workers’ wage demands. Cut public expenditure.

Dr Mahathir joined the bandwagon. This is well-documented in books and papers.His economic advisors were businessman and enigmatic lawyer Daim Zainuddin and the well-known neoliberal strategist, Kenichi Ohmae.

It was Ohmae’s rejected mega-project to create a “Multimedia Supercity” in Tokyo that got malaysia-modernity-multimedia-super-corridor-tim-bunnell-hardcover-cover-artrecycled in Malaysia as the “Multimedia Super Corridor”. Read Dr Tim Bunnell’s book, “Malaysia, Modernity and the Multimedia Super Corridor” (2004) (right).

Ohmae’s ideological influence was “extremely significant”. And what other ideology is that if not neoliberalism? After becoming Prime Minister, Dr Mahathir quickly announced a privatisation policy in 1983 — in line with the standard neoliberal programme.

Publicly-held assets were sold off to private business interests, entrepreneurs and corporate “captains” to supposedly make the economy more ‘efficient’.  But efficient for whom?

The “massive privatisation strategy” carried out during Dr Mahathir’s tenure is said to be linked to “increased competition for resources within the ruling Malay party [Umno]”; it redistributed resources “in favour of emerging factions centred on key political leaders”.

That is what political economist Jeff Tan found out and wrote in his book, “Privatization in Malaysia: Regulation, Rent-Seeking and Policy Failure” (2008).Indeed, many privatisations are improperly justified handouts for the capitalist elite from the public coffers.

Selling off the public’s holdings remains a favoured economic policy of the Malaysian government until today. Witness the recent sale of Penang’s port and other public-owned assets to well-connected tycoons.

The neoliberal ideology calls for weaker worker unions so that big businesses can have theKS Jomo “economic freedom” to exploit workers to maximise profits.Again, the Malaysian government’s development agenda subordinated labour in favour of private business interests in the 1980s under Mahathir’s watch, according to economist KS Jomo (right) and Patricia Todd in their book “Trade Unions and the state in Peninsular Malaysia” (1994).

Labour organisations in Malaysia are weak relative to business power. They have no bite to negotiate for better working hours, conditions and pay.The neoliberalism ideology wants ‘free markets’ in labour, so that the ‘price’ of an employee (his wage) can be competed down if necessary. Fixing minimum wages is bad.

Dr Mahathir forcefully argued against minimum wages in Malaysia, claiming it might bankrupt Malaysia, without providing sufficient evidence (“Dr M: Minimum wage may bankrupt Malaysia”, The Malaysian Insider, March 2, 2012). Dr Mahathir did not bother at all to consider the positive aspects of minimum wages.

The neoliberal ideology is opposed to strong states that directly ensure the people’s welfare, but it supports a strong state to enable businesses and capitalists to flourish freely, to ensure corporate welfare.

This involves all kinds of hidden subsidies and supports for businesses, including overlooking environmental regulation and standards.And so we have today Lynas and the threat of radiation. Our rivers are polluted by business activities, and yet the people must pay businesses to buy water filters for their homes and mineral water.

Dr Mahathir does not like the welfare state approach, which says “if we properly meet basic social needs and securities first, economic prosperity will come”. Dr Mahathir prefers the opposite, neoliberal approach, which says “support the corporate class, and enough wealth will ‘trickle down’ to the people”. Now Malaysia has one of the higher income inequalities amongst the Asean countries. The super-rich are sucking hundreds of billions of dollars out of the country in illegal outflows.

johan-saravanamuttuDr Mahathir complains about an unjust neoliberal world order, but Dr Mahathir hypocritically follows the neoliberal ideology, says political science Professor Johan Saravanamuttu (left) in his book Malaysia’s Foreign Policy, The First Fifty Years (2010).

Even the Nobel economist whom Dr Mahathir is fond of quoting, Joseph Stiglitz, has rubbished this neoliberal ideology, calling it a “grab-bag of ideas” about markets supposedly serving the public interest by “privatisation, liberalization”, when, in fact, it is simply “a political doctrine serving certain interests”. Read Stiglitz’s article called, “The end of neo-liberalism?” (2008).

On debt, Dr Mahathir says Greece borrowed a lot of money and is bankrupt.But Europe fears Italy has also borrowed too much and is going bankrupt Malaysia has been given a financial warning: a top debt ratings agency says our public finances are weak, and are at the same level as debt-struck Italy (“Fitch warns Malaysia of possible downgrade due to ‘deteriorating’ public debt ratios’, The Edge, 1 August 2012).

Malaysia’s debt is now more than half of the income Malaysia as a whole earns in a year.Malaysia's Debt This debt is RM470  billion. This debt nearly doubled since 2007, or in just four years.This is to say every Malaysian now owes about RM16,000. If you earn RM4,000 a month, then you need to give up four month’s pay to settle the debt.

Dr Mahathir says: “Look at [Barisan’s] record… compare it even with the developed West. They are in deep financial trouble…”

Dr Mahathir says: “Five years to give a trial as government is dangerous. Many things can be destroyed in five years.” But which government doubled Malaysia’s debt in less than five years? Barisan Nasional, right? ― english.cpiasia.net

8 thoughts on “What change? A reply to Dr M ― Pak Sako

  1. Rukun Negara, what is that if it is not ideology? NEP was influenced by the ideas of James Puthucheary who was a socialist and later a capitalist. Socialism, nothing wrong with that if it means social justice and equitable distribution of income.

    Privatisation was intended to improve efficiency, It did not. Taken to extremes privatization when you privatise everything under the Malaysian sun from sugar and rice distribution, rubbish collection, postal services to ports, roads, and power generation leads to cronyism. Mahathir’s privatization policy is Mahathirism or crony capitalism. Read Kunio Yoshihara, The Rise of Ersatz Capitalism in South-East Asia. Good article by Pak Sako.–Din Merican

  2. Our Captains of Privatization have become to big to fail and of late too big to jail. We are now offically in a Privatization Trap. Citizens have been warned that if they vote to change government their future will be jeopardy. We have no choice. We have keep voting for BN to keep the good times going.

  3. The northern European welfare states where social democracy is strong (such as Norway, Sweden, Finland) rank among the highest of all nations in terms of human development indicators. They are also some of the least corrupt nations in the world.

  4. What will the Prime Minister and his Cabinet Ministers do once he and they “The government for the people, by the people and of the people.” become the Government?

    Did Mahathir (22 years as PM – 1981 to 2003)) and his Cabinet Ministers did their best to govern the country, “for the people, by the people and of the people”.

    Yes, during his time as PM privatisation was the order of the day and the rich became richer, the jobless got a place to work, to buy car and house and to feed the family. Even legal and illegal immigrants come down to Malaysia to work in the construction, plantation, manufacturing and food and other industries, business and trades.



  5. A few months ago, he said he was no intellectual and NOW he wants to argue that his views on ideology. I tell my employees, anyone – be it customer, your subordinate or your managers are inconsistent in what they tell you – you get rid of them when you can..They are simply dysfunctional people..

    We have enough details today that we now know that the root of the problem between Mahathir and Anwar was that Anwar prescription for IMF-type medicine in 1998 would have wiped out Mahathir family & closest cronies, that would enabled Anwar and his friends to take over. That chasm is still fundamentally the same..Anwar has locked himself into a commitment for his comeback that he must collide with Mahathir and Mahathir has too long a trail of malice that losing would lose too much..

    Everything else said and everything else party to this fundamental fight is actually secondary. Ideology, the agenda of the parties, the people and country welfare, the players etc are actually secondary..

    But the real point is that Mahathir is SIMPLY WRONG – the same way Marcos, Mugabe, Mubarak etc are wrong. They don’t have a right to make the kind of decisions about their political interest or their ideas and agenda without respect for rules, procedures and fair-gamemenship.

    There is no point discussing the merit of Mahathir’s idea or arguments. Its secondary. He is simply CANNOT BE RIGHT because the ends, his personal interest, don’t justify the means not when the means are broken judiciary, mediocre schools, crime, high inflation, potential financial armeggedon in a crises.

    Its not we cannot change, WE MUST because HE & HIS KIND WON’T..

  6. Rukun Negara, Dato? Theoretically Yes, practically, Never.

    The only Rukun that is being practiced by Octo is idealism of a Pragmatic Despot and Machiavellian Authoritarianism – in order to consolidate and concentrate power within his many appendages. His ‘evil’ outweighs his good. That is what history should show. And it may take several generations to overcome the Entitlement sentiments, due to the paradoxical superiority hubris (some call it neo-feudalistic fascism) of an emotive inferiority complex. Hard to understand? Yeah..

    Did you know that the arms of a cephalopod are actually outgrowths of their lips? Whatever they grasp, goes into their mouth. One of their cardinal defense techniques is to blind their predators with a cloud of ink.

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