February 4, 2016
Hard Wiring Malaysia Inc.
by Dr. Munir Majid
Given many present challenges and new commitments, it is time to take a relook at Malaysia Inc.
DURING his time as Prime Minister, Tun Dr Mahathir Mohamad introduced the Malaysia Incorporated concept inspired by the practice in Japan when he took office in 1981.
The good idea did not always work well in practice as some businessmen took advantage of their close association with the Government – usually the political leaders like Dr Mahathir himself – to ram things down the official throat. There was also the opportunity of enticement that was not always avoided. In time Malaysia Inc. became discredited.
However, the need for official and private sector cooperation for the benefit of the economy is perennial. The good and the bad of it depends on the conduct of the parties – as in any association.
Given many present challenges and new commitments it is time to take a relook at how Malaysia Inc. could be hard-wired in the interest of the nation.
Of course, Malaysia Inc. has not quite gone away even if it may have been left to wander. At the strategic level of the macro economy various bodies exist or are formed to address the broad issues.
Dialogues between the government and private sector take place as a matter of course, whether fixed or ad hoc, like the budget dialogues and those called by International Trade and Industry Ministry.
Particular industry sectoral concerns are also heard and furthered. Industry groups and business organisations form themselves to lobby their cause. Some get very political and others very technical with different levels of success. Professional bodies too air their views or grievances to expand or protect their turf.
There is thus plenty of occasion for private sector representation with government and officials. This, however, needs to be taken to the next level of projecting or protecting particular Malaysian interests in specific contexts in a highly globalised world.
It is a pity the TPPA debate was polarised and became a stick with which to beat the government. This should not, however, obscure the fact there are some valid contra arguments which could do with closer examination, even if Parliamentary approval has been obtained for the TPPA to be signed.
The test of good government is to engage wider society for the good it wishes to achieve.
The government led by Dato’ Seri Najib Tun Razak has been under attack for so long for the 1MDB issue and the huge donation of money that went into Najib’s account that Malaysia is in grave danger of losing the plot.
Malaysia will continue well after Najib. Malaysians – the government, the officials, the private sector and civil society organisations – should look into that future and think about the welfare of Malaysia.
Even if political leaders are distracted and are concerned only with the short-term, governmental institutions must function with a sense of permanence and the strength of great professionalism.
Look at Thailand where the bureaucracy and the private sector and opinion makers have continued to perform despite the frequent and often violent changes of government. That country would have gone to the dogs without them.
With respect to the TPPA, it would be necessary for the bureaucracy in Malaysia to be strengthened by the establishment of a high level committee comprising officials, businessmen and professionals, and functional bodies, to monitor its impact on the Malaysian economy and society at large.
Additionally, given the nervousness caused by the Investor-State Dispute Settlement (ISDS) provisions, it would be a good idea to set up a national technical committee in the Malaysia Inc spirit to simulate situations where the country might be dragged to court or, indeed, where Malaysian investors abroad could protect their interests.
This technical committee could also prepare a calm and collected background paper on the ISDS to get the national mind round it.
A better hard-wired and effective Malaysia Inc machinery should also be formed in respect of the ASEAN Economic Community (AEC). I can think of at least two worthwhile committees: one to identify opportunities and the other the challenges, particularly for the small and medium enterprises.
From my experience with the ASEAN Business Advisory Council, I find specific, focused and project work to be of greater benefit than the big ticket meetings – the so-called dialogues – where often the most tangible outcomes are photo shoots with ASEAN leaders and ministers.
There is a lot of work involved in hard-wiring Malaysia Inc. Industry bodies and persons must be truly committed. It is necessary for private sector representative bodies to be strengthened with both financial and human resources.
The internal organisation and processes have to be less political and more technical. It is all too easy – and lazy – to play racial politics also in bodies purportedly of commerce and industry.
On the official side, there is often a rush of meetings which comes in through one door and goes out the other. There has to be a discipline of detailed record-keeping and scheduling which do not result in good effort being wasted.
I remember many, many hours put in for a report on Malaysian foreign policy and its institutional support, leading up to a meeting chaired by the Prime Minister, with specific decisions made and absolutely nothing followed up after it. That was a couple of years ago.
This kind of waste obviously is not only discouraging but also causes loss of faith in the process of cooperation in a positive Malaysia Inc. spirit.
There is thus the unavoidable need for leadership and good management. In Malaysia we want almost entirely to rely on the Prime Minister.
This results in the centralisation and personalisation we all too often complain about. What about the other ministers? What about industry leaders getting together and bringing a strong proposal forward to them? What about top civil servants engaging members of the private sector or civil society with an idea?
We cannot keep mouthing the same points about the economy or social problems – like Malaysia has great economic fundamentals or that we are a model multi-racial society – just to curry favour. It will not solve anything.
Malaysia faces many serious political, economic and social problems. We seem to be stuck with the political, which would certainly ensure we will come unstuck with the economic and social challenges. We have to address the two latter challenges as well.
The world does not wait on Malaysia sorting out its politics. Indeed the rest of us Malaysians not involved in politics must act, especially those in the private sector, to secure our country.
A strengthening of our increasingly weak sinews through really a quite modest proposal to hard-wire Malaysia Inc would be a good start.
Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE IDEAS (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB ASEAN Research Institute.