The Irwan Poverty Thesis challenged

October 13, 2017

The Irwan  Poverty Thesis challenged

by Susan Loone

Image result for Irwan Serigar

“We need to correct the perception. The truth is our economy is strong and will continue to be stronger under Najib’s leadership.”–Irwan Serigar. Then why the  budget cuts?

It is time to challenge Treasury Secretary-General Irwan Serigar Abdullah’s thesis that there are no reasons for Malaysians to be poor, economist Dr. Shankaran Nambiar said.

He stated that Irwan had given an important message when he suggested that the way out of poverty is through the night markets.

“At its core, in one interpretation, is the following unspoken text. Do not depend on the government – you cannot continue to depend on the government; you have to take responsibility for your own well being,” said Shankaran, Senior Fellow at the Malaysian Institute of Economic Research.

“This is a harsh world and you have to do battle for yourself. Use the market to your advantage, if you can.”

But alongside this message, one should note that Irwan, given his position, worked towards formulating the BR1M policy, reminded Shankaran, who hails from Penang.

“On the face of it, the man who had a hand in designing a system of targeted subsidies now turns his back on handouts. Why this sudden backflip?” asked the author of the book “Malaysia in Troubled Times”.

Shankaran (photo) was responding to Irwan’s suggestion that the way out of poverty is entrepreneurship. Irwan’s theory has been criticised by others like Penang Deputy Chief Minister II P Ramasamy who said his view was a “superficial understanding” of poverty.

Irwan had cited the example of migrants who have made good as petty traders in Chow Kit to illustrate how the disadvantaged can, through their own effort, seize the opportunities thrown by the market system.

If foreign workers with absolutely no endowments can secure reasonable income through sheer dint of hard work and entrepreneurship, why can’t Malaysians, was Irwan’s message, said Shankaran.

After years of fiscal imprudence, wasteful public investments, and an educational system that has not put Malaysia on the technological forefront, “the future of government support lies in doubt”, he added.

Shankaran said the flow of government revenues may not be what it was for some time to come, maybe for a long time to come. If the public debt cannot be contained or brought down, there will have to be a gradual tightening of government expenditure, he added.

Culture of dependency

In time to come, Shankaran said, subsidies will have to be cut (or more politely, rationed), government expenditure reduced, and taxes raised.

“Not that this scenario has not already made its entrance. Irwan, in a rather blunt and dramatic manner, possibly, wants to prod people out of the culture of dependency.

“Who, 20 years ago, would have imagined that Malaysia’s oldest university would have to take a 30 percent budget cut?” he asked.

“That is the direction in which we are heading, although there are good reasons why education and healthcare should be protected from crass commercial interests.”

Shankaran said there are fewer scholarships to study abroad, student loans are less generously given, and there are fewer vacancies in the public service sector to accommodate the ever-increasing number of graduates now.

He added that government institutions which thought that their responsibility was to solely focus on how to spend their allocations will now have to function differently.

“Public universities must now raise funds and in time, people must work on being job creators rather than job seekers. Many questions will have to be answered as we slide into the new state of affairs,” Shankaran said.

“At the limit, or as government largesse diminishes, how will ethnic considerations be traded off against need and social inclusion?” Shankaran said groups that have relied very heavily on government support will suffer from the withdrawal of support and subsidies.

“This can create discontent. How will the transition be managed? Will meritocracy, productivity and outcome-based processes ever matter? Will entrepreneurship be the favoured instrument to reduce inequality?” Shankaran also wanted to know will government support for entrepreneurship be open to all aspiring entrepreneurs or will it be restricted on the basis of selected criteria.

“Entrepreneurship is set to be the new game in town. At least, a new game for those accustomed to the culture of dependence.”

9 thoughts on “The Irwan Poverty Thesis challenged

  1. Immigrants by nature are the more adventurous of their lots.Adventurism is an important element of entrepreneurship.Therefore the local poor who have this spirit would either overcome their predicaments or long gone to seek greener pasture elsewhere.So to expect what is left behind of the local poor to perform just as well as the immigrants is to belief that all men are created equal which is a fallacy.We are created unequal so that we can overcome our natural selfishness by reaching out to help the weaker lots in our group.This is the spirit that is seriously lacking among us humans.

    • The local poor in Malaysia has been impoverished by the local rich, and not the adventurous immigrant poor.
      No Bangladeshi could impoverish any local Melayu. The local rich who could get one Bangladeshi worker into the nation is going to earn more in one day than 10 Bangladeshi workers could ever earn in their entire lifetime.

      Unsustainable need for glamour and glory by our local elite is the cause.
      By the way, many of us are no longer immigrants. Jho Low and 1PM are both locals. Their (great) grandfathers are immigrants. Through 1MDB, both, by a few stroke of the buttons, resulted the nation a billion more in debt.

      Please define your meaning of immigrants, in case I misunderstood your comment.

    • katasayang

      The gist of the article is the contention by Irwan Serigarar that the local poor will not remain poor if they emulate the hard working nature and entrepreneurship of the foreign migrants in Malaysia like those petty traders in Chow Kit.It has nothing to do with the exploitations of foreign workers by the rich which happen not just in Malaysia but throughout the world.What I am saying that it is in the DNA of these immigrants that they are more adventurous and thus more likely to show entrepreneurial spirit compared to the local poor and if the local poor have similar adventurism in them,they would most likely not be poor or long gone from Malaysia.

    • //Adventurism is an important element of entrepreneurship.
      Unfortunately, I would not say that being my family’s experience. Nor is it my own personal experience. Adventurism is a luxury. Survival is the reason. The same that we see for the unfortunate Rohingya who had to leave Myanmar.

  2. Irwan’s poverty Index is not even worth the time the media spent reporting it. There is a great deal of entreprenuership on the part of the Malaysian but the moment it endanger the cronies’ territory, it was snuffed out. The cost of living going up and up even the scrap metal business is being taken over by the immigrants.

  3. Irwan Serigar may be servile to his politician lord and master but he is actually a bright chap. The real problem with his intelligence is why he give his servile answer to poverty instead of asking how is it there is much need and demand for housing, banks says they are eager to lend but BNM says housing is unaffordable. Solve that question and the answer to poverty will present itself.

  4. katasayang

    I think you better concentrate on solving the madness shown by the leadership of your adopted country.On the one hand your President wants to pressure North Korea to give up by their nuclear development by dialogs and threats of military intervention and at the same time your country is threatening to renege on international agreement that you signed with Iran.Before this Libya on international pressure had given up on their nuclear weapon research and development.Instead of rewarding the Libyan regime,your country and its allies attacked it,forced a regime change and left the country in such a mess until today.I think you,Shiou and Lamoy should spend more time to heal this madness that is being inflicted on your country and let us settle our own problems,thank you.

  5. Under Irwan thesis government servants are encouraged to moonlight after office hours or even conduct private business during office hours. Only then will the Malays become rich. The immigrants are able to eke out a living doing small business and being ‘runcit’ traders at pasar malam or wet market because they dont have a job and circumstances have made them enterprenuers. Secondly they do business to survive and manage to find their niche market. They are risk takers while the Malays are reluctant to take risks and would rather sell their license or permits for a quick gain.

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