Flat Earthers Versus Bad Samaritans
To me, the differences between the two viewpoints are more apparent than real. To former Prime Minister Mahathir however, this emerging contrarian stand merely vindicates his conviction all along. And the man can speak with considerable authority.
He defied the then prevailing economic thinking – the so-called
The surprise is that Mahathir’s remarkable achievement is not more analyzed or appreciated. The 1997 economic crisis and Mahathir’s bold and contrary approaches to solving it provided one of the rare “experiments of nature” in economics.
It is interesting that with
When Mahathir did similar “rescues,” he was accused of bailing out his cronies. Nobody would dare suggest that Treasury Secretary Paulson, a former major Wall Street figure, of doing the same thing. As for the decline of the dollar, the direct consequence of lower interest rates, it is deemed acceptable to avoid recession and unemployment! Exactly what Mahathir had uttered then!
Cause Versus Effect
Unlike other economists who rely on complex econometric models and esoteric mathematics (no equations or Greek alphabets in his book!), Chang is into economic history. He studied what countries actually did, in contrast to what they now preach. He also reminds us that many economic conclusions are based on statistical correlations. Correlations are just that; they do not mean or even infer causation, nor do they differentiate between cause and effect.
Take the widely accepted notion of the poor: They are poor because they are lazy, so we are told repeatedly. This observation is of course made only by the rich, never by the poor.
Could it be, as Chang challenged us, that they are lazy because they are poor? The poor are more likely to be malnourished, unhealthy, and thus lack vigor to do hard work. Even if they are capable of hard work, because of their poverty they could not afford an education and thus their hard work is valued less. It is callous if not cruel to label those poor hardworking rice planters and fisherman in Kelantan as lazy. Try spending an hour in their day under the blazing Malaysian sun!
If we assume that they are poor because they are lazy, then we are dealing with basic human nature, very difficult to change. However if they are lazy because they are poor, then we are dealing with external conditions, and thus potentially solvable. It makes more sense to approach the problem from this perspective.
Today we are told that unfettered free trade and globalization are the recipe for economic development. We are lectured endlessly of this truism, most persuasively by Thomas Friedman of “The-World-is-Flat” fame.
Chang concluded that historically, trade liberalization has been the outcome rather than the cause of economic development. Many of today’s developed nations, in particular
Chang refers to his own
Had
As Chang wisely noted, “The secret of success is in a judicious mix of protection and open trade, with areas of protection constantly changing as new infant industries are developed and old infant industries become internationally competitive.”
Sifting Concept From Content
Trade benefits its participants; we should encourage and facilitate it. While the benefits may never be equal or perceived to be so, there is no such thing as unfair trade, only that we can make it fairer. The best way to achieve this is not to discourage trade but to increase it even more. As the participants get more sophisticated and more engaged, they are more likely to make compromises lest they would lose their now valuable relationships. Exploitative trade, like other exploitative relationships whether business or personal, rarely endures.
In the past, jute farmers in
Technology destroyed the monopoly and monopsony of the middlemen far more effectively than any rigid communist mandate. The middlemen can still make their profits but not through the ignorance of their clients but by providing better services, as it should be.
The recent electoral humiliation of Barisan Nasional would not have been possible if not for the Internet, an accoutrement of globalization. Globalization is liberating. We should not ignore globalization or discourage trade in our purist pursuit of fairness. We should instead focus more on preparing our citizens for both.
Protection maybe necessary but it is only good if you use that opportunity to enhance the competitiveness of your people and infant industries. Otherwise it would be the surest and quickest route to complacency and mediocrity. If you cannot provide indigenous competition, introduce some from outside.
Trade must be actively promoted; it does not happen spontaneously, as revealed by our trade figures with
Globalization also brings the reality of a diverse world closer to each of us. A plural society like
I see no conflict in the truth and wisdom expressed by Friedman and Chang as they both offer relevant lessons for
April 13th, 2008 at 4:45 pm
Joseph Stiglitz, a Nobel laureate, wrote a major critique of the IMF and World Bank policies in a book titled Globalization and its Discontents in 2003. It should be read in conjunction with Chang’s work cited in this post.
Dr. Musa is as usual wise in articulating his core point
“Our diversity is an asset, not a liability in this era of globalization.”
I could not agree more.
Malaysia aspires to be a developed country or state in 2020, which at last count is a mere 12 years away. A developed state means more than just “economically” advanced i.e., not merely restricted to GDP, Income growth, per capita incomes etc . The term developed country presupposes the emergence of a civil society based on constitutional government. Modern constitutional government is largely based on the protection of individual rights and to a certain extent, protection of the rights of minorities.
Dr. Mahathir was a visionary leader in many respects. As the appraisal of his legacy begins, one issue that is going to come up repeatedly is the weak institutional framework he left behind - a relatively weak constitutional framework, a sycophantic political system, a compliant MSM. and the lack of checks and balances that come with an strong independent judiciary.
Also, Dr. Mahathir was also never able to change the mindset of UMNO politicians partly because politically he had to rely on the Malay voting block to operationalize his vision. The dominant framework for most UMNO, and many other non-UMNO Malay politicians seems to be the “protection” of the rights and privileges of the Malays. Just this weekend, we were informed that a member of the Kelantan royalty advised certain non-Malay ethnic groups never to “…to seek equality and privileges.
There needs to be a fundamental change in the mindset of all politicians and their followers in order for Malaysia to reach a developed status.
In an increasingly globalized world, where trade and competition between nations is critical, where there is going to be competition to recruit individuals with education and skill sets that facilitate innovation, where achievement is more important than the color of one’s skin, religion or race, it makes little sense for Malaysian politicians (or the royalty) to focus on factors that divide Malaysians of different background when collectively our diverse population represent our greatest asset, as Dr. Bakri puts it.
The election of March 2008 provides an opportunity for all Malaysians irrespective of racial or ethnic origin to think deeply of what being
Malaysian means.
Is it more important to be divided by factors of birth that one cannot control (race, language or religion) or focus on the bigger picture: educate all Malaysians, develop human capital, foster creativity and innovation and advance to a truly developed status.
The choice we the people make now will determine what kind of country Malaysia will be in 2020.
April 13th, 2008 at 8:48 pm
Ha! hyprocrisy abound, the congressmen only see their side of the mountain and fail to see the other side.They has a fair share to blame for the excessess and without the world lending money to US by mopping up its T-bills, it will spiral into deep trouble.
Coming to Malaysia crisis, despite his other mistakes, this one Dr M was correct in implementing capital control, luck was also on our side because most of the loan debt was locally sourced and not external debt, thus we don’t have to resort to IMF option. Local debt could be negotiated internally unlike indonesia which has huge external international debt problem. For them IMF help was necessary to restructure and not an option.
In today world of scarce resources, globalization is a mean to obtain them, the polemic about fair trade and free trade was a distraction because everybody know self- interest override other concerns.
April 14th, 2008 at 7:21 am
To me, i see the advantageous side of globalization, it expand the terms of trade among trading nations and international competition drive their comparative advantage to specialise.Trading generate wealth and rising world trade figure is a positive development.
Korea route to developed status is a exception than rule, most countries with protected economy/market drift into complacency and produce distorted unproductive market economy. While Korea lauded about protectionism and deny other countries’s goods to access into its market, the irony is, it need open and free market of US and Europe to absorb their products like Kia motor,samsung electronic product, hundyai steel etc. The good point about Korea is, it has the discipline to use the protection period to achieve efficiency and competitiveness.
April 14th, 2008 at 9:24 am
You mention the World Is Flat…great book! I just summarized the book review for this and you can check it out at:
http://www.bookreviewsummaries.com
April 14th, 2008 at 2:17 pm
Dengan Izin dan Budi Bicara Tuan Punya Blog yang dikasihi,
Foto-Foto Terkini “PERHIMPUNAN RAKSASA RAKYAT DI DEWAN SULTAN SULAIMAN”, KG. BARU, KL. Tarikh:14hb. April / Masa: 8.30pm - 10.30pm (Sejarah Tercipta!)
Foto-Foto Eksklusif Hanya Daripada
theindiestory.blogspot.com
CHECK IT OUT! tq
April 14th, 2008 at 6:02 pm
Mr. Bakri,
I agree that Dr. M has been vindicated by the current economic scenario in US and the remedy applied by its government. Such similarity is actually not surprising but whether such prescription works for the American economy remains to be seen. However, as in any medication that is applied to any form of disease or sickness, there must be timeframe when such application should cease or else over dependency shall prevail. I have to exclude diabetes or other lifelong diseases/illness here as there is no cure for such illness. Overdose or over application is a delicate matter to decide. Constant monitoring has to be undertaken by the doctor/specialist in attendance or the Leader of the day. Nonetheless it has to be done.
The problem lies when the next Leader comes along. Whether he/she fully understands and appreciates the remedy remains to be seen. History has shown that the next leader tend to be someone who’s intellect is not of similar quality, more often it is the lesser.
p/s: I would like to meet you in person the next time you are back in Seremban.
April 14th, 2008 at 7:46 pm
Dr,
I enjoy many of your articles. With permission to link your blog to my blogroll.
Thanks.
April 15th, 2008 at 1:24 am
MBM, what Mahathir did during the 1997 crisis was just a throw of dice after he was refused billions dollar loan from Singapore. And if you were an economist, you would not be “wow” by his foolish move (but proven lucky subsequently but may not be so in the longer run) for Malaysia has much more bargaining chips than Indonesia to negotiate favourably with the IMF and/or Singapore.
China and Mynmmar could very well be the 2 living regimes that inspire capital controls in the mind of Mahathir by his advisers. In reality, it’s a political decision (to work in sync in rounding up Anwar) and NOT an economic decision la!
The problem with Mahathir is that he has always been psychologically impaired in negotiating with anyone who is superior to him! There is nothing wrong to go to IMF, and Korea and Thailand post-1997 have proven the point. Why Indonesia failed is because the nation has no will to put right the wrong in the eyes of the world! Has it got to do with racial and political culture? I really think so on both fronts.
MBM, honestly as a professional, would you suggest, or accept suggestion from your client, unorthodox (or rather risky unproven) treatment to be carried out by you?
April 15th, 2008 at 4:08 am
MBM, when a stuntman put himself in a harm way and spared his life, do you call him Hero? That’s Mahathir la!
And in the meanwhile LKY worked quietly without stunts to improve the lives of Singaporeans of all races and brought it to the first world status of living, do you call God?
April 15th, 2008 at 4:14 am
The thinking of Mahathir is in sync with his best friend Mugabe. For the sake of survival, they will go to the ultimate even if the nation has to be sacrificed without rationale.
April 15th, 2008 at 4:22 am
MBM, do you think Bush is bailing out his crionies? Do you think Paulson is bailing out his cronies? But don’t you think Mahathir has bailed out his son in MSIC and his cronies?
If so, what can you claim about their motivations besides the shallow statements.
April 16th, 2008 at 3:09 am
Many Eglish language blogs in Malaysia are characterized by anti Malay potshots whatever the subject. This has given rise to a new phenomenon what I call ‘mainstream blogs’ (while. in the print media we have the ‘mainstream media’). ‘Mainstream blogs’ are those that are consistently anti Malay in their content, and possibly their objective. Bakri’s is also a mainstream blog’ as evidenced by its content and the use of familiar adjectives for Malays, like ’supremacist’, ‘hegemonist’, ‘ultra nationalist’ etc. While, others (other than Malays) are simply ‘others’, without adjectives or any other pronouns. Those adjectives for Malays remind one of the writings of the colonial era, when natives were always described as ‘bandits’, ‘pirates’, ‘thugs’, ‘trouble makers’ etc.
Ramumenon provides some familiar potshots at Malays, again. He says there must be a mindset change, the target obviously is Malays. Truly there should be mindset change for ‘others’ (see, no adjectives) too. What kind of mindset change ? It is this. That there should be the primacy of the Malay language, culture, ways and concerns in the country should be natural enough, given the fact that the country is part of the bigger Malay world. This should be understood and should not be made an issue. We can get on with other things. Truly there are enough opportunities for everybody. But, of course not everybody will be fully satisfied.
There will be issues if we create them. If you say Malays are hegemonist, then you have created one issue - a hegemonistic issue. It will be much better if Malays are allowed to explain themselves rather than others explaining the Malays, and using foreign terminologies at that. It never crossed the mind of the Malay traditionalists to be ‘hegemonistic’ - they don’t even know what the term is. For the Malays it is simple, as their timeless wisdom says, “masuk kandang kambing mengembik, masuk kandang kerbau menguak” - there is nothing ‘hegemonic’ about this. Recognize the ways of the kandang. Even in the land (Italy) where the term ‘hegemony’ is born there is the timeless statement “when in Rome, do as the Romans do”. Understand the Malay culture more, just as in Italy you would need to understand the Romans more. Let us all get our mindset right. The mainstream blogs need to do much better.
April 16th, 2008 at 12:34 pm
Great post. It is the mindset that has to be changed.
April 17th, 2008 at 1:27 am
ayob, in this age of globalisation and knowledge-driven society, there is no more life for KANDANG BY SPECIE that you can flock together with your own kind and hide in the midst for your support system.
It’s you that have to change your mindset to find your suitable KANDANG BY VALUE SYSTEM before you are left out in the sun to rot la!
April 17th, 2008 at 9:01 pm
Abangcina, you obviously do not understand proverbs, more so Malay proverbs. The one I quote urges manners and propriety in social relations. Richard Winstedt too, during colonial times, did not understand Malay proverbs, but he took the huge trouble to learn about them. And, he was not a Malay or even a citizen. Manners and propriety mark the cultured mindset, that is what I am trying to say. Obviously abangcina has no appreciation for manners.
Even in globalisation, the old proverbs hold. You know the global companies and corporations have one of their cardinal operating principles as ‘observe local rules’('do not do anything against local laws’) i.e. whether countries or any groups, they are all kandangs with their ways and norms. Even the floor of the stock exchange has its rules. The modern institution that is the stock exchange is a kandang too.
It is when people has no cultured mindset that trouble and conflict occur. Because they have no manners. If we have millions like abangcina with no cultured mindset, we have a big problem. Furthermore, abangcina is like a baby who just found a ‘new’ toy, called ‘globalisation’. And, he is so excited about it that he tells everybody about it, and why everybody should love it. Let me just say, ‘globalisation’ is not new. It already began in 1491 when Columbus set out to find India. But, some people are just so excited about his new toy (not realising it is already 500 years old), and as if others have never heard about it.
Why does not abangcina go to the vernacular schools in this country and tell all those people there about his new toy ‘globalisation’ and nicely inform them that vernacular schools are out of place ( “why flock together with your own kind” and only muttering in your own language and impose a find on anyone who speaks even a word of non vernacular language).
Let us all have a cultured mindset. We will appreciate a lot of things better.
April 18th, 2008 at 4:38 am
ayob, knowledge is nothing if you don’t know how to use it. And a culture will be nothing if its value system is weak. Obviously you cannot understand the Internet culture vs yours to your own peril.
The spirit of old proverb is never evergreen like your “kandang” one. See how the American dictate its business rules “kandang” to Malaysia on FTA negotiation. On another Malay proverb, you tell me how you can apply “biar mati anak, jangan mati adat” nowadays.
Like Columbus, why don’t you make a round trip overseas and then tell the world particularly the Malaysians: GLOBALISATION is as simple as that literally!
April 23rd, 2008 at 9:01 am
Well, I’m from India and I fully agree with Ho-Joon Chang’s theory of how protectionism was used by countries to prosper, including mine.
Joseph Stiglitz said while on a trip to India, that 600 million people from India (out of the one billion!) have been left out of the “development” fold of globalization. So, obviously, all India is not going to migrate into middle class, if anything the inequality is far, far worse now, after the advent of globalization. Similarly newspaper reports have pointed out how Chinese workers are working in apalling conditions, to chhurn out the low cost products, with poor pay, cramped rooms, no accident or health insurance benefits, no job security, no overtime, long working hours - so who is actaully benefiting from this sort of globalization? Corporates ofcourse, and the few privileged people of India nd China who have been able to get educated in engineering and technology! Not the vast majority of population.
I would much rather the discourse on Globalization came from economists like Joesph Stiglitz (Nobel winner for economics and was Chief Economist at World Bank), Paul Krugman (Princeton), Pankaj Ghemawat (Harvard)etc.
Two books to read, on globalization, which offer a counterperspective to Friedman’s “The World is Flat.”
The Harvard Professor, Pankaj Ghemawat’s latest book, “Redefining Global Strategy,” is more academically inclined. I read an article of his published in the journal, “Foreign Policy”, where he argues that the world is, at best, only semi-globalized. His argument being that Cultural, Administrative, Geographic and Economic aspects of a nation come in the way of total globalization from taking place and cites examples of the same.
The other small, but interesting book, is by Aronica and Ramdoo, “The World is Flat? A Critical Analysis of Thomas Friedman’s New York Times Bestseller.” It is a small book compared to the 600 page tome by Friedman, and aimed at the common man and students alike.
“Globalization is the greatest reorganization of the world since the Industrial Revolution,” says Aronica. Aronica and Ramdoo conclude by listing over twenty action items that point the way forward, and they provide a comprehensive, yet concise, framework for understanding the critical issues of globalization.
You may want to see http://www.mkpress.com/flat
and watch http://www.mkpress.com/flatoverview.html
for an interesting counterperspective on Friedman’s
“The World is Flat”.
Also a really interesting 6 min wake-up call: Shift Happens! http://www.mkpress.com/ShiftExtreme.html
There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation
http://www.mkpress.com/extreme
http://www.mkpress.com/Extreme11minWMV.html