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The Malay political economy - A brief historical review

Omar, Affifudin (2014) The Malay political economy - A brief historical review. In: 23rd International Conference of Historians of Asia 2014 (IAHA2014), 23 - 27 August 2014, Alor Setar, Kedah, Malaysia.

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In the early 1970’s, Malaysian second Prime Minister, Tun Abdul Razak, launched what is known as the New Economic Policy , to correct racial economic imbalances and restructuring the Malaysian society ; no economic sector would in future be identified along racial lines. One major political concern at that time, was that only a miniscule proportion, 1.4 %, of the Malaysian corporate wealth was in the hands of the Malays. Hence it was planned that by the year 1992, the Malays would control 30 % of the corporate wealth. Tun Abdul Razak’s grand plan was to initiate this growth from below, through the mobilization of capital, both financial and human capital, and the opening of new lands in response to the increasing world demand for edible oils, rubber and other food commodities.At the same time he incrementally launched an import-substitution industrialization program particularly in sectors where local raw materials like rubber and palm oil were exploited to increase values of these globally demanded commodities. The 30 % Malay equity was calculated from the strategies built into the Plan. It was not an arbitrary figure. When Tun Razak died in 1976, the Plan was slowly put aside in favour of a more robust industrialization program.The controlled pace of growth and development from below particularly through the cooperative movement, became stunted due to the lack of budgetary aid, and the plan for the empowerment of the cooperatives in the market place was replaced by the privatization policy. It was during the early 1980’s that petroleum came to the fore as a major contributor to Malaysian economic wealth.This spurned further the drive to jump headlong into infrastructures and heavy industries such as iron and steel as well as motor car and motor-cycle manufacturing. Coupled with political-economic strategy of national ownership of primary and secondary resources, the government launched efforts towards controlling the secondary and tertiary markets, which was still controlled by foreign interests in order to attain a functional market integration in its industrialization strategy.Thus a big portion of the petro-ringgit was spent towards realizing the industrialization goals, by passing parliamentary scrutinization, in what is called off-budget spending.The resultant economic growth in Malaysia from 1980’s and 1990’s was spectacular, going above 7 % per annum. However in 1992, Tun Razak’s goal of achieving 30 % of corporate equity for the Malays only managed to reach 19 % and today in the year 2014, after 43 years it only hovers around 22 %. In the meantime, the distribution of national wealth never dipped below the Gini Coefficient of 0.40 throughout this high growth period.Today in 2014, Malaysian Gini Coefficient hovers around 0.431, the highest in the Asian region.Thus the goal of eradicating poverty which is closely identified with the Malay race that Tun Razak dream of, has not been achieved despite the increased national wealth.Today this poverty is also shared by the other racial minorities of Malaysia, the Chinese and the Indians, if the Gini-Coefficient of 0.431 is to be taken as the indicator.This paradox of the masses being poor in a universe of increasing national wealth can be traced to centuries of the Malay world’s history of how wealth administration and management favoured a few, while marginalizing the majority. This paper attempts to show that during periods of immense increase in national wealth, Malay rulers throughout history became too engrossed with nonproductive activities and living leisurely and enjoying hedonistic lives;to enable this they farmed out to selected individuals, particularly foreigners, the back-breaking job of management and administration of the economies. Concessions were freely distributed to foreigners, thus marginalizing many of the local elites as well as the masses, resulting in mass poverty, banditries and piracies.It was during the economic booms of the Srivijaya, and to large extent the Majapahit and Malacca empires that piracies proliferated.And it was also during these booms that the empires fell. The Malays, including their elites, joined the ever lurking Chinese(Hakka) and Viet pirates who once monopolised the piratical profession in the South China Sea.This paper examines the paradox of national wealth that triggered the downfall of regimes in the Malay world as a whole. The thesis that Malay bureaucracy’s decadence being really a major factor in Malay political and economic demise, constitute the central dimension of this analysis.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISBN 978-967-0474-76-2 Organized by: Universiti Utara Malaysia and Malaysian Historical Society (Persatuan Sejarah Malaysia).
Subjects: D History General and Old World > DS Asia
Divisions: School of International Studies
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 10 Jun 2015 13:12
Last Modified: 06 Dec 2016 07:35

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