Only A Good Beginning

by M. Bakri Musa

Prime Minister Najib Razak’s liberalizing some segments of the service sector is a good start. However, it is merely good but not excellent, and only a beginning but not the total solution.

Najib must remember that a half-cooked meal is often not only inedible but could also poison you; likewise a half-baked solution.

For Najib to have an excellent and comprehensive solution would require him to address the more difficult underlying issue of what prompted the instituting of quotas in the first place. Unless that is resolved, his new policy will not be politically sustainable – meaning, not sustainable at all –regardless how eminently sensible it is economically. Ameliorate it and Najib would be able to liberalize not only the whole service sector but also the entire economy, if not every facet of Malaysian life. That would bring his “1Malaysia” aspiration that much closer.

On the other hand, if he fails to resolve that fundamental problem, he would have succeeded only in triggering a severe backlash among Malays, the bulk if not his only base of support. Were that to happen he would push back race relations; the half-cooked meal poisoning him!

Already we are seeing some interesting and unlikely coalition of opposing forces. The Bar Council, the self-styled champion against discrimination and a vociferous and relentless opponent of Malay “special privileges,” suddenly becomes protective of its members when the government tries to liberalize the legal profession to allow for the entry of foreign law firms.

The objective of reform is to enhance Malaysia’s competitiveness. Malaysia cannot be competitive unless Malays, who constitute the bulk of the population, are also competitive. Increase Malay competitiveness and you enhance the nation’s competitiveness.

This being Malaysia, with its “monkey see and monkey do” culture, Najib’s half-baked move will be echoed by others eager to imitate and flatter him. We already have one monkey in the person of Khir Toyo, the discredited former Mentri Besar of Selangor, now suddenly discovering “reform” religion. Rest assured that these guys are merely mouthing what is popular (or think is popular); they have no clue of the profound implications or associated difficulties.

Quotas were instituted to dismantle “the identification of race with economic activities,” to borrow the eloquent phrase of the New Economic Policy. I would have expected that after nearly 40 years, the announcement of the lifting of quotas of a small segment of the service sector would have been greeted with unbridled joy. That it was not points to potential troubles ahead. Najib ignores this at his own peril, especially considering that his hold on power is at best tenuous.

The response is not to suspend the liberalization process rather to address its opponents’ concerns. The first step involves answering the basic question of why, sans quotas, there were so few Malays in that sector. If there were but they had no sustaining power, the next line of inquiry should be to focus on why those Malays were not competitive.

Next would be to examine the failures of the current quota system. Why does it fail to nurture a class of enterprising Malays? It could be that the current policy perversely encourages the emergence of pseudo entrepreneurs and ersatz capitalists, thus oppressing the genuine variety, much like lallang to lengkuas.

Unless answers are found to these questions, we are guaranteed to muddle through yet another half-baked solution. I have yet to hear sensible discussions from our leaders on these fundamental problems.

The key to making Malays (or any group for that matter) competitive is in revamping the schools and universities, and altering the reward system so as to encourage genuine entrepreneurs and risk takers.

Revamp Our Education System

Graduates of our schools and universities have limited language abilities, abysmal quantitative skills, and are incapable of critical thinking. In short, they lack the very skills needed to survive in the marketplace.

There is only one “official” language in the marketplace, and that is the language of your customers. Those Chinese hawkers peddling their goods in the kampongs intuitively know this. That is why they speak fluent Malay.

The bulk of our customers speak English. This applies to our domestic as well as foreign markets. Hence fluency in that language is essential, especially in the service sector. This is where Malays are sorely lacking. We have erroneously and successfully indoctrinated our young, and also ourselves, that learning another language (especially English, the language of our former colonizer) equals contempt of our own.

The average non-Malay speaks three languages: their mother tongue, Malay and English. The majority of Malays however are monolingual, in Malay. This did not happen by accident; our education system deliberately created this sorry mess.

Language skill is a good beginning, but by itself is not enough. To be a successful entrepreneur one must be able to manage risks. This requires an ability to quantify it. A business plan is nothing more than a formalization of your assessments and assumptions of those risks.

A project that would be economically viable when the cost of borrowed funds is 5 percent would not be so if it were to double. Likewise, a profit margin of 1-2 percent may be generous where the turnover is fast and high as with a retail store, but not when the volume is slow. To evaluate all these would require some mathematical skills.

This does not mean one needs higher mathematics to be successful. Indeed the current meltdown of Western financial firms is attributed in part to the uncalled for faith and reliance on higher mathematics. You do however have to appreciate the difference between simple versus compound rates, or when the interests are calculated on a declining balance, or whether it is calculated weekly, monthly or annually.

In my book An Education System Worthy of Malaysia, I suggested innovations to our schools so they would produce graduates who are trilingual (Malay, English, and Arabic), have high mathematical skills and enhanced science literacy. In some instances, I suggested bringing back the old English-medium schools, especially in rural areas. Currently those kampong students are the weakest academically and least prepared for the marketplace. And they are mostly Malays.

I also suggested reforming the undergraduate years so our students would be exposed to a broad-based liberal education regardless of their ultimate career choices. These reforms in education must go in tandem with if not precede our opening up the economy lest we would return to the bad old days.

Alter Our Rewards System

After we have prepared our young rigorously through better schools, then we must align our cultural values, in particular our reward system, so as to encourage our young to be entrepreneurs.

One is our cultural attitude towards failure. In Silicon Valley, California, a bankrupt entrepreneur wears his failure as a badge of honor, as a war hero would his battle scars, and moves on. To him, failure is a learning experience. In our culture, a failed businessman is viewed with contempt. Worse, he is seen as a caricature of the collective weakness of our race, forever stereotyped and stigmatized.

We must have a healthy attitude towards failure, looking upon it not as a reflection of a mortal defect in our national character but part and parcel of the entrepreneurial process and indeed of capitalism. Hence bankruptcy courts; it is an integral part of a vibrant capitalistic society, Schumpeter’s “creative destruction” formalized.

To be sure, entrepreneurs have their own value system. To them, the success of their ventures is reward enough. Their satisfied customers are the rewards, expressed in the profits of their enterprises. What we hope to achieve by aligning our reward system would be to encourage other would-be entrepreneurs and risk takers by honoring those who have succeeded.

The remarkable observation on successful entrepreneurs in America is that no one begrudges them of their wealth. On the contrary, they are our role models. When we think of Bill Gates, we think of his many wonderful inventions to make our work more productive; his fabulous wealth is therefore well deserved.

On the other hand, when we think of Malay billionaires, we have nothing but contempt for them. It is not so much their obscenely ostentatious lifestyles that offend us, rather we could not think of any useful service or product that they have produced that had improved our lives. Their wealth comes through their rent-seeking activities, not economic creation. They are parasites sucking the life out of our economy.

In the same vein, we see similar contempt in America today for those highly compensated financiers because we cannot see the positive tangible results of their “work.” Instead we suffer through the destructions they wreck.

Peruse the list of honorees of our royal awards (focusing only on Malays), we would find that the overwhelming majority are civil servants and politicians. It is rare for Malay businessmen and entrepreneurs (those rent-seekers excepted) to be honored. As for the creative producers like artists and scientists, they are never on the list.

The honors list is one measure; examine the list of beneficiaries of our generous loan programs disbursed by MARA and other public agencies, or the allocations of import permits and company shares. Rarely are the subsidized loans given to those who have completed their apprenticeship programs so they could start their own small enterprises. None of our agricultural graduates get loans or land grants to start their farm businesses. Instead those mega millions grants and valuable state land are given the politically well connected who would then just as quickly sublease them to others for hefty fees.

If we do not revamp our education system and realign our rewards, there is real danger that liberalizing our economy would only aggravate inequities. That would bring us back to those earlier ugly days of economic activities closely identifiable with race. That would be unhealthy economically, politically and socially. We paid dearly for that in 1969; we need not repeat those grave mistakes.

  1. #1 by ktteokt on Monday, 27 April 2009 - 8:50 am

    Next thing he should do is to ABOLISH the difference between BUMIPUTRA and NON-BUMIPUTRA to achieve his objective in establishing ONE MALAYSIA!

  2. #2 by the reds on Monday, 27 April 2009 - 9:21 am

    All Malaysians shall be equally treated regardless of their race and religion! Abolish all the quotas!!! One Malaysia, one system!

  3. #3 by pulau_sibu on Monday, 27 April 2009 - 9:39 am

    A totally unrelated subject. …

    Now we are convinced that pigs should be banned because they are so dangerous. That was why Islam banned the pork because Islam does not want more people to die from diseases carried by the pork.

  4. #4 by iStupid on Monday, 27 April 2009 - 9:55 am

    Dear En. Bakri, I agree with you that language skill is very important. I don’t know how important is mathematical skill.

    It is very obvious, to the non-bumis anyway, that knowing a few languages is important, especially English. Bumiputras should by now realise that a monolingual person cannot succeed in this world.

    I am not sure about mathematical skill.

    Even if you were an utter mathematical failure in school, you already have the mathematical tool to succeed in business: The Calculator. From my own experience, in real life situations, 99.99% of them anyway, you need only to know +, -, x and /. Don’t be afraid of ‘complex’ mathematics, especially the statistical kind. There are people who can interpret them in simple, non-mathematical language. If a mathematical result cannot be explain in simple language, it is probably not worth knowing anyway.

    If you are a bumiputra businessman, use the calculator and you already have the tool to succeed, where quantitative skill is concerned. What you may lack is practice. Here is where our education system fails us miserably. Instead of teaching us the ‘higher mathematics’ like matrix to name just one, mathematics in school should teach us to handle real life situations like calculate simple and compound interests, mark up if such and such % percent profit is to be earned, and so on.

    I like your view on cultural attitude towards failure, En. Bakri.

    If I may encapsulate the failure of education systems, not just ours but all eduction systems in the world, it is that they fail to teach that human beings learn by making mistakes. So don’t be afraid to make mistakes. Making mistake is not a shame, I will go so far as to say it is the ONLY way we learn.

    A mistake is only a shame when we make the same mistake repeatedly. I would say people generally will tolerate one or even two mistakes of the same kind. By the third mistake we should be ashamed, and people will not forgive us, they will punish us, and rightfully so.

    So, bumiputra businessmen, learn the basics of your chosen business, make mistakes, you have go through that learning process. Discard the UMNO mentality of creating instant success. there is no such a thing. You must be prepared to work hard, very very hard.

  5. #5 by iStupid on Monday, 27 April 2009 - 10:03 am

    I know business people, successful ones, who don’t know mathematics beyond +, -, x and /. They probably don’t know how to divide, if they don’t have the calculator.

    They are not highly educated, in the formal sense. One thing they have is language skill, and they really can talk. And they have social skills. Social skills is a must to succeed in business, no doubt about it.

  6. #6 by All For The Road on Monday, 27 April 2009 - 10:03 am

    The quota policy, much to the detriment and anquish of non-bumiputra Malaysians, has been in practice for as long as we can remember. It is a system which obviously divides the people whether one likes it or not.

    Job opportunities and promotions in the civil service, admissions to public local universities, doing businesses and contracts with the government and the like are areas where non-bumiputras are being sidelined just because of the quota system.

    The ‘1Malaysia. People First. Performance Now.’ concept proudly expounded by PM Najib’s government should augur well for a ‘new and good’ beginning for all Malaysians irrespective of race, creed, culture or religion. We hope it is not just a shouting slogan to muster support from the common rakyat. It is time to walk the talk and not the other way round!

  7. #7 by OrangRojak on Monday, 27 April 2009 - 10:24 am

    iStupid Says: Bumiputras should by now realise that a monolingual person cannot succeed in this world.

    I am interested in your ideas and would like to subscribe to your newsletter.

  8. #8 by i_love_malaysia on Monday, 27 April 2009 - 11:49 am

    Artists and scientist are not willing to pay to be honoured!!! What for??? their albums and stature wont change just because of title!!!Unlike some businessmen who might use the title to help them in business but not many are going for the title now as it costs lots of money!!! Not worth the money spent!!!

  9. #9 by taiking on Monday, 27 April 2009 - 12:28 pm

    Wot 1malaysia? Idiots like kasim, chengho and cintanegara are already flipping like mad over it. Would they and people like them support 1malaysia? Ah ha. Maybe najib is pro-chinese eh. So that wots-soaking man is afterall pro-chinese. Possible? Possible? Removing quota first and then NEP completely later on. So oi, you chengho, cintanegara and kasim. Your hero is abandoning you people. Maybe we non-umnoputras can now embrace him as our hero and ask him to implement a new quota system in our favour; and tuck it all under the until-now-still-not-made-clear 1malaysia slogan. Tricky isnt it huh?

  10. #10 by rubini on Monday, 27 April 2009 - 4:21 pm

    Your articles clearly demonstartes that the failure to see the total cycle chain of education and enterprenership. Our leaders are still short sighted when comes to long term planning.
    Liberalisation in economic sector without understanding the core problems solves one problem but creates another one. The government still has not shaken the race mentality policies.
    The NEP is the biggest failure is largely due to manipulative policies of present day government which started 22 years ago by TDM. The major “flaw” was that ALI BABA contracters emerged which 99% subcontracting to non bumiputera to get the job done. Another flaw was the monopolisation, direct tender at the expenses of the tax payers money.The cost of goods & services escalated due to non competitive nature of business.
    Liberalisation by itself is nothing without the need to have a comprehensive overhaul of the failed policies.
    Unfortunately no one wants to admit failure. Come clean, tell all and undertake reforms.
    If Najib wants to change the future of the country especially the Malays, he needs to do more that policy changes, he needs to enact true REFORMS.

  11. #11 by ekans on Monday, 27 April 2009 - 7:05 pm

    On 27-4-2009 at 16:21.47, rubini said:

    Your articles clearly demonstartes that the failure to see the total cycle chain of education and enterprenership. Our leaders are still short sighted when comes to long term planning.

    One unsavoury outcome of this failure is the birth of the mat rempit menace…

  12. #12 by kerishamuddinitis on Monday, 27 April 2009 - 8:03 pm

    Absolutely, language skills are so very important. Wordsmithing allows you to say what you don’t mean such that everyone thinks you mean it with all your heart. ‘Children cannot be converted…’ – words, carried on the FRONT PAGE and skillfully carfted to read like what it means.

    ‘Go find your husband so that YOU can gain custody of your 1-yr old, unlawfully converted against your wishes (we will NOT lift a finger to help)…’ actions on the ground, carefully buried in some obscure column in MSM.

    Slime Ball speaks….worthless words, thwarted by little racist napoleons who understand only too well the worhtlessness of those words…

  13. #13 by sotong on Tuesday, 28 April 2009 - 8:01 am

    We have lost the education battle…….it is the direct result of decades of bad leadership.

  14. #14 by frankyapp on Tuesday, 28 April 2009 - 6:08 pm

    My dear Pulau Sibu,you are indeed a simpleton ,just like the frog living in the small round well. Basing on your reasoning,pork should be banned and you seemed to up held Islam reason banning pig and pork because it has proven that it is dangerous.If that’s the case ,how come Islam didn’t ban all automobiles/cars because these machines too have proven very dangerous and deadly too. Yeah,how about all those fire powers like guns,bombs,handheld rocket etc used by islamic suicide bombers who killed thousands of innocent lives.Did you ever call your muslim brothers to stop or ban the use of all these proven dangerous and deadly weopons ?. Please don’t be a hyprocrite.

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