By M. Bakri Musa

Chapter 4: Modern Model States

The Relevant Lessons For Malaysia (Cont’d)

Moving on to South Korea, it is an example of what sheer determination, discipline, and an obsession with learning and education could do for a nation. When General Park took over, he whipped the nation into strict discipline and regimentation, with a single-minded purpose of economic growth and competitiveness. Being an ethnically and culturally homogeneous society, Park was able to ramrod through many changes without giving rise to sectarian dissatisfaction. In Malaysia, with its racial diversity, any political or social initiative inevitably would be analyzed into which race would benefit more and which group would lose. This invariably leads to the politics of envy and resentment. No such problems arose in South Korea.

As Korean society changed however, Park remained the same. Pursuing the army analogy, even though his initial recruits were now disciplined and accomplished officers, Park still treated them as if they were still a bunch of raw recruits. The Koreans expected greater political and personal freedom commensurate with their economic gains, but the military-backed Park and his successors still persisted with their authoritarian mindset.

The initial cohesiveness soon began to unravel when ordinary Koreans began looking on the tycoons much like they viewed their ancient warlords. Indeed these new captains of industry treated their workers much like the ancient warlords treated the peasants, with contempt and as cogs in their companies’ wheels. Thus despite its racial homogeneity, the Koreans soon developed fissures along class and social lines.

South Korea recovered from the Asian contagion rather quickly. The election of a reformist and populist-minded non-military leader, Kim Dae Jung, helped immensely. The fast recovery was also attributed to Koreans being extremely well educated and technologically savvy. Their stock of human capital was unaffected by the economic crisis.

South Korea also serves as a ready example that ethnic and cultural homogeneity does not guarantee a society from being polarized and divided. When poor, hard working workers see affluent Koreans luxuriating, these underpaid peons do not feel any reflected glory. As a consequence South Korea had tremendous difficulty implementing the measures recommended by the IMF in response to the 1997 economic crisis. Much-needed reforms were greeted with bloody street riots and ugly demonstrations. By contrast in Malaysia, despite the racial and cultural diversity of its population, similar reforms were greeted with remarkably less divisions and acrimony.

Like Malaysia, South Korea benefited immensely through its commitment to foreign trade and free enterprise. Both nations have heavy state involvement in the private sector and with it, the inevitable evils of cronyism and corruption. Thus far in Malaysia there has been no major scandals exposed comparable to the Korean variety but this is because they have yet to be uncovered. (Author’s note: This book was published in 2003. As can be seen, since then we have had far too many instances of mega financial shenanigans! MBM]

Malaysia does not lack for financial shenanigans; they just do not evoke the same public outrage as in Korea. I can name a few: the London tin scandal, the Bank Bumiputra fiasco, and Bank Negara’s foreign exchange debacle. List such scandals and Malaysians just yawn. “What else is new?” seems to be the jaded response.

Argentina, like Malaysia, guards its rich natural resources and considers foreign investments in those sectors as exploitation. This love-hate relationship with foreigners is typical of most Third World nations. They consider multinational companies as exploiters or worse, new colonizers – echoes of the dependencia mentality. Unfortunately these sentiments arise just as competition for foreign investments are heating up. There are now hosts of new nations from the break up of the former Soviet empire all eager for foreign investments. Malaysia now has to compete with the likes of Turkestan and Belarus. China is also now discovering the wonders of free market and is enticing eager foreign investors.

China is a formidable competitor for two reasons. One, the Chinese are willing to work for even less money than Malaysians. China is also using forced prison labor. Try competing with that! Two, China’s domestic market dwarfs everyone else, a major attraction to any investor.

Of the three countries, only Ireland has a tradition of democratic rule. South Korea and Argentina have seen their series of military rulers; only recently have they adopted truly free elections. Unlike Argentina and South Korea, Malaysia is fortunate in having a professional military that shows little inclination to meddle in the affairs of state.

The most obvious common element between Ireland and Korea is their serious commitment to education, which overrides everything else. The only enduring value a nation has is the quality of its people. And with greater mobility of labor and ease of migration with globalization, that advantage too could easily disappear. Note the number of talented Indians and Chinese residing outside of their native land. Both countries would rapidly leap into First World status if they could only attract their own talented nationals back home.

The examples of these three contemporary societies, together with the three from the past explored in the preceding chapter, provide useful lessons for Malaysia as it faces the challenges of globalization. The rest of this book (Part Two, Chapter Six and beyond) will examine some of the strategies that Malaysia could usefully adopt to fully benefit from globalization. Before that however, I will discuss what globalization is all about. This will be the focus of the next chapter.

Next: Chapter 5: Understanding Globalization