Archive for category Bakri Musa
NEP’s Failure to Nurture Malay Entrepreneurs
Posted by Kit in Bakri Musa, NEP on Monday, 2 January 2012
by Bakri Musa
Chapter 11 : Embracing Free Enterprise
Encouraging Entrepreneurialism
As a long distance observer, let me suggest some reasons for NEP’s failure in this endeavor.
They all boil down to that basic defect of too much central planning and too rigid top-down command. Instead of trying to create an environment where budding Bumiputra entrepreneurs could thrive, the government went much further to actually select which individual Bumiputras would thrive and succeed.
These central planners presume to know the traits of a successful would-be businessman. That these planners—politicians and bureaucrats—have no experience in starting or running a business is conveniently ignored. Such hubris!
No surprise then that the pseudo entrepreneurs that the system produced were more adept in cashing in their close association with the politically powerful rather than being true creators and builders of wealth. They in turn perpetuated that same system in choosing their own set of suppliers, subcontractors, and vendors. Thus was born a class of Bumiputra entrepreneurs and businessmen more skillful at commercializing their political ties rather than being true wealth creators; a class of rent seekers and economic parasites rather than of genuine entrepreneurs. Read the rest of this entry »
Encouraging Entrepreneurialism
Posted by Kit in Bakri Musa, Good Governance on Wednesday, 28 December 2011
by Bakri Musa
Chapter 11: Embracing Free Enterpriseby
Encouraging Entrepreneurialism
A decade ago there was not much interest in teaching entrepreneurialism at business schools as the perceived wisdom was that it could not be taught. Today it is a hot elective for young MBAs. Many top line business schools trumpet their entrepreneurial studies program. It is not accidental that most graduates of American universities aspire to work for the private sector or start their own businesses. Their models are their professors starting new ventures or becoming consultants to industry. In my graduating class, only a few considered a job with the government. The vast majority opted for starting their own medical practices. In contrast, in Malaysia most graduates, especially Malays, look to the government for employment.
The culture and the social environment can do much to foster entrepreneurialism, especially the attitude towards failure and risk taking, as well as the reward system.
The stance towards failure is particularly instructive. As Scott McNealy of Sun Microsystems observes, if you do not have failures, you do not have winners. And if you do not have winners, you do not have a market economy. Part of what makes America great is that there is little stigma attached to failures. The recent Dot.com crash may have dampened but did not destroy the Silicon Valley spirit. Granted, million-dollar homes were not selling fast and there were fewer sleek Porches on the streets of Palo Alto, but the area is still bustling with entrepreneurial activities.
For Malays, the trauma of failure is a double burden. In addition to the deep personal disappointment, they would now be portrayed as yet another example of the inadequacies of their race. This is a major psychological load. Unfortunately the government and specifically Malay leaders, by continually harping and criticizing on the failures of Malays, only aggravates the problem. Read the rest of this entry »
Encouraging Entrepreneurialism
Posted by Kit in Bakri Musa on Monday, 19 December 2011
by Bakri Musa
Chapter 11: Embracing Free Enterprise
The catalyst that drives, or more accurately the spark that ignites, capitalism is the entrepreneur. She is the individual who sees the opportunity to sell an item or service at a price higher than the cost of making or obtaining it. She sees the need or demand, and then goes about to meeting that need, and in the process makes a profit for herself. Entrepreneurs are, in the words of the MIT economist Lester Thurow, “…the change agents of capitalism.”
It is at this point that the religious types sense an argument against capitalism. Their argument is simply this: capitalism feeds on the individual’s motivation to make a profit, to get rich. My rebuttal is equally simple. The entrepreneur provides a much-needed service or product where none exists before. If that product or service is not needed, then his enterprise will fold soon enough. As for the personal greed motive, it is worthwhile to note that every successful entrepreneur ignites a chain of events that brings benefit to countless others. Ray Kroc who founded McDonalds restaurants with the simple premise that consumers need a reliable place to get consistently tasty and affordable meals, started a chain of process that helps ranchers and butchers (source of meat), potato growers (the chips), and countless youngsters with their first job. This is separate from the great services it provides consumers.
As for the personal greed argument, it is well to remember McDonalds create more Black millionaires in America than the all the professional sports leagues combined. Similarly when Bill Gates created that software operating system, he also provided opportunities for thousands of other software engineers to write applications for his Windows program. Of course Ray Kroc and Bill Gates became fabulously rich, but they were not alone; they brought along countless others. Equally important and bears repeating, they provided much-needed services, products, and most importantly, jobs. The value of the benefits to society they created with their services and inventions far outweigh the wealth and rewards that they get. That is the beauty and genius of free enterprise. Read the rest of this entry »
Malaysia in the Era of Globalization #92
Posted by Kit in Bakri Musa, globalisation on Monday, 12 December 2011
Chapter11: Embracing Free Enterprise
Malaysian Capitalism
Moral Arguments For Free Trade
Daniel Griswold of the conservative Cato Institute in Washington, DC, argues that free trade is morally right, quite apart from the benefits that accrue upon the participants. Free trade respects individual dignity and sovereignty. When one engages in honest work, one has the basic right to enjoy the fruits of one’s labor. No authority has the power to forbid someone from exchanging the fruits of that labor with something else produced by another person, whether that person is in the next village or across the globe. Ibn Khaldun first expressed these views in the 14th Century. Protectionism is just another form of stealing; taking from one group of people (consumers) and giving the spoils to another (usually domestic producers and others who are politically powerful).
Free trade also encourages individuals to cultivate moral virtues. To be successful in trade, one must be reliable and provide the goods and services that are needed and at a price that is affordable. Rewards go to those who are trustworthy, reliable, and deliver on their promises. These are the same qualities that are regarded as virtues in any religion. For Muslims, it is instructive that Muhammad (pbuh) was a trustworthy merchant who brought great profits to his employer before he received his prophethood.
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Malaysian Capitalism
Posted by Kit in Bakri Musa on Monday, 5 December 2011
By Bakri Musa
Chapter11: Embracing Free Enterprise
In the decade following independence, the Tunku’s administration adopted a laissez-faire attitude towards the economy. He was committed to free enterprise and capitalism, but he wrongly read the Malaysian economy and marketplace. They were neither open nor free. Powerful forces effectively controlled the economy and marketplace. The first were the large and entrenched foreign-owned corporations (usually British) that essentially corralled the major sectors (the “commanding heights”), from plantations and mining to manufacturing and banking. Through their sheer size and well-established network, these companies ensured that their dominance was never threatened. They neither welcomed nor tolerated new entrants and competitors. The second group was made up of ethnic Chinese and Indian “mom and pop” retailers and sundry merchants. Their enterprises were small family affairs. They too protected their economic turf ferociously. They effectively controlled their domain through their clan organizations, often using extralegal means to enforce their code. The “triad” organizations of secret societies are manifestations of this phenomenon.
Between the ethnic retailers and the major colonial corporations, the economy of Malaysia was essentially “locked up.” They imposed stiff and insurmountable barriers to new entrants. In short, despite the government’s commitment to a free market, the economy was far from being free. The game was rigged. Had there been enterprising and competent Malays, they would have been effectively shut out. Even a super entrepreneur like Ted Turner or someone with a Harvard MBA would have a tough time cracking in an honest way such a closed and rigged system. Read the rest of this entry »
Free Enterprise As An Islamic Tradition
Posted by Kit in Bakri Musa on Monday, 28 November 2011
Malaysia in the Era of Globalization #90
Chapter11: Embracing Free Enterprise
Free Enterprise As An Islamic Tradition
By Bakri Musa
There are those who believe that capitalism implies greed, the very antithesis of our core religious value. Nothing can be further from the truth. This misguided notion led many nations to adopt socialism, with its promised egalitarianism.
The Koran explicitly encourages free market. It commands the faithful to venture into the marketplace and earn a livelihood: “When the prayer is finished, then disperse ye through the land and seek the bounty of Allah.” (Surah Al-Jumu’a, 62:10). Earning a lawful livelihood is a duty second only in importance to that of prayer, preached our prophet (pbuh).
In Islam it is better to give than to receive a wage; that is, better be an employer than employee. A businessperson enjoys an exalted position in Islam. Contemplate this hadith: “In the Day of Judgment, the honest, truthful Muslim merchant will rank with the martyrs of the faith; the trustworthy merchant will sit in the shadow of the throne of God on Judgment Day.”
Ibn Khaldun wrote in his Muqadimmah, “Commerce means the attempt to make a profit by increasing capital, through buying goods at a lower price and selling them at a higher price…This may be realized by storing goods and holding them until the market has fluctuated from low to high price…or by transporting goods to another country where they are more in demand.” Read the rest of this entry »
Malaysia in the Era of Globalization #89
Posted by Kit in Bakri Musa, globalisation on Monday, 21 November 2011
Chapter11: Embracing Free Enterprise
Let there be amongst you traffic and trade by mutual goodwill.
—Surah An-Nisaa (The Women) (4:29)
When you are lost, goes an old Malay saying, revert to the source. That seems to be Malaysia’s new economic strategy following the Asian economic crisis of 1997. Buffeted by the turmoil of globalization and open markets, Malaysians yearn for the simpler days of fixed exchange rates and controlled commerce. Some even suggest regressing to the old days of bartering! But as in the jungle, the path back is often overgrown, and one could just as easily get lost in retreating. Malaysia is better off preparing for the new realities of open markets and globalization, instead of retreating to some imagined good old days of yore.
With the collapse of communism free enterprise remains the only viable economic system. It is successful because it has proven to bring the greatest prosperity to the largest number of people. Many have sought a “third way,” a mid course or a bridging between free enterprise and state planning. Alas, there is no such alternative.
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Malaysia in the Era of Globalization #88
Posted by Kit in Bakri Musa, Judiciary on Monday, 14 November 2011
Chapter 10: Freedom, Justice, and the Law
The Judiciary: Justice in Jeopardy
Not only must there be respect for the rule of law, but the laws themselves must be just. Those administering the law too must be just and be seen to be just.
The Malaysian judiciary began on a very high note with judges held in the highest esteem. Tun Suffian set the tone not only with his exemplary personal example but also the depth of his legal judgment and scholarly analysis. The low point of the Malaysian judiciary occurred when the King, acting on the advice of the prime minister, suspended the chief justice and a few of his associates. Sadly from there the judiciary seemed to breach new lows every so often. A retiring senior appellate judge recently publicly confessed his shame for having been a member of that august body. He bluntly blurted about Malaysian litigants being confident of winning even “hopeless cases” as long as they were filed in “certain courts.” A more damaging indictment would be hard to find.
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Malaysians Abroad Should Not Vote
Posted by Kit in Bakri Musa, Elections on Monday, 7 November 2011
by M. Bakri Musa
Malaysians abroad are misguided and plain wrong in agitating for exercising their right to vote in Malaysian elections.
I can the see the validity for students, diplomats and others on temporary assignment abroad demanding such rights, but then they already have them. For others, especially those who have acquired permanent resident status elsewhere, their clamor for retaining their right to vote in Malaysian elections is misplaced for at least three major reasons.
The first and most important is that since they do not live in Malaysia, they would not have to bear the burden of the consequences of their voting decision. Second, those Malaysians are essentially seeking representation without taxation; that is presumptuous. Third, since they had sought permanent residency status abroad, their focus should now be to prove to their new host country that they are deserving of such a status. Meaning, they should focus their attention, indeed loyalty, to their new adopted land. Read the rest of this entry »
Malaysia in the Era of Globalization #87
Posted by Kit in Bakri Musa, ISA on Monday, 31 October 2011
Chapter 10: Freedom, Justice, and the Law
Personal Liberty in Malaysia –
Chilling Effects of Repressive Laws like ISA
An editor of a Malaysian professional publication invited me to be its regular contributor. I readily agreed, and aware of the local psyche and ambiance, purposely submitted a rather bland first piece. He readily published it but chided me for being too cautious as Malaysia “has changed” since I left the country. Encouraged, my next piece was more critical, and sure enough, his earlier encouragement notwithstanding, he sheepishly told me that his board had vetoed my submission! Thus ended my brief career as a columnist for that outfit! I later submitted the same piece to a mainstream paper (owned by the ruling party) and much to my surprise, it was published unchanged. I later sent the editor of the first publication the published copy; he felt rather small. The truth was, the mainstream paper had a new editor and I decided to test his professionalism and independence.
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Malaysia in the Era of Globalization #86
Posted by Kit in Bakri Musa, globalisation, ISA on Tuesday, 25 October 2011
By M. Bakri Musa | October 23rd, 2011
Chapter 10: Freedom, Justice, and the Law
Personal Liberty in Malaysia – The Abomination That is the ISA
To me the ISA is an abomination. If indeed the Act is for the protection of society, as its supporters suggest, then it has failed miserably. ISA did not prevent the May 1969 tragedy, the 1984 Memali massacre, or more recently, the equally deadly Kampong Medan melee. Surprisingly, the government chose not to use this powerful statute to arrest members of the Al Maunah group involved in the deadly arms heist in 2000 of the army camp in Grik, Perak. Instead the state charged them with waging war against the King. Surely such a crime is the ultimate threat to peace. If there is one situation where the ISA would have been appropriate, this is it. But the government opted for an open trial where its evidence was subjected to cross-examination and public display. There was no indication that the nation’s security and safety were compromised by the subsequent open trial.
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Adopt Zakat, Not Hudud
Posted by Kit in Bakri Musa, Islam on Monday, 10 October 2011
Malay politicians fall all over themselves in advocating hudud, the Islamic penal laws. That is less an expression of their commitment to Islam, more blatant pandering to Muslim voters.
If these leaders are truly committed to advancing the cause of Islam, there is a more productive strategy: make zakat mandatory. Being one of the pillars of our faith, zakat is more defining of Islam. It is even ahead of performing the Hajj. Adopting zakat would bring the country closer to an Islamic state symbolically and operationally, certainly much more so than implementing hudud.
Creatively managed, zakat could be a formidable force for economic and social development; it would also highlight what is right about Islam. Currently in Malaysia and in many Muslim countries, mobilizing zakat remains only a potential. As the Halal Journal noted, “…[I]n the context of the Malaysian economy, zakat has not played a significant role ….” There is also a dearth of economic research on zakat. The recently convened United Malay Economic Action Council, presumably comprising luminaries in commerce and economics, has not even explored the issue.
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Malaysia in the Era of Globalization #84
Posted by Kit in Bakri Musa on Monday, 3 October 2011
By M. Bakri Musa
Chapter 10: Freedom, Justice, and the Law
Society and Individuals
Society and individual may be the two sides of the same coin; nonetheless our attitude or more importantly the attitude of those in power as to which side to be viewed first, involves more than just a simple toss of the coin. The difference between a totalitarian state versus a civil one is that with the former, the individual serves the state; in a civilized society, the state is there for the citizens. This seminal distinction makes all the difference.
The purported supremacy of Asian values that place a premium on societal goals over the dignity of the individual is in reality at best nothing more than a benign manifestation of authoritarian tendencies. It is no surprise that such societies are prone to militaristic and dictatorial tendencies, as demonstrated by Communist China and the Japan of World War II.
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Malaysia in the Era of Globalization #83
Posted by Kit in Bakri Musa, globalisation on Monday, 26 September 2011
By M. Bakri Musa
Chapter 10: Freedom, Justice, and the Law
No person is perfect enough to be entrusted with the liberty and dignity of others.
—Mahmoud Mohamed Taha (1909-1985)
Sudanese Reformist, executed by his country’s military rulers.
I was visiting Malaysia after being away for many years. It was right after the race riot of 1969. The streets were still deserted, and I was driving with my father when we came upon a stop sign at an intersection. I duly stopped, looked around, and finding no oncoming traffic, proceeded.
My father asked why I stopped, and I responded that there was a stop sign. Startled by the unexpected question, I looked back to find him in a pensive mood, his face tilted, and his eyes looking far into the distance. After a long pause, he matter-of-factly murmured, “That is why the West is so advanced. People there obey the law even when no one is watching!”
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A Whiff of His Father’s Leadership
Posted by Kit in Bakri Musa, ISA, Najib Razak on Monday, 19 September 2011
by M. Bakri Musa
In announcing the repeal of the Internal Security Act and other repressive laws, Prime Minister Najib Razak secures for himself an enshrined spot in Malaysian history.
Of the many thoughtful comments on Najib’s historic announcement, the one that struck at the heart of the issue was that by former Mufti of Perlis, Dr. Asri Zainul Abidin. He declared, “The ISA is an un-Islamic law. It infringes [upon] individual rights and can be easily misused by leaders, so repealing it was a very Islamic move.” Amen!
“Najib’s announcement,” Asri continued, “is more valuable than any bonus payment or salary increase because repealing the ISA means the restoration of human rights … which is more valuable than money.” That is putting things in their proper perspective.
I disagree however, with the Mufti’s characterization of Najib’s move as a “gift” to the people. When someone robs you of something and then returns it, that is no gift, merely restoring what is rightly yours. The ISA and other restrictive laws rob us of our precious possession, our freedom. That is Allah’s gift to us, as enshrined in the Koran. It is not for mere mortals, no matter how exalted their earthly positions, to tamper.
Nonetheless I do hear the Mufti. Good Muslims ought to be grateful for their blessings, however small. I want to be a good Muslim, and Najib’s announcement is a huge blessing, so I am very grateful. Alham dulillah! Praise be to Allah! Read the rest of this entry »
Malaysia in the Era of Globalization #82
Posted by Kit in Bakri Musa, globalisation, Islam on Monday, 12 September 2011
Chapter 9: Islam in Malay Life
Reform in Islam
Educating Ulamas on Modern Economics
By educating Muslims generally and the ulama in particular on such modern and useful concepts of economics, and replacing such loaded terms as interest and insurance with the morally neutral terms as rewards on savings and risk sharing, we would channel the natural propensity for Malays to save even more. This in turn would encourage other productivity-enhancing economic activities.
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Malaysia in the Era of Globalization #81
Posted by Kit in Bakri Musa, globalisation on Monday, 5 September 2011
Chapter 9: Islam in Malay Life
Reform in Islam
Islamic Financial Intermediaries (Cont’d)
IFIs thrived in the first few centuries of Islam not because those early Islamic thinkers had found a magic way to dispense with the cost of funds and returns on investments, rather they used different terms (or more crudely said, put a different spin on the issue) to circumvent interests payments and earnings.
The modern version of Islamic banks was resurrected only in the last few decades. Despite its recent rebirth, its popularity has soared both in Islamic and non-Islamic countries. This recent history should serve as a ready caution. The system has not been tested. The system of auditing, accounting, and regulating has not been standardized. What I fear most is that should Islamic banks fail in an economic crisis, it would not only aggravate the situation but also set back people’s trust in them. That in turn would severely shake Muslim’s trust in their religion.
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Islamic Financial Intermediaries
Posted by Kit in Bakri Musa on Monday, 29 August 2011
by Bakri Musa
Malaysia in the Era of Globalization #80
Reform in Islam
Chapter 9: Islam in Malay Life
Trade had been flourishing for centuries in Arabia, immediately before and after the prophet’s time. All that buying and selling, together with the caravan expeditions, could not have taken place without there being a satisfactory financing mechanism. There must had been a system for connecting the owners of money (savers) and the users of cash (investors and traders). Yet despite that flourishing head start and seemingly workable system, Islamic finance later went into decline. It is instructive that the decline in Islamic economics parallels the decline in Islamic civilization.
Today Western financial institutions are preeminent. Western banks and other financial intermediaries did not develop overnight. They have been refined, modified, and strengthened over the centuries. The process continues to this day. Today’s banks are a far cry from what they were a century earlier. The essential ingredient to the success of banks is the faith people have in them. Absent that, not even the strongest institution could survive. All the regulations and innovations in banking serve only one purpose: to strengthen that faith and confidence.
Bank failures and runs on banks were common in America during the depression. Those events are thankfully rare today, in part due to the diligence of the Federal Reserve System and the Federal Depositors Insurance Corporation (FDIC), the regulatory agencies of the federal government, together with strengthened prudential rules on reserves, heightened fiduciary responsibilities, and improved auditing. These refinements have been incremental, each in response to specific problems and crises. Banks still fail today, but thanks to the FDIC, depositors (at least the retail consumers) simply transfer their accounts to another bank without any hitch. The system is by no means perfect, as was painfully demonstrated by the massive Savings and Loans scandal of the 1980s. Read the rest of this entry »
Religious Obstacles To Malay Economic Development
Posted by Kit in Bakri Musa, Islam on Thursday, 25 August 2011
By M. Bakri Musa
Ramadan is a month for reflection. As we reflect we cannot avoid the depressing reality that the Muslim world is overrepresented in all categories of underdevelopment. The pat and often cited reason is the inherent incompatibility of Islam to modern development. When such an explanation is offered by non-Muslims, they can barely conceal their smugness. When asserted by a Muslim, he or she would immediately be dismissed as not fully comprehending the faith, or worse, condemned as an apostate.
Such an “explanation,” its certitude not withstanding, is about as useful as someone telling you, when asked why he is in the hospital, “I am sick.” And if you are still not convinced or betray any doubts, would quickly add, “Very sick!” Not very helpful! If however, the answer were to be, “My bowels are not working,” or, “I have difficulty breathing,” we would then be that much closer to identifying the problem, and thus its remedy.
This Islam-is-the-problem explanation does not even describe the symptom, much less the disease. If indeed there is something inherently deficient with Islam, it still would not explain why the faith thrived during its first four centuries, or why its adherents are increasing and becoming more devout today. And if Islamic practices are deficient, then what and where exactly are those deficiencies so we could address them.
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Malaysia in the Era of Globalization #79
Posted by Kit in Bakri Musa, globalisation, Islam on Monday, 22 August 2011
Chapter 9: Islam in Malay Life
Reform in Islam
Islamic Economics
Dealing With the Concept of Interest
As alluded to earlier, the biggest stumbling block to Islamic economics is the concept of interest. Stripped of its complexities, the issue can be simply reduced thus. When B borrows money ($X) from A, there is a cost involved. Regardless of the terminology, someone has to bear that cost. If at the end of the year B returns to A the same amount of money he borrowed the year earlier, that is $X, he claims to have satisfied the Koranic admonition that he repays his loan at its original amount, nothing more and nothing less. But has B done that?
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