MALAYSIA Tanah Tumpah Darahku


Monday, October 31, 2011

Racism and bias drive Mahathir’s ‘Look East’ policy, not economic reality

Racism and bias drive Mahathir’s ‘Look East’ policy, not economic reality

Former Malaysian Prime Minister Mahathir Mohamad has trotted out the simplistic notion that his long-discredited “Look East” Policy, obviously in its original form, is the best way forward for the country to cope with “the anticipated uncertain economic times ahead”.

Malaysian-born Chinese and Indians would be naive if they think Mahathir's "Look East" would include without question the booming economies of China and India - if his original plan is anything to go by. It was Japan that Mahathir targeted in the 80s in his misguided 'vision' to nullify the Chinese role in the Malaysian economy by repleacing them with the Japanese.

Mahathir equals Japan with success and the West with failed models, clearly in a reference to the debt crisis plaguing European economies and the burgeoning national debt burden of the United States.

Singapore pushes ahead due to wiser policies

But he should look at Singapore, south of the causeway and paced by his nemesis Lee Kuan Yew, which by 2010 had a economy larger than Malaysia’s by US$5 billion – US$ 210 billion v US$ 205 billion -- and has a national debt burden equivalent to 98 per cent of its Gross Domestic Product.

Unlike Malaysia however, Singapore puts its borrowings to good use and maintains a high level of national reserves and investments in the form of Sovereign Funds invested worldwide. Not only did it court Japan, but also India and China, where most of its trade now comes from.

Malaysia is more into splurging its borrowings and revenues on the politics of patronage through the dishing out of government projects to a favoured few at grossly inflated prices i.e. at least double to triple what it should actually cost the tax-payer.

No western economy – the failed models referred to by Mahathir – allows this kind of outright pillage of the National Treasury to take place in broad daylight. They do not dip either into Pension Funds to fund even more hare-brained schemes dreamed up by the fat cats and their political masters.

The bakery test

Mahathir’s gushing admiration of the Japanese is grossly misplaced.

Obviously, he still hopes that the Japanese will play a greater role in Malaysia’s economy, to the detriment of the Chinese, and to the benefit of the Umno elite. More on that shortly!

So far, Mahathir has only been able to persuade a Japanese baker to team up with him in a venture called The Loaf. It was failing at the beginning and now while it can pack in hungry shoppers and tourists, the improvement took off only after it offered 50% discounts and other promotional items. The complaint is that the breads and pastry products turned out are too expensive but Mahathir plods on nevertheless.

The thing is, if Mahathir can’t run even a simple bakery, no one should take his various pronouncements on the economy too seriously. He’s too proud to admit that he was been wrong, get rid of his Japanese partner, and bring in a local Chinese or Indian or East Malaysian one.

But is the Japanese economy doing so well?

Suffice it to say that Japan Incorporated is a creation of US General Douglas McArthur after the Japanese surrendered unconditionally to the Americans to end World War II in Asia and the Pacific. The so-called Japanese Miracle was purely due to America opening its market to that country. The reverse was the reason why Japan bombed Pearl Harbour in Hawaii on 7th Dec 1941 to spark off World War II in Asia and the Pacific.

Ever since the end of World War II, until the recent emergence of China, both Japan and the US have been like two drunk men, clinging on to each other, lest one of them fall into the nearest ditch. In the end, it was Japan which fell into the ditch over the undervalued Yen vis-a-vis the US dollar, the burgeoning Japanese reserves of US dollars which were promptly invested in US Treasury Bills and the trade imbalance between the two countries in favour of the former.

Japan went into a 15-year long deflation and had just come out of it when it went into yet another deflationary period in the wake of the local bad debts ridden banking industry.

Now, no one is sure where the Japanese economy stands except for its inroads into the Chinese economy to reduce its dependency on the US market. This is the failing economic model that Mahathir wants Malaysia to emulate.

Sidelined by China because of his racist agenda

China has since replaced Japan in the US market. The country is plagued by the same problems that Japan faced with Washington i.e. an undervalued Yuan vis-a-vis the US dollar, the burgeoning Chinese reserves of US dollars which are promptly being invested in US Treasury Bills and growing trade imbalance between the two countries in favour of the former.

China and the US today are like two drunken men, clinging on to each other, fearful lest one of them fall into the nearest ditch. Deja Vu!

Tiny Singapore meanwhile replaced China last year as Malaysia biggest trading partner. This factor, more than anything else, indicates just how far Malaysia has fallen out of favour in the Chinese market.

By right, Malaysia should be tapping into both the Indian and Chinese markets. That’s where all the economic action can be found, and to a lesser extent in Brazil, Russia, Mexico, South Africa, Eastern Europe and the Gulf Co-operation Countries.

Offered to let the Japanese replace the Chinese in Malaysia

Few know that the Look East Policy, as it was implemented, was a Japanese variation of Mahathir’s original hare-brained scheme. Insider accounts suggest that the racist ex-Prime Minister, in his version, had the nerve to suggest to Japan that he was willing to allow its citizens to migrate to Malaysia in droves to replace the Chinese role in the economy.

He also acted unilaterally and decreed that Japan’s horrible World War II record in Malaysia should be omitted mention in local school textbooks.

In return, he wanted the Japanese to bring his “Malays” (read Umno elite and selected warlords) into their businesses as genuine partners. The Chinese were not willing to do this, he complained to the Japanese.

The Japanese were shocked and would have none of Mahathir’s sick schemes to reduce the Chinese business community in Malaysia to irrelevance.

Instead, Tokyo was willing to give scholarships to Mahathir’s “Malays” and train them in various skills. Japan was also willing to send Japanese instructors over to Malaysia to teach at various technical schools in the country and help set up new ones.

Japanese gave him back his own medicine

In order to soften the blow, the Japanese came up with a hare-brained scheme of their own to feed Mahathir’s bloated ego viz. the Proton Saga as the National Car “to prove that his kind can be world-beaters”.

The engineering drawings of a Mitsubishi Lancer model which failed in the Singapore and Malaysian markets were quickly dusted and recycled to Malaysia for an undisclosed, but reportedly steep, sum. The Japanese, along with the engineering drawings, sold Malaysia some old jigs as new ones to turn out the Proton Saga. This was to add insult to injury.

Proton, even since its inception in the 1980s, has been the bane of the Malaysian motoring public, thanks to Mahathir and the Japanese.

Every Proton model since the very first one has been a cosmetic variation of the first since the company lacks the resources to come up with new engines. Ten years ago, Proton itself estimated that it would cost at least RM 500 million to develop a new engine. The amount can only be recouped after three years in the market. By that time, a brand new model would have to be introduced to the market. Besides, any sales less than one million units a year for a particular model was not a viable proposition.

Taxpayers pay the price of Dr M's racism

Malaysians and Petronas continue to subsidize Proton cars in keeping with the Look East Policy but not before Mitsubishi was unceremoniously given the boot.

It’s unlikely that Prime Minister Najib Abdul Razak would ever consider giving Mahathir’s Look East Policy even a cursory glance. This is a policy which has not only failed spectacularly but alienated Malaysia from the west and kept the country in the economic doldrums and the backwaters.

The Japanese do not have two horns on their heads and will have nothing to do with any racist Hidden Agenda – read the Look East Policy -- against the Chinese business community in Malaysia.

Malaysia Chronicle

No comments:

Post a Comment