by Jacob Nelson
The Ottoman conquest of Constantinople was one of the major turning points of the past 500 years.
It resulted in the rise of Western Europe as a major civilisation in these past few centuries.
But Asians, Africans and South Americans are not lesser humans. It’s just that they suffered major setbacks due to centuries of looting, exploitation and slavery under colonisation.
One reason for the vulnerability of Africa was that it had a history of exploiting each other; the practice of slavery had already existed among Africans. Sometimes coastal Africans captured people in the interior and sold them to north Africans.
Let’s not focus on ethnicity or race. That focus separates us. This separation is used by those who want to take advantage of us. After six decades of independence, our political systems should be independent of race.
But they are not – and that is a sign of immature politics. This makes us vulnerable to exploitation by certain predatory foreigners and domestic parties. An overemphasis on identification by ethnicity will make us vulnerable to those who wish to exploit us.
We’ve lived together for so long. For example, the Malaysian tradition of holding open houses during diverse religious celebrations is charming: it highlights religious and cultural tolerance and, over time, acceptance.
European domination of much of the world was an accident of history. There is nothing inherently superior about the Europeans or any other ethnic group. Get over the notion that one ethnic group is better than another. We Asians are as capable and worthy as anybody else.
Malaysia has a fairly decent education system. As a result, we have an educated workforce. But, at many levels, there is room for improvement. If we aim to join the ranks of the advanced economies, we must improve.
Pisa tests, run by the Organisation for Economic Co-operation and Development, show that 15-year-olds in Malaysia perform well below OECD average scores in maths, reading and science. This does not bode well for having a globally competitive workforce in 10 to 15 years.
Improve ties with China
After 500 years of European domination, the global economy seems to be changing in major ways. China has made so much progress in recent decades it has become a major world power.
There is a common Western narrative that China is a bad actor. I don’t buy that. On some measures, the Chinese Communist Party has been extremely successful in recent decades.
For example, China has lifted more people out of poverty than any other government in history. Now, China has world-class infrastructure, and it has built more miles of high-speed trains than any other country.
China has emerged from its “century of humiliation” and is currently the leading trading nation in the world.
I am convinced that a Sino-sphere is being built in East Asia. China’s sustained and rapid growth now influences the entire region.
During the decades of China’s rapid growth, Malaysia benefited too, recording decent growth – in part because we could export to China. After Singapore, China is Malaysia’s leading trade partner.
Malaysia (and Singapore) benefited from having a sizeable population that could speak Mandarin and other Chinese dialects. This is one of our core strengths.
Clearly, the importance of the US and Europe in global trade and influence is shrinking. It is in our own self-interest to improve our relations and strengthen trade ties with a rising China.
Recall Dr Mahathir Mohamad’s “Look East” policy. When this was rolled out, Japan was the undisputed leader in Asia.
How did Japan become an advanced economy? In his book Upheaval, American geographer and historian Jared Diamond highlights how nations must learn to cope with crises and change.
Diamond describes Japan’s response to Commodore Matthew Perry’s tall black US Navy ships sailing into Tokyo harbour in 1853. In Japan, the consensus strategy was to appease the foreigners to buy time to upgrade Japan technologically. They were conscientious about this, and Japan gradually became one of the leading technological societies.
Meanwhile, in the 1990s, Malaysia had its Vision 2020 policy, which aimed to develop the nation so that it could join the ranks of advanced economies by 2020.
That did not happen and instead the infamous 1MDB exploded, tarnishing our reputation internationally as a corrupt country.
Certainly, we have made a lot of progress – but corruption stains the nation.
Services for the elderly
What opportunities did we miss, and what will we miss in the future?
If we continue with race-based politics, with specific groups feeling entitled, corruption will spread. The opportunities we will miss will be huge.
Most advanced economies will see an ageing population at around the same time. Many in these countries are entitled to pensions and other old-age benefits. Even China will be faced with unfavourable demographics, partly as a result of its ‘one child’ policy in the past.
This means that advanced economies are likely to find it difficult to honour their pension and retirement obligations to senior citizens.
Already, some Americans are looking for alternative places to retire – and Malaysia is one such destination. Below are some excerpts from a write-up in International Living:
The world is getting smaller and retiring abroad isn’t uncommon anymore. Why wouldn’t you retire elsewhere if you could create a better lifestyle, lower your cost of living, embark on an incredible adventure, or make shoveling snow a thing of the past? Whatever your reasons, Malaysia just might be the place for you.
There are so many benefits to moving to Malaysia. The climate is tropical; think Florida, hot and humid with rainy and dry seasons.
Check out this paragraph that celebrates the diversity in Malaysia:
The Malay, Chinese, Indian, and European ethnicities that make up Malaysia uniquely blend together, and have done so for the past 500 years. This cultural mix means that there are a lot of festivals taking place, all the time, and in reality, there are about 300 festivals per year. In fact, Malaysia has more public holidays than any other country in Southeast Asia, some 16 days per year.
Why not move forward to promote Malaysia as a place to retire? We have a mild climate, and most people speak English, making adjustments easier for those who wish to retire in Malaysia.
Here’s another example of the opportunities lying in wait. In Western countries, healthcare is prohibitively expensive. In the US, if you don’t have medical insurance and you are diagnosed with a condition that requires surgery, you could be in big trouble. Families sometimes go bankrupt over medical bills for uninsured conditions. Many Americans would gladly go abroad for medical treatments – if they could be assured of high-quality medical care.
Malaysia offers quality medical care at much lower costs than in the US, and so, wealthy older Americans may find Malaysia an attractive place to retire. Such moves would help Malaysia too. Jobs would be created and entire industries could grow, focusing on services for the elderly. This is, of course, conditional on high quality medical care and favourable tax treatment.
A reputation for corruption would taint the attractiveness of Malaysia. The opportunities are ours to miss.
Corruption also reduces the attractiveness of Malaysia to foreign investors. In the current market environment, many are searching for attractive ’emerging market’ economies. Malaysia is fairly attractive and could draw substantial investment, but poor governance raises doubts in foreign investors’ minds.
The harsh reality is that we are seeing an outflow of portfolio investments, which puts pressure on the value of the ringgit. Talk of imposing capital controls raises investors’ fears that Malaysia is a risky place to invest in. (Not that capital controls are necessarily a bad thing. Under some circumstances, they may well be the best of limited alternatives.)
We need to be prepared so that we can be resilient. Capital controls during the Asian currency crisis in 1997 were not that bad. But today’s financial environment is different.
I only write this because I care despite having lived abroad for four decades. I am dismayed that the country still has race-based political systems. To me, that’s political immaturity.
Dr Jacob Nelson has a PhD in accounting and finance from Washington University, St Louis, with research in applied economics, along with 25 years’ experience in financial markets with international financial institutions. Though he has lived abroad for four decades, Jacob remains a Malaysian who follows developments in Malaysia with great interest