April 27, 2008
Scary Similarities: Malaysia & South Africa
During the Minda Muda Launch in KL a week or so ago, I was asked by a member of the audience whether there were any other countries that we could compare Malaysia with. I said yes, South Africa is the closest one could think of. Indeed, a friend is doing his PhD in comparative economic analysis between the two countries.
How similar, though, the two countries were, I wasn’t sure until an enlightening conversation today.
We compared the political and economic systems of the two, and agreed that both were living under a time bomb that if not addressed immediately, would implode soon, scarring the country and its occupants permanently.
Ironically enough, South Africa was duly impressed by the affirmative action policy in Malaysia, so much so that it adopted it wholesale in 1994, giving a twenty year period for its implementation. Back then, the freedom fighters released the country from its repressive apartheid system, oppressing the black community. Today, preferential policies are given to the advantage of the blacks over the whites in almost all spheres of public life. This is an exact replica of what we have in Malaysia.
Affirmative action policies come in the form of: Requirements for the blacks at managerial, employment and shareholders’ levels, where 25% of shareholdings should come from blacks, 40% of employment. Procurement should also be given to black service providers, such that many white companies conveniently promoted their black sweepers to become CEOs immediately, but merely as puppet leaders since they have little decision-making abilities.
Just like Malaysia, economic power is concentrated on a small number of black families. Where banking rules require 25% of the shares to be owned by blacks, 16% of this has already been sold off to a group of 5 rich black businessmen, who own 90% of this wealth (the remaining 10% is distributed equitably, but this means only 1.6% of the banking wealth is benefiting 250,000 blacks). The other 9% yet to be sold off is being bidded by a team of 3 very rich black guys as well.
The principle is that whilst a percentage of corporate equity is intended to be distributed to the marginalised community in a country, it should be done such that all members would benefit. Instead, affirmative action policies merely transfer wealth from one elite community to another. The same has taken place here.
They were wise in installing a time factor to their policy, but the bad thing was: They achieved in 10 years what they were to have in 20. The argument is therefore that the policy should stop right now. The same can be said of Malaysia, but worse – it was supposed to have ended in 1991, but it is now 2008 and it does not look like anything will change under a Barisan Nasional government.
Policies aside, their political leaders have equally scary similarities as well. Thabo Mbeki has been losing his popularity because positions himself as a highflying intellectual, cream of the crop from London, surrounding himself with a team of Londoners. Zuma on the other hand emerged from the ranks of the people, considered a left wing peoples representative, close to labour unions and the social democrats. Within the party support is growing for Zuma, and many suspect next years’ national Elections will mirror closely what happened in Malaysia this year.
Mbeki’s government is in utter denial of the real situation in South Africa. My conversant quipped, “Mbeki claims nobody has died of AIDS, and technically he is correct!” (People do not die of AIDS itself, of course – it is an influenza attack that kills you off, after the HIV virus has so weakened your immunity system. They are under an illusion that there is no crime in the country – when in reality, people live daily with thick walls, high gates, security guards, alarm systems, and rapid response teams. The Foreign Affairs Minister is camping in China, when in reality the situation in Zimbabwe needs dealing with urgently instead. This is reminiscent of BN that was unable to deal with the public’s sentiments before March 8th 2008. (things are supposed to have theoretically changed…. but…)
Drawing parallels, responses have varied significantly, some people blaming implementation of the policy instead of the policy itself. I emphasise that the policy itself is at fault. Attaching race to any affirmative action policy is suicide for any country, because it lays the ground and provides great room for wastage, abuse and corruption – based on its very technical definition. Better it would be for needs to be considered the qualifying factor.
Shame on Malaysia for preaching this suicidal policy to South Africa. Woe betide any other country that is even considering “learning” from us. Whilst there are certainly short term gains for the marginalised community, its long term liabilities will be destructive, and I caution against it wholeheartedly.
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