While Malaysia fiddles, its opportunities are running dry
November 15, 2006
MALAYSIA'S been at it again, arguing about what proportion of the
economy each of its two main races — the Malays and the Chinese — owns.
It's an argument that's been running for 40 years. That wealth and race
are not synonymous is important for national cohesion, but really it's
time Malaysia grew up.
It's a tough world out there and there can be little sympathy for a
country that prefers to argue about how to divide wealth rather than get
on with the job of creating it.
The long-held aim is for 30 per cent of corporate equity to be in Malay
hands, but the figure that the Government uses to justify handing over
huge swathes of public companies to Malays but not to other races is
absurd. It bases its figure on equity valued, not at market value, but
at par value.
Many shares have a par value of say $1 but a market value of $12. And so
the Government figure (18.9 per cent is the most recent figure) is a
gross underestimate. Last month a paper by a researcher at a local
think-tank came up with a figure of 45 per cent based on actual stock
prices. All hell broke loose. The paper was withdrawn and the researcher
resigned in protest. Part of the problem is that he is Chinese.
"Malaysia boleh!" is Malaysia's national catch cry. It translates to
"Malaysia can!" and Malaysia certainly can. Few countries are as good at
wasting money. It is richly endowed with natural resources and the
national obsession seems to be to extract these, sell them off and then
collectively spray the proceeds up against the wall.
This all happens in the context of Malaysia's grossly inflated sense of
its place in the world.
Most Malaysians are convinced that the eyes of the world are on their
country and that their leaders are world figures. This is thanks to
Malaysia's tame media and the bravado of former prime minister Mahathir
Mohamad. The truth is, few people on the streets of London or New York
could point to Malaysia on a map much less name its prime minister or
As if to make this point, a recent episode of /The Simpsons/ features a
newsreader trying to announce that a tidal wave had hit some place
called Kuala Lumpur. He couldn't pronounce the city's name and so made
up one, as if no-one cared anyway. But the joke was on the script
writers — Kuala Lumpur is inland.
Petronas, the national oil company is well run, particularly when
compared to the disaster that passes for a national oil company in
neighbouring Indonesia. But in some respects, this is Malaysia's
problem. The very success of Petronas means that it is used to
underwrite all manner of excess.
The KLCC development in central Kuala Lumpur is an example. It includes
the Twin Towers, the tallest buildings in the world when they were
built, which was their point.
It certainly wasn't that there was an office shortage in Kuala Lumpur —
Malaysians are very proud of these towers. Goodness knows why. They had
little to do with them. The money for them came out of the ground and
the engineering was contracted out to South Korean companies.
They don't even run the shopping centre that's beneath them. That's
handled by Australia's Westfield.
Next year, a Malaysian astronaut will go into space aboard a Russian
rocket — the first Malay in space. And the cost? $RM95 million ($A34.3
million), to be footed by Malaysian taxpayers. The Science and
Technology Minister has said that a moon landing in 2020 is the next
target, aboard a US flight. There's no indication of what the Americans
will charge for this, assuming there's even a chance that they will
consider it. But what is Malaysia getting by using the space programs of
others as a taxi service? There are no obvious technical benefits, but
no doubt Malaysians will be told once again, that they are "boleh". The
trouble is, they're not. It's not their space program.
Back in July, the Government announced that it would spend $RM490
million on a sports complex near the London Olympics site so that
Malaysian athletes can train there and "get used to cold weather".
But the summer Olympics are held in the summer.
So what is the complex's real purpose? The dozens of goodwill missions
by ministers and bureaucrats to London to check on the centre's
construction and then on the athletes while they train might provide a
Bank bale outs, a formula one racing track, an entire new capital city —
Petronas has paid for them all. It's been an orgy of nonsense that
Malaysia can ill afford.
Why? Because Malaysia's oil will run out in about 19 years. As it is,
Malaysia will become a net oil importer in 2011 — that's just five years
So it's in this context that the latest debate about race and wealth is
It is time to move on, time to prepare the economy for life after oil.
But, like Nero fiddling while Rome burned, the Malaysian Government is
more interested in stunts like sending a Malaysian into space when
Malaysia's inadequate schools could have done with the cash, and arguing
about wealth distribution using transparently ridiculous statistics.
That's not Malaysia "boleh", that's Malaysia "bodoh" (stupid).