What change? A reply to Dr Mahathir Mohamad


mahathir-warshipFormer prime minister Dr Mahathir Mohamad published a piece called ‘Change’ in his blog.In it he asked why change governments. He then criticised the socialist ideology. He strangely claimed that “Malaysia has no ideology”. That is completely untrue.


When Mahathir came into power in 1981, Malaysia was introduced to the neoliberal ideology. This is an ideology that is biased in favour of corporations and capitalists. It is the opposite of socialism, which aspires to put people first. The neoliberal ideology was aggressively promoted around the world in the early 1980s by influential global networks of business interests and their supporters.

Their mantra?
Sell off public assets. Remove regulations, so big businesses can run free. Control workers' wage demands. Cut public expenditure.
Mahathir joined the bandwagon. This is well-documented in books and papers.
His economic advisors were businessman Daim Zainuddin and the well-known neoliberal strategist, Kenichi Ohmae.

It was Ohmae's rejected mega-project to create a 'Multimedia Supercity' in Tokyo that got recycled in Malaysia as the 'Multimedia Super Corridor'. Read Dr Tim Bunnell's book, Malaysia, Modernity and the Multimedia Super Corridor (2004).

Ohmae's ideological influence was “extremely significant”. And what other ideology is that if not neoliberalism?

After becoming prime minister, Mahathir quickly announced a privatisation policy in 1983 — in line with the standard neoliberal programme.

Publicly-held assets were sold off to private business interests, entrepreneurs and corporate “captains” to supposedly make the economy more 'efficient'.

But efficient for whom?

The “massive privatisation strategy” carried out during Mahathir’s tenure is said to be linked to “increased competition for resources within the ruling Malay party [Umno]”; it redistributed resources “in favour of emerging factions centred on key political leaders”.

That is what political economist Jeff Tan found out and wrote in his book, Privatization in Malaysia: Regulation, Rent-Seeking and Policy Failure (2008).

Indeed, many privatisations are improperly justified handouts for the capitalist elite from the public coffers.
Selling off the public's holdings remains a favoured economic policy of the Malaysian government until today. Witness the recent sale of Penang's port and other public-owned assets to well-connected tycoons.

The neoliberal ideology calls for weaker worker unions so that big businesses can have the “economic freedom” to exploit workers to maximise profits.

Again, the Malaysian government’s development agenda subordinated labour in favour of private business interests in the 1980s under Mahathir's watch, according to economist K.S. Jomo and Patricia Todd in their book Trade Unions and the state in Peninsular Malaysia (1994). Labour oganisations in Malaysia are weak relative to business power. They have no bite to negotiate for better working hours, conditions and pay.

The neoliberalism ideology wants 'free markets' in labour, so that the 'price' of an employee (his wage) can be competed down if necessary. Fixing minimum wages is bad.

Mahathir forcefully argued against minimum wages in Malaysia, claiming it might bankrupt Malaysia, without providing sufficient evidence (“Dr M: Minimum wage may bankrupt Malaysia”, The Malaysian Insider, March 2, 2012). Mahathir did not bother at all to consider the positive aspects of minimum wages.

The neoliberal ideology is opposed to strong states that directly ensure the people's welfare, but it supports a strong state to enable businesses and capitalists to flourish freely, to ensure corporate welfare.

This involves all kinds of hidden subsidies and supports for businesses, including overlooking environmental regulation and standards.

And so we have today Lynas and the threat of radiation. Our rivers are polluted by business activities, and yet the people must pay businesses to buy water filters for their homes and mineral water.

Mahathir does not like the welfare state approach, which says 'if we properly meet basic social needs and securities first, economic prosperity will come'. Mahathir prefers the opposite, neoliberal approach, which says 'support the corporate class, and enough wealth will “trickle down” to the people'. Now Malaysia has one of the higher income inequalities amongst the Asean countries. The super-rich are sucking hundreds of billions of dollars out of the country in illegal outflows.

Mahathir complains about an unjust neoliberal world order, but Mahathir hypocritically follows the neoliberal ideology, says political science professor Johan Saravanamuttu in his book Malaysia’s Foreign Policy, The First Fifty Years (2010).

Even the Nobel economist whom Mahathir is fond of quoting, Joseph Stiglitz, has rubbished this neoliberal ideology, calling it a “grab-bag of ideas” about markets supposedly serving the public interest by “privatisation, liberalization”, when in fact it is simply “a political doctrine serving certain interests”. Read Stiglitz's article called, “The end of neo-liberalism?” (2008).

On debt, Mahathir says Greece borrowed a lot of money and is bankrupt.

But Europe fears Italy has also borrowed too much and is going bankrupt.

Malaysia has been given a financial warning: a top debt ratings agency says our public finances are weak, and are at the same level as debt-struck Italy (“Fitch warns Malaysia of possible downgrade due to ‘deteriorating’ public debt ratios’, The Edge, 1 August 2012).

Malaysia’s debt is now more than half of the income Malaysia as a whole earns in a year. This debt is RM456 billion. This debt nearly doubled since 2007, or in just four years.

This is to say every Malaysian now owes about RM16,000. If you earn RM4,000 a month, then you need to give up four month's pay to settle the debt.

Mahathir says: “Look at [Barisan’s] record... compare it even with the developed West. They are in deep financial trouble...”

Mahathir says: “Five years to give a trial as government is dangerous. Many things can be destroyed in five years.”

But which government doubled Malaysia’s debt in less than five years? Barisan Nasional, right?

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