Monopolies, Capital and Monopoly-capitalism

28/03/2023

1] INTRODUCTION

TnG is currently the only contactless and cashless method of payment at highway tolls and for public transport in the country. Prime Minister Datuk Seri Anwar Ibrahim said on 19th March 2023 the monopoly of TnG would be reviewed so that other forms of toll payments could also be used.

On the following day, Transport Minister Anthony Loke said an open payment system for transport services under Prasarana Malaysia Berhad would be implemented soon to give public transport users other choices besides TnG.

Aside from TnG, there is a monopoly for motor vehicle inspection (Puspakom Sdn Bhd), landline telecommunications (Telekom Malaysia Bhd or TM), electricity supply (Tenaga Nasional Bhd or TNB), SYABAS Selangor sole water supplier, and the medical supplies to government hospitals,  (Pharmaniaga Bhd), and Bernas – the rice importing entity controlled by Syed Mokhtar Albukhary, preceeding regimes’ profit-gaining prodigy.

Then, there is at least one case of a very limited competition – that of the import of sugar. The business is controlled by only two companies, namely, MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd. Individually, the market capitalisation of these companies ranges from RM$629 million to RM$19.95 billion.

Geoffrey Williams of the Malaysia University of Science and Technology had said monopolies in food production, especially in the import of rice and other staples, that should also be dismantled as they led to higher prices for consumer besides introducing food insecurity in the country.

Those are positive suggestions in breaking commodity and service monopolies in Malaysia. The dismantling of the monopoly in the food and essentials sectors to ensure competition is a good direction to end ruthless profiteering through sheer capital accumulation in clientel-rentier capitalism that reeks of inequality and marginalisation, (read  STORM, March 2023, Structuring Sustainability in Economic Development).

It has reached a phase whereby capitalism genesis new formation in search of economic exploitative relations, subjecting exploited labour to monopoly-capitalised control. The terrains of economic territory that are increasingly subject to capitalist organisation and monopolistic penetration are in basic amenities and social services that used to be the sole preserve of public provision. However, the generation and distribution of knowledge under the dominant domain of infrastructural platforming ecosystems, (read  STORM 2023, Techno-feudalism), has induced the gig-economy labour dimension as digitised digits, (STORM 10/03/2023, Short-circuiting the Rakyat).

2] CAPITALISATION OF CONTROLLED RESOURCES

A major feature of our times is the privatisation of much of what were generally accepted as basic responsibilities of public provision. Basic amenities like electricity, water and transportation infrastructure, and social services like health, education, water and sewerage sanitation used to slot into this category. Of course, the fact that these were seen as public duties does not mean that they were always fulfilled – just look at the slacking educational segment with its inadequate deliverance, (csloh, Sabah – a state underdevelopment).

That private provision has increasingly opened up huge new markets for potentially profit-making – and capital accumulation to clientel-capitals’ related activities. Given the saturation of markets in many mature economies, and the inadequate growth of markets in poorer societies, and the intrusion of  global institutions such as the World Bank, the International Monetary Fund and the World Trade Organization (WTO), as well as more informal bodies such as the World Economic Forum that have actively encouraged private investment in formerly public sectors.

Simplified, these entities are more an expression of the modern imperialistic drive for control over economic territory than the neocolonial direct annexation of geographic territory, but that does not make it any less consequential.

As an instance, the privatisation of knowledge and its concentration in fewer and fewer hands – especially through the creation and enforcement of new ‘intellectual property rights’ – have become significant barriers to technology transfer and social recognition of traditional knowledge. This is clearly evident in the case of access to medicines whose prices have been hiked up by patents that reward multinational companies and allow them to monopolise production and set high prices or demand very high royalties.

Similarly, control over seed patents, which are overwhelmingly held by TNCs (transnational corporations), have enabled Big Agribusiness monopoly control over crucial technologies for food cultivation across the world, even in the poorest societies, (STORM 2023, Agribusiness and food insecurity).

Further, for industrial technologies, as well as knowledge for mitigating and adapting to adverse environmental changes – they are all grave ecological disasters from the production systems created by global capitalism.

Meanwhile, at the production phase, from which workers and small producers like SMEs mainly derive their incomes, is exposed to cut-throat competition between different production sites across the world in the globalisation trend to “liberalise trade”.  Consequently, incomes generated in this stage of the value chain are kept low through the mechanism in global labour arbitrage.

The overall result is twofold.

First, this situation results in an increase in the supply of the ‘global’ labour force (workers and small producers who are directly engaged in production of goods and services).

Second, the power of corporations to capture rents – from control of knowledge, from oligopolistic or monopolistic market structures, and from the power of finance capital over state policy – has greatly increased, (STORM, 2021, Dominance of financial monopoly capitalism).

Overall, this has meant a dramatic increase in the bargaining power of capital relative to labour, which in turn has resulted in declining wage shares (as a percentage of national income) in both developed and developing countries. These processes have only worsening material conditions for many workers in both the periphery and the core.

Imperialism has inadvently weakened the capacity for autonomous development in the Global South, and worsened economic conditions for workers and small producers in the emerging and low-income countries.

In April 2022, Oxfam reported that more than a quarter of a billion people falling into extreme levels of poverty in 2022 alone.    

In its January 2021 Report, ‘The Inequality Virus’, Oxfam stated that the wealth of the world’s billionaires increased by US$3.9tn between 18 March and 31 December 2020 when their total wealth stood at US$11.95tn, a 50 per cent increase in just 9.5 months.

Further, according to Oxfam’s analysis, 13 out of the 15 IMF loan programmes negotiated during the second year of COVID required new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk. Indeed, Oxfam and the Development Finance International (DFI) had revealed that 43 out of 55 African Union member states face public expenditure cuts totalling US$183 billion over the next five years.

The world’s poorest countries were due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports.

Remembering that beneficiaries had intensified during the global boom of the 2000s, when median workers’ wages stagnated and even declined in the Global North metropolitans even as per capita incomes soared. However, those increases in income were only captured by  stockholders, corporate barons and financial rentiers and capital vultures.

Therefore, from a bigger picture perspective, we are witnessing even in the rich countries with glaring evidence, increasing inequality, stagnant real incomes of working people, and the increasing material fragility of daily life have all contributed to a deep dissatisfaction among ordinary people, (Oxfam Report 2022).

3] MONOPOLY-CAPITALISM

Monopolies do not exist by themselves. These entities existence owes systemic institutionalisation of politico-economic policies of preceeding regimes that introduced ethnocratic kleptocrats’ practices which encouraged illegal trading and odious transactions.

As part of the neoliberal globalised economy – where 40% of labour are involved in international trade –  the country spawns intermediaries as comprador capitalists to cooperate, collaborate and collude with Global North monopoly-capital mission objectives.

Monopolies technology founded by the infrastructural platforms of the imperialist centres; the monopoly of access to natural resources like those in the Big Agribusiness sector; the monopoly over finance as dominated by foreign banks; the monopoly over international communication and the multimedia in fibre optics installation and maintainable by the infrastructural platforms monopoly-capital – all these demons affect a national economic development.

These monopolies tend to be regionally concentrated in the countries of the Global North, but since the globalisation trend in the 1970s also persist in a more multipolar world with peripheral subsidies emerging in the Asia-Pacific, South America and Middle East and North Africa (MENA) regions.

The resultant image of monopoly-capital is
identifiable according to Samir Amin and Jayati Ghosh in Interpreting contemporary imperialism: lessons from Samir Amin,

to six significance categories:

(1) the imperialist bourgeoisie at the centre or core, to which accrues most of the global economic surplus value;

(2) the proletariat at the centre, which earlier benefited from being a labour aristocracy that could enjoy real wage increases broadly in line with labour productivity, but which was now more threatened and experiencing falling wage shares and more insecure employment conditions;

(4) the dependent bourgeoisie of the periphery, which exists in what he saw as an essentially comprador relationship with multinational capital based in the core; possible a higher rate ofaccumulation.

(5) On the demand side of the accumulation equation, monopolistic industries adopt a policy of slowing down and carefully regulating the expansion of productive capacity in order to maintain their higher rates of profit.

The consequences of monopoly mean that the savings potential of the system is increased, while the opportunities for profitable investment are reduced. Other things being equal, therefore, the level of income and employment under monopoly capitalism is lower than it would be in a more competitive environment.

(6) the proletariat of the periphery, which is subject to super-exploitation, and for whom there is a huge disconnect between wages and actual productivity because of unequal exchange;

(5) the peasantries of the periphery, who also suffer similarly, and are oppressed in dual manner by pre-capitalist and capitalist forms of production; and

(6) the oppressive classes of the non-capitalist modes (such as traditional oligarchs, warlords and power brokers).

While the global supply chains represent the integrative structure of contemporary global capitalism, and any disruption to them potentially threatens the functioning of the system itself, present discourses from policymakers seem to be, and keen, to promote their purported benefits, that is, proposing multifaceted ways to increase supply chain “resilience.” (IMF 2023).

This articulated notion has been defined by the World Trade Organization and Asian Development Bank as “the ability of these chains to anticipate and prepare for severe disruptions in a way that maximizes capacity to absorb shocks, adapt to new realities, and re-establish optimized operations in the shortest possible time.”  

While global supply chains are promoted as generating positive gains for firms and workers, North and South there is mounting evidence to suggest that they represent organizational forms of capitalism designed to raise the rate of surplus value extraction from labour by capital and facilitate its geographic transfer from the Global South to the Global North.

As global supply chains have contributed to dynamics of concentration in leading firms, there is emerging a marked shift in national income from labour to capital across much of the world, (read Monthly Review, 2021, Breaking the Glass Screen – Framing Monopoly Capitalism in Global Commodity Chains.

Capitalism, as Karl Marx observed, is rooted in the exploitation of labour by capital through the latter’s ability to extract surplus value from the former.

It is characterized by dynamics of concentration and centralization of capital, where fewer and larger firms increasingly dominate each economic sector.

These dynamics are intrinsically related to capitalism’s uneven geographical development and the reproduction of geopolitical tensions and geoeconomic disruptions.

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References

An overall excursion with a better understanding of monopoly-capital and capitalism can be acquired through these related readings:

Benjamin Selwyn and Dara Leyden, “World Development under Monopoly Capitalism,” Monthly Review 73, no. 6 (November 2021): 15–28.

Intan Suwandi, Value Chains: The New Economic Imperialism (New York: Monthly Review , 2019).

John Smith, “The GDP Illusion,” Monthly Review 64, no. 3 (July–August 2012): 86–102.

John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna, “The Internationalization of Monopoly Capital,”  Monthly Review 63, no. 2 (June 2011): 1.

John Bellamy Foster, and Intan Suwandi, “COVID-19 and Catastrophe Capitalism,” Monthly Review 72, no. 2 (June 2020): 1–20.

and

STORM, 01/06/2021 Framing Monopoly-Capitalism

STORM, 05/03/2021 Capitalism

MADANI Malaysia – praxis with structural sustainability in economic development

22nd March 2023

A STORM Paper

1] INTRODUCTION

Challenges facing state of nation are poverty, inequality, and marginalisation where Malaysia poverty rate for 2015 was 4.80% which is the percentage of the population living on less than US$5.50 a day, (World Bank).

A] Poverty

The revised national poverty line in July 2020, according to World Bank, is that 5.6% of Malaysian households are currently living in absolute poverty, and that the nation has to focused on addressing the well-being of the poorest 40% of the population (“the bottom 40” or B40). This low-income group remains particularly vulnerable to economic shocks as well as increases in the cost of living and mounting financial obligations. 

Following the removal of broad-based subsidies, even though succeeding regimes have gradually moved toward more targeted measures to support the poor and vulnerable, mainly in the form of cash transfers to low-income households, these uneven – and the indirect and unjustified benefits to the upper class of society like in petroleum subsidy and no wealth or capital gain taxes imposed – only perpetuate the class divisions, thus

B] INEQUALITY

Capitalism is not towards human development but privately accumulated profits by a tiny minority of the population. The implication is that although the middle 40 per cent and the bottom 50 per cent benefited significantly from economic growth, however, glaringly is the ethnocapital  Bumiputera in the top income groups (the top 1 per cent and the 10 per cent) benefitted the most from economic growth :

whereby the top 1% of Bumiputera is way above the national income, and other communities incomes, too. This is a decomposition of growth rate of real income per adult, 2002 to 2014 (pre-tax national income)  : Khalid 2019

Income inequality in the country, in fact, remains high relative to other East Asian countries. While income growth for the bottom 40 has outpaced the top 60 over much of the last decade, the absolute gap across income groups has increased, contributing to widespread base of the poor being left behind.

Eventually, even thirty years after the NEP (New Economic Policy) implementation, by 2002, Malaysia’s inequality level had remained extremely high: its top 1 per cent income share was 19 per cent and the corresponding number for the top 10 per cent was 44 per cent, which is higher than those of the US and substantially even higher by inequality than those of China until post-2012 :Notes: Distribution of pretax national income (before all taxes and transfers, except pensions and unemployment insurance) among adults. Equal-split-adults series (income of married couples divided by two). Imputed rent is included in pre-tax fiscal income and pre-tax national income series; source: Khalid 2019.

It is during this period where the share of the wealth is acutely benefitting the high-income group of capital-endowed class :

The undeniable fact as to why many  bumiputera had not attained parity despite +60 years of neo-liberal-enforced economic development is the existence of a new class of compradore capitalist.

According to the UNDP 1997 Human Development Report, and the 2004 United Nations Human Development Report, Malaysia has the highest income disparity between the rich and poor in Southeast Asia, greater than that of Philippines, Thailand, Singapore, Vietnam and Indonesia.Malaysia’s 50 Richest 2020; Forbes 2022. With globalisation, rentier capitalism attaches to the neo-imperial monopoly capitalism and its link to the global commodity chain dimension because of the multiple roles of rent intermediaries between capital and its accumulation; the direct consequence is in the accentuating of wealth disparity with the working class.

This is happening even as the household income has since raised Malaysia’s average poverty line income (PLI) to RM$2,208 from RM$980 in 2016. It also means that the new metric brings Malaysia’s absolute poverty rate to 5.6% in 2019. This means that almost 6 out of 100 households in Malaysia could not afford to meet basic needs like food, shelter and clothing.

In 2019, the high-income T20 household would have earned 10 times more than the low-income household. In 2020, the high-income household still earns 6.7 times the low-income household. Though the Gini coefficient relative gap has narrowed, the absolute Gini coefficient gap has increased (as an instance, the earnings difference of T20 was RM$9,000 in 2019, but it was at a very high figure of RM$17,000 by 2020). Therefore; there is no equality improvement, but extremely widen inequality cutting across racial groupings :Source: Martin Ravallion 15 April 2019 .

Therefore, more than ever, there is a need to better understand and properly measure poverty and inequality. This is so that responses and policies can be rolled out more effectively and equitably.The government is currently considering an update of its poverty line income and multidimensional poverty index. This is not only timely but also important to improve poverty measurement to a standard commensurate with Malaysia’s current living standards and state of development.

C] Marginalisation surfaces because of wide-differentiated poverty across states.

Indeed, the poverty rate in Sabah in 2020 was the highest in the nation – more than three times the national average. That 36 percent of all those living in poverty in Malaysia are located in Sabah only denoted the development of underdevelopment in a natural resource-rich state with oil and timber.

Sabah had a gross domestic product per capita of RM5,745, compared with the national average of RM7,901, (read csloh ,   Sabah – a state underdeveloped).

By 2019, many districts in the Sabah state were in poverty rates in excess of 50 percent.

Even within an urban setting, in the study,   Children Without – a study of urban child poverty and deprivation in low-cost flats in Kuala Lumpur,  UNICEF  found out that :

On top of the disadvantages of the rural urban disparity as a factor of inequality in the country, (World Bank, 2022; and World Bank, 2019), students in rural communities tend to come from a lower socioeconomic class as compared to their urban counterparts; and these inadequacies permeated across states, too, where in Sabah and Sarawak there are high numbers of children between 5 and 19 years old who have no schooling.

Young children are being marginalized.

2] A STRUCTURAL APPROACH demands over the longer term, as Malaysia converges with high-income economies, incremental growth will depend less on factor accumulation and more on raising productivity to sustain higher potential growth. While significant, Malaysia’s productivity growth over the past 25 years has been below that of several global and regional comparators.

Core of any national economy’s long-term growth is the rise of productivity, and there are only two ways for achieving that. One is a more sophisticated division of labour, the other is scientific and technological advancement. Whilst market scale can be maximized in an interconnected international environment, especially connectivity with developed economies through global supply chain mechanisms, the division of labour needs to be more sophisticated (skills with expertise) and to be professionalised (enhancing with upskilling), enabling thus productivity to be raisen. Similarly, it is also only through connectivity and cooperation with other partnered countries can a nation upgrades the technological level of its industries.

Therefore, ongoing reform efforts to tackle key structural constraints will be vital to support and sustain Malaysia’s development path.  

According to the World Bank’s Human Capital Index, Malaysia ranks 55th out of 157 countries.  To fully realize its human potential and fulfil the country’s aspiration of achieving the high-income and developed country status, Malaysia will need to advance further in education, health and nutrition, and social protection outcomes. Key priority areas include enhancing the quality of schooling to improve learning outcomes, rethinking nutritional interventions to reduce childhood stunting, and providing adequate social welfare protection for  household investments in human capital formation.

To achieve this grandeur mission goal the Targeted Area-based Poverty Alleviation Objectives (TAPAO) have to be implemented.

The targeted area-based poverty alleviation  objectives (TAPAO) are to adopt instruments from nationwide institutions – experienced staff and their expertise together with endowed national resources – to provide basic relief to broaden targeted interventions regionally; followed by more narrowly focused programs for poor district areas, daerah², and villages kampung²; and finally with measured activities targeting specific poor households directly. Concurrently, to be successful – maintainable and sustainable – the coverage of social protection programs (from better education facilities, community-based healthcare to supportive social benefits) have to be rapidly expanded, too.

TAPAO  in sizing and averaging rural per capita income must also focus on the country’s hinterlands, especially the mountainous interiors of Sarawak and Sabah.

Refining the geographical target of poverty reduction programs is a necessity. The TAPAO needs to shift from daerah² to kampung²  including more likely
some outside the list of poverty-stricken daerah, too. Collectively, those designated kampung²  (villages) may cover
a certain high percent of the country’s rural poor. Designated villages could then apply for projects to support local production and infrastructure (including makan-pada-kerja : food-for-work programs, worker training, and agribusiness development comprising technology extension services; not to be neglected, government-linked investments in social infrastructure (schools, clinics, community and recreation centers), with a particular strong participatory community-based self-help gotong-royong approachroyong.

3] SUSTAINABILITY

By incorporating two Malay notions,  kemampanan  (ongoing, collective effort) and  keseimbangan  (balance), a Malaysian definition would extend sustainability beyond the natural environment to include rural and urban communities, families and individuals who form an integral part of the ecosystem we know as Malaysia.

The economic development of a nation demands that its goal to attain high-income and developed nation status while ensuring that shared prosperity is also sustainable.

As one of the many Global South countries, Malaysia is one of the lmost open economies in the world with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of jobs in Malaysia linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia’s economy has been on an upward trajectory, averaging growth of 5.4% since 2010, and is expected to achieve its transition from an upper middle-income economy to a high-income economy by 2024 and beyond.L

That sustainable pulsation in growth – and progress in economic development – has to be continually maintained.

4] REAL PROSPERITY is enshrined in the Islamic concept of falah (success, happiness and wellbeing). Unlike capitalism, however, Islam extends the falah concept to the entire community rather than restricts it to single individuals, stressing that abundance is a blessing to be shared.

The Qur’an places special emphasis on wealth distribution where wealth should not be hoarded by the rich. In the Malaysian context, we find that the neoliberal policy of the preceding regimes, with its emphasis on free market and privatisation, have only benefited a few elites, especially wealthy compradore capitals. This legacy economic ethos must be overhauled so that a just economic system that is equitable to all irrespective of race and creed while upholding the true spirit of democracy, individual rights, tolerance, gender equality and pluralism permeates right to the soul of every rakyat-rakyat.

This vitality vision for the economy strikes a chord with the Qur’anic message:

“…so that it (wealth) may not be [a benefit] going round and round among such of you as may [already] be rich…”
[Sura al-Hashr; 59:7]

Plato – in The Republic – once said:

“There should exist among the citizens neither extreme poverty nor, again, excessive wealth, for both are productive of great evil”

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Related Readings

TAPAO

Structuring Development

Financing Growth

TAPAO: Targeted Area Poverty Alleviation Objectives

12/03/2023

1] The ECONOMY SPREAD

After 6-decade plus in “economic development “, the state of a nation is still mired in poverty stretching from north and northeast semanjung across the South China Sea to the Borneo states of Sarawak and Sabah:

Indeed, the poverty rate in Sabah in 2020 was the highest in the nation – more than three times the national average. That 36 percent of all those living in poverty in Malaysia are located in Sabah only emphasized the development of a underdevelopment in a natural resource-rich state with oil and timber. Sabah had a gross domestic product per capita of RM5,745, compared with the national average of RM7,901, (read csloh ,   Sabah – a state underdeveloped).

By 2019, many districts in the Sabah state were in poverty rates in excess of 50 percent.

As an instance, the poverty rate in Tongod stood at about 57 percent in 2019, around 10 times the national average.

Even within an urban setting, in the study,  Children Without – A study of urban child poverty and deprivation in low-cost flats in Kuala Lumpur,   UNICEF  unearthed:

When we have 70% of lower-income households  that cannot even meet monthly basic needs – indeed, at least 86% of these urban households reported having no savings at all – not much of a difference between them and their rural community folks:

At the macro-level, the country is in a slow growth regime

where any incremental growth will depend less on factor accumulation, but more on raising productivity – which over the past 25 years has been below that of several regional comparators – to sustain higher potential growth.

Coupled with the premature de-industrialisation in the 1990s – where 40% of work force are contributing, directly and indirectly, to the manufacturing exports sector then – it is not surprising that the poverty rate has not only risen, but disparity has accentuated

2] The TAPAO

The targeted area-based poverty alleviation objectives (TAPAO) are to adopt instruments from nationwide approaches to provide basic relief to broaden targeted interventions regionally; followed by more narrowly focused programs for poor district areas, daerah², and villages kampung²; and finally with measured activities targeting specific poor households directly.

Concurrently, to be successful – maintainable and sustainable – the coverage of social protection programs have to be rapidly expanded, too.

Briefly, this area-based development-oriented poverty alleviation efforts have to be structured with a national-wide Poverty Reduction and Extra-Developmental Initiative Schema (PRAXIS) as the immediate response to lagging economic growth and stagnating incomes in the identified areas of the country. Whether a State Economic Development Corporation’s Poverty Reduction and Development group is to be established “to provide coherence to a large number of poverty reduction initiatives and, in particular, expedite economic development in poor areas” (as advised by World Bank 2009, for another country) or that The PRAXIS shall identify poor daerah, primarily based on district-level average rural per capita income that must also focus on the mountainous hinterlands of the country, especially in Sarawak and Sabah.

Refining the geographical target of poverty reduction programs is a necessity. The TAPAO needs to shift from daerah² to kampung² including more likely
some outside the list of poverty-stricken daerah, too. Collectively, those designated kampung² (villages) may cover
a certain high percent of the country’s rural poor. Designated villages could then apply for projects to support local production and infrastructure (including makanan-dengan-kerja programs, worker training,
and agribusiness development comprising technology extension services; not to be neglected, government-linked investments in social infrastructure (schools, clinics, community and recreation centers), with a particular strong participatory gotong-royong approach.

Whatever the developmental programs to be formulated, development of farm
activities and off-farm employment opportunities (funded with subsidized loans); infrastructure
development in roads, electricity, and safe drinking water using predominantly rural workers on the basis of
food-with-work (makanan dengan kerja); a comprehensive universalisation of primary education and basic preventive and curative health care that is community-based; establishment of a monitoring system – very importantly – to hold local personnel in governance accountable for the use of budgetary transactions; and the mobilization of a broad group of government and nongovernment
actors in a joint poverty reduction effort.

Poverty is one of the key factors of education inequality in the country, (World Bank, 2022; and World Bank,2019). On top of the disadvantages of the rural urban disparity, students in rural communities tend to come from a lower socioeconomic class as compared to their urban counterparts; and these inadequacies permeated across states, too, where in Sabah and Sarawak there are high numbers of children between 5 and 19 years old who have no schooling

3] THE STRATEGIC WRAPPING

The targeted poverty alleviation strategy should be aimed to help all of the poverty poors to achieve incomes above the national income poverty line and meet a set of multidimensional goals.

The strategy should span the arching process from poverty identification to poverty exit, determining whom to help, who should help, how to help, how to exit, and how to avoid poverty reoccurrence.

The strategy has to be based on a comprehensive database of targeted households and their specific needs, complemented with local knowledge to find appropriate solutions, and importantly, from past experience in odious practices, the definition of clear lines of accountability for optimal results.

It needs to be said that instruments that should be deployed would include policies for economic development and income generation, relocation and resettlement, ecological protection and ecology disasters compensation, education, and social protection. The overall strategical aspects would overall remained focused on creating the conditions for poor households to find employment and a stable source of income to lift themselves out of poverty, while combining this with household-specific support in key areas such as rural settlements and urban housing, skills enhancement and development, health care, job search, and where necessary, income transfers including unit-trust investments and savings.

The identification of poor households would be that of an integrated top-down and bottom-up approaches. The top-down approach included the Department of Statistics, Malaysia (DoSM) – whose dataset would determine “numerical quotas” of poor households, both nationwide and in each daerah-district refering to the 2022 national poverty census as a baseline for bottom-up identification. The quota parameters should be broken down to each administrative level. Under the bottom-up approach, civil service officials and student-recruited census interviewers are to be dispatched to carry out precise poverty identification data collection.

On the basis of the quota allocated, each team registered every poor household regardless of whether they live in the poor district or daerah.

It has to be stated that notably, household income ceased to be the only criterion for identification. At times, most of the time, local government officials often do not have accurate and reliable income records for all rural households, thus they can adopt a different criteria such as verifying household assets like home and durable goods utilised to supplement the income-based poverty line.

Further, to include all qualified households, individual districts may be allowed to register up to 10 percent larger populations than their numerical quotas to obtain a better baseline.

The implementation of the strategy may not likely be smooth. Errors of inclusion (households identified as poor that did not need assistance) and exclusion (poor households that failed to receive adequate support) resulting from governance weaknesses in rural areas and mountain hinterlands may likely emerge, given the lack of reliable income survey data at the kampung-village level. This may eventually lead to additional verifications and the reidentification of poor households, as well as close supervision of declared “exits” from poverty.

It has to be further stated that local grass-root feedbacks may have to be created to support top-down accountability, too.

4] THE TAKEOUTS

TAPAO is appealingly appetising, but

A) TAPAO can only be tastefully successful if a nation is truly endowed with a “capable and  effective government” (Bikales 2021; Ravallion 2009), as reflected in the ability to articulate credible policy commitments, to effectively coordinate decisions by various government departments, and to mobilize a variety of social actors to support a national goal.

It is acknowledged that a capable, credible, and committed government is key to the success of development strategies. The 2017 World  Development Report (World Bank 2017) identifies the core functions of effective governance to draw lessons for development. Its main message is that effective governance institutions deliver three core functions: credible commitment, enhancing coordination, and inducing cooperation. 

All three core functions were present in the design and implementation of China’s poverty reduction efforts, which represents an interesting case study of effective governance, (World Bank and DRC 2019).

First, the credibility of the government’s commitment to poverty reduction has to be flagged early on, with clearly defined targets and the creation of an entity like the Poverty Reduction and Extra-Developmental Initiative Schema (PRAXIS) to supervise progress and establish accountability at the highest level.

When, during this early process, if it becomes clear that economic growth alone would not suffice to reach the last mile of poverty reduction, there has to be a positive feedback in the form of learning, unlearning, relearning education (to LURE back dissidents or disruptive elements, whether in the targeted area-base residents or from governing civil servants).

Then, secondly, the Poverty Reduction and Extra-Developmental Initiative Schema (PRAXIS) coordinating supremo has to consolidate all federal ministries and departments,  reflecting the importance placed on interdepartmental coordination and collaboration, though it is also preferable that local district officials are given wide latitude to experiment, and indeed, compete with each other.

PRAXIS, for instance, should embrace the quintuple helix approach where the State district officers mobilise the vital five subsystems (helices):

(1) education system,

(2) economic system

(3) natural environment,

(4) civil society

(5) and the political system

to not only articulating the objectives but also the inter-linkages in process, procedure and people elements in TAPAO deliverance.

Thirdly, through this defined administrative procedures, reward and accountability mechanisms, with a strong performance management system, shall ensure that civil servants aligned personal goals with central priorities on one hand and career promotion dependent on their performance in achieving predefined outcomes (for example, economic  advancement, social stability, or poverty reduction). 

Everyone at all levels, state and privately owned enterprises, academic institutions, and others – all these stakeholders though encouraged to make substantial financial and human resource contributions to the poverty reduction as an essential Rukun Negara patriotic national objectives – may not, however, raise to the tasks in hand.

Whether our civil servants would also be able to raise to a Madani Malaysia occasion is yet to be determined because this public sector is well-known for its lackadaisical attitude and inefficient performance as identified and elaborated in STORM 2022, Place Position Power; and reported in a World Bank study:

The elements constraining effort on improving public sector performance centre on administrative human-resource incapacity, a broadbase corruptive regime with burden of privileges mentality, a lost community soul living in a society laced with serial systemic odious practices, including money-laundering.

B) Infrastructural achievement has to be matched by considerable improvements in access to public infrastructure services, especially in the construction – and, later the maintenance thereon – of rural roads leading to poor areas. The construction of better access routes shall help in the irrigation and drainage facilities in poor areas, too, besides expanding on flood control and  mitigation capabilities.

These aspects were clearly noticeable at the initial implementation of pioneer FELDA schemes which deteriorated once corporate capital intrusion and migrant labour influx into the plantations, (see STORM 2023, Big Money Big Farms; and STORM 2020, From FELDA to FGV.

Importantly, the electronic roads – whether fibre optics and or 5G connectivity – onto the internet highways should not be ignored, (though, conscious of their retarding and degrading dimensions, (see STORM 2023, Digitalisation an Economy: short-circuiting the rakyat).

On the other hand, it has to be accepted that institutional innovations for targeted poverty alleviation have boosted by digital technologies for better efficiency, as in the advice by World Bank to Brazil on Bridging the Technological Divides.

Digital technologies have facilitated poverty targeting and also contributed to improving the connectivity of poor households to markets through e-commerce and facilitation of access to finance through new digital finance platforms as broadly demonstrated in China ability to eliminate poverty within a generation.

The Kerala “hop-step-jump” experience is another such success story whereby significant step with Vellanad village becoming the first fully computerised grama panchayat in India.

C) Fundings – dividends from Petronas, Khazanah, GLICs – whether would be able to boost a national economy and enlarge people’s incomes are not questionable. Nor would a new sovereign fund board be formed to debt service economic development towards a progressive growth path.

The evidence presented in all global studies where readily available financial resources points to significant positive spillover effects for all sectors of the economy and for poverty reduction. However, there may be significant service gaps remaining in specific rural areas, and within high-density residence on urban settings – particularly with respect to children health care and education services, (see. UNICEF 2022, Children Without).

Further, it has to be said that any political bias in local government incentives toward  investments in hard infrastructure to boost growth and the reliance on special purpose  vehicles arguably could perpetuate a misallocation of fiscal resources that could be costly in the long term (World Bank and DRC 2019).

Once an inclusive development path is followed and the implications for poverty reduction and socio-economic policies are adhering to the central core of social idealism of economic development with Malaysian characteristics – then, TAPAO is consumed, satisfactorily.

 EPILOGUE

TAPAO to be successful has to adopt and adapt to a whole-of-government and whole-of-society approach that would induce cooperation and collaboration across government  and nongovernment stakeholders.

Without better governance, and mass participation by rakyat-rakyat, any goal of ending extreme poverty and boosting shared prosperity will be out of reach.

The praxis of economic development should be evidenced by clear insight, determination and endeavour of rakyat-rakyat agitating with agility for a shared prosperity in a common wealth of a nation carrying forward the core values of all mankind.

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References

Bikales, B. 2021. Reflection on Poverty Reduction in China. Swiss Agency for Development Cooperation, Bern.

Khazanah Research Institute, 2018, State of Households II.

Ravallion, Martin, 2009, Are There Lessons for Africa from China’s Success against Poverty, World Development 37(2).303-31.

Ravallion, Martin, 2011, A Comparative Perspective and Poverty Reduction in Brazil, China, and India. World Bank Research Observer 26 (1): 71-104.

STORM, 23/02/2023, Towards structuring economic development with sustainability

UNICEF Children – Without

World Bank and DRC (Development Research Centre of the State Council). 2019. Innovative China: New Drivers of Growth. Washington, DC: World Bank.

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Digitalising an economy : short-circuiting the rakyat

10th March 2023

1] INTRODUCTION

Since the inception of the Multimedia Super Corridor (MSC) in 1996, succeeding regimes in governance have been persistently promoting the digital agenda through multiple initiatives such as the National Strategic ICT Roadmap and Digital Malaysia (2008-2012), National eCommerce Strategic Roadmap (2017), Industry4WRD (2018) and the latest National  Fiberisation and Connectivity Plan (2019-2023). 

The nation has a total workforce of 15.1 million. More than a quarter of this — 26% or a huge 3.9 million people to be exact — are participating in the gig economy: such as ride-hailing, e-commerce delivery, and computer programming.

The country’s digital economy is even estimated to be worth over RM$ 270 billion, which equates to nearly 18% of Malaysia’s gross domestic product, (YCP Solidiance, 2020).

Wow! At their peaks, SIA constituted only 4% of the Singapore economy, and Walmart dominated 10% of Mexico economy.

2] WORLD BANK DIGITALISATION FRONTIERS

On the Malaysia Economic Monitor, February 2023, the World Bank is rather persistence in advocating the advancement towards a digital economy.  Though while advocating Big IT development as a means of continuing capital employment, and consequential deployment of monopoly-capital to own and control infrastructural platforms, this organised entity of US imperialism is only encouraging capital accumulation with extracted value from states – to ensure Global North Big Tech infrastructural platforms shall continue benefiting on expansive exploitation, through global labour arbitrage where underemployed labour is truly exploitated, (read  STORM, 2022, Big Tech Large Gig), and STORM 2023, Big Tech in Marine Cabotage where such transnational (TNCs) infrastructural platforms would even dare to hold our nation in a technical ransom on undersea communication cabling installation and maintenance.

Indeed, the large RM$1.5 billion IT allocation in the Revised Budget 2023 will benefit only wealthy and the well-connected companies – not our local SMEs entrepreneurs – with their huge expenditure for consultancy services, and perpetuating other cock-ups, (Hunter, March 2023).

A digital economy shall signal how infrastructural platforms are not only incrementally becoming invasive as techno-feudalism in the country, but once franchised by privatisation and outsourced to the Global North monopoly-capital that even local compradore capital shall collaborate to accumulate their capital by and functioning as intermediaries.

Take the National 5G case. Vested interests are calling the withdrawal from Swedish telecommunications giant Ericsson in the 5G network, (theedgemarkets, 10/3/23). The Financial Times on 6th March, 2023 reported that Huawei is lobbying for a role in country’s 5G roll-out. Then, Telekom Malaysia (TM), is also competing in this industry, too, and it is not considered a neutral entity in rolling out the network, but a national telecommunications monopoly.

Related Readings: Financialisation Capitalism; Digital Feudal Lords

3] THE DIGITAL ECONOMY

It is not just having multiple programs like eLadang, Pemangkin to Satellite Farms immersing in the metaverse world, any Digital Economy demands an assurance on buy-in from employees to lower resistance to change, and upskilling or reskilling existing talent within various companies through trainings, too.

And these constraints are not adequately nor appropriately attended, especially when the SMEs

are not well-funded nor properly supported by government agencies, as yet:

Compounding the productivity element, labour quality contributed only about 8% to real GDP growth over 2001-18, much lower than the OECD average.

Read also : Digitalisation, Capitalism and SMEs.

Combined comparatively with inadequate IT systems deployment and infrastructural projects implementation, there is still a long drive on our digital highway to cruise forth, and by.

Indeed, the World Bank Report, June 2022 stated the inadequacies of IT implementation in the Sabah state of Borneo (read also csloh:  Sabah – a state underdeveloped) is due to lagging in economic transformation:

Amplifying another factor is that our high-speed broadband accessibility is considerably more expensive compared to other countries, (read  STORM,  Digital Knights).

According to a study on internet access affordability in 2021, people in Malaysia had to pay 26.58 U.S. dollars per month on average for broadband internet access. Meanwhile, the cost of mobile data per 1GB was at 0.45 U.S. dollars per month, (data as released by Statista Research Department, 28/9/22).

Further, Malaysia ranked 74 out of 167 countries in terms of price per Mbps for fixed broadband services, and 64 out of 118 for fiber broadband services – way behind regional peers such as Singapore and even Vietnam.

Enmeshed within these Real Geoeconomics are the socio-economic factors of poverty and inequality that exist in a stark manner in the states of Perlis, Kelantan, Trengganu and Sabah

where there are high unemployment rates among the youth and the emergence and expansion of youth that can be termed as “the precariat” [Guy Standing’s definition (2011)] as the mass class characterized by unstable labour, low and unpredictable incomes, and loss of citizenship rights.

First used by French sociologists in the 1980s, the precariat describes persons “working precariously, usually in series of short-term jobs, without recourse to stable
occupational identities or careers, stable social protection or protective regulations relevant to
them”.

Then, there is the emergence of a “cybertariat” type of worker has created an awareness about the multilateral ways by which mutually reinforcing economic, political and technological factors are transforming not only the global economies, nature and application of work, but also each individual lives, (Ursula Huws, Labor in the Global Economy, 2014 and The Making of a Cybertariat: Virtual Work in a Real World, 2003).

Thus, this informal employment sector occupies a sizeable segment of the country’s workforce that inevitably is without adequate social security safety provisions in place, (read csloh, 2022: Workers; Emir Research: Brain Drain; bernama: gig-economy and Khazanah Research Institute 2020, Shrinking “Salariat” and Growing “Precariat”?):

4] DE-INDUSTRIALISATION AND DIGITALISATION

The present renewal objective in advocating the digital economy is no more than a bad decision in the premature de-industrialisation process during the 1990s.

In Malaysia case, though, the years since 1970, the lack of significant technological upgrading, and the required structural change as a follow-up, has caused the premature plateauing of manufacturing, stemming from failures to coordinate policies, enforce standards, sustain high productivity growth and stimulate transition to higher value-added activities.

The resultant outcomes are that in the Global Value Chains, the country’s attractiveness as an outsourcing base has weakened. Further, rhe contribution of foreign value-added in the manufacturing sector’s export growth has also declined. There is micro-level evidence pointing to weaknesses in terms of human capital and technology, too.

Compounding these situations, there was the often ‘stalling’ – temporarily or complete closure – of the many Malaysian industrial projects that weakened workers employment,
(Jeffrey Henderson et al., Capitalism and Industrialization in Malaysia in Economy and Society, Volume 36, 2007 – Issue 1). Manufacturing as a whole has began to register a slower wage growth since the late 1990s, with labour markets characterized by heavy presence of low-skilled foreign workers, increased contract labour and/or outsourcing and the subsequent declining worker organization. The focus on sweat-based low-skilled foreign labour rather than on expanding professional and skilled labour locally has driven Malaysia down the low industrialization road as a result, (see Rajah Rasiah, Vicki Crinis & Hwok-Aun Lee in Industrialization and Labour in Malaysia).

In fact, a number of Malaysian firms have even relocated their research facilities and/or manufacturing plants to Cambodia and Vietnam to access more developed and expanding markets according to Rasiah, whereas the poverty of Malaysian industrial workers has persisted, and the precarious labour has continued, exacerbated by the dependency on migrant labour that had inadveribly reduced national labour surplus value tremendously.

Then, the concurrent continual enforcement of colonial industrial legislations (see, STORM 2021, Union Busting) had suppressed any broad or even marginal salary gain through the decades.

in the case of Loh Guet Ching v Myteksi Sdn Bhd (berniaga atas nama Grab) e-drivers are considered “independent contractors” and do not have the right to be heard before the Industrial Court for the alleged unfair dismissal by Grab. In short, with digitisation of an economy, the gig-labour is considered a sui generis  class with different legal rights and obligations from 9-to-5 employees as a new dimension to the labour force without adequate social security nor workers rights as an employee of a corporate entity.

Whilst, corporate Malaysia has much to gain with merchandise sales through an e-commerce economy:

5] CONCLUSION

Labour, hence, becomes digital-dehumanised workers where they are mere inputs in an interfacing intermediaries loop as conduits to big data storage and retrieval. A gig-worker daily experience and personal assets are exposed to financialisation or value extraction.

The consequential manipulation of such raw data into timely, accurate, relevant and complete information – by infrastructural capitalism platforms that are so overwhelmingly powerful in exploiting not only surplus value of labour but in the regal accumulation of capital relentlessly, too, (Social Europe,  Gig Workers Guinea Pigs of the New World of Work, February, 2021, and to see Foundation for European Progressive Studies, Governing Online Gatekeepers: Taking Power Seriously, 2021).

In short, where the underemployed youthful and useful gig-labour is exploited to the finite digit.

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The Big Push – A Little Pullback

05/03/2023

The revised Budget 2023 is – after a prolonging duration encasted in a stagnated economy deficit in structural reforms – on a better focused approach to restructure the State of Nation economic development path by way of applying the Madani Malaysia ethos.

What had been lacking through +6 decades in the economic development of the country is not due to lack of the vision or mission goals, but the inappropriate deployment of resources and the mishandling of allocated resources, overlaid by the socio-anthropological dimension with the burden of privileges that pulled back nation’s growth trajectory.

Glaringly, the civil service servants had been the dreadlocks that entangled the national productivity, then coupled with the trials of systemic odious practices – often enabled and or connivance with public service elements – have hung-dried an Asian tiger, (read STORM 2023, Place, Position, Power of Public Sector).

To revisit 2010, when trying to meet the growth targets of the 10th Malaysia Plan, “it would require a significant rise in productivity and investment,” so said Philip Schellekens, lead author of the Malaysia Economic Monitor, (World Bank, 2010).

“The dual approach in the Economic Transformation Program of combining cross-cutting policies with private sector-led projects provides an excellent platform. The proof of the pudding, however, will be in the consistent execution of policy reforms,” he said. “Also, until solid implementation of policy reforms is seen there is unlikely to be a groundswell of positive sentiment of foreign investors towards Malaysia.” (World Bank 2010, ibid).

Also, while trying to achieve Malaysia’s Vision 2020 goal of high-income status, at that moment of an era, would require “a higher growth rate than that achieved in recent years,” so said World Bank Sector Director for Human Development, East Asia & Pacific, Emmanuel Jimenez,
“the (other) challenge is also to ensure that the benefits are broadly shared across all layers of Malaysia’s society. While Malaysia has made truly impressive reductions in poverty, inequality persists at high levels.” (read further on race, class, poverty and inequality in malaysia new left, 2021).

After six and half decades of sustained neoliberalism economic developmental  effort, the nation of Malaysia is still as accentuated in absolute income inequality as ever, (see lower right chart below)

Sources: World Bank datasets and DoSM statistics

Further  expressing that “The bulk of inequality today can be explained by differences in socio-economic factors within ethnic groups rather than differences across groups. It is time to bring all Malaysians within the ambit of greater economic opportunity.”

This is ardently expressed by Khalid research paper at the London School of Economics and Political Science, where presented, the disparity among the Malay community – the top 1% – is much acute, and accentuated:

Some had articulated that it is the faulty education ecosystems, but while many Malaysians cannot take advantage of income-earning opportunities because they lack the skills to do so, then,  despite massive investments in education, for many others, skill needs have changed more quickly than the availability of educational and training opportunities.

It begins to dawn to policy-implementors that as Malaysia seeks to increase knowledge and innovation in its economic activities, it is even more important not to marginalize the unskilled workforce who more likely than not is categorised under as underemployment and or performing zero-hour activities in the gig-economy with all attributes of extractive surplus value being emphasised, and endorsed within a capitalism praxis.

We seems to be living in an era not dissimilar to imperial ownership and control where wage growth remains very low while capital maximized investment returns through extracting surplus-value from labour.

The widening of absolute income gaps between the bottom 40 percent and the top 20 percent of the income distribution have only furthered the angered sentiment of being left behind.

Therefore, in complementary to education is the necessity of labour market reforms that raise the level of employment, streamline the regulatory environment for businesses and remove barriers for new investment.

However, even if income-earning opportunities exist and access to labour, it is still broadly inadequate because some Malaysians will inevitably remain excluded or require temporary support.

Thus, though important elements of a social protection system are in place in Malaysia, there are still many significant gaps remaining – distinctively displayed during the Covid-19 pandemic when income disparity within populace was further accentuated.

It was also a time when  70% of lower-income households  cannot even meet monthly basic needs – indeed, more than 60% of these households reported having no savings at all – not much of a difference than 10 years ago:

and where these household expenditures are expansively spent on food:

But, not every poor, even urban, household has all the requisite food nor valued nutrients (UNICEF 2018):

In the study, Children Without – A study of urban child poverty and deprivation in low-cost flats in Kuala Lumpur,   UNICEF  unearthed:

Further, the state of Sabah gross domestic product per capita of RM5,745, compared with the national average of RM7,901, (read csloh ,  Sabah – a state underdeveloped) where the Borneo state’s  poverty rate is three times that of the national average, and there is a high degree of  inequality across districts, too:

After six and half decades of sustained  neocolonial economic developmental  effort which is nothing but  underdevelopment under neoimperialism, the nation of Malaysia is still casted in acutely absolute income inequality as ever:

One way out of this continous poverty trap is that social safety net programs should be more poverty-focus, targeting mechanisms have to be improved and fragmented programs could be replaced by a well-coordinated social protection system, (see Malaysia Economic Monitor, November 2010 – Inclusive Growth).

Indeed, in the subsequent World Bank Report 2022, the social safety net resurfaced whereby the agency again with an urgency recommended that:

In the short term, financial support for the poor and vulnerable should continue. This includes a more inclusive social insurance framework with improved targeting. The continuation of cash assistance programs to support financially disadvantaged households will provide safety nets and much-needed protection from economic shocks.

The subsequent subsection is a Creative Commons reposted blog by PHILIP SCHELLEKENS, November 08, 2010, where he argued

Why Updating Malaysia’s Inclusiveness Strategies is Key

Compare South Korea and Malaysia in 1970 and compare them again in 2009. South Korea was a third poorer back then and is now three times richer. Even more remarkable has been South Korea’s ability to widely share the benefits of this spectacular feat across broad segments of society. South Korea’s strong focus on broad-based human capital development allowed the country to transform itself into a high-income economy, while at the same time reducing income inequality and improving social outcomes.

Malaysia’s inclusiveness strategies have produced some remarkable successes as well. Malaysia dramatically reduced poverty and has all but eliminated hardcore poverty. But the country has been far less than successful in reducing income inequality which, since 1970, steadily fell for two decades but has stagnated at high levels ever since. The last two decades also saw Malaysia’s growth model of high-volume low-cost production being challenged. Economic powerhouses emerged in the region, which led to more intense competition for talent, trade and FDI. For Malaysia to remain competitive, it became clear that it needs to compete on value, not cost, and this requires a refocusing on getting the incentives right for innovation, creativity and entrepreneurship.

The comparison with South Korea is partly flawed and unfair. For one, South Korea did not need to manage the ethnic tensions Malaysia was facing given the differences in demographic make-up. Also, South Korea was clearly an exceptional success story that few countries around the world have been able to replicate. On the flipside, Malaysia’s economic performance cannot be underplayed either. Indeed, the Commission on Growth and Development identified Malaysia as one in only 13 countries around the world that has since 1950 registered over a period of 25 years or longer an average growth rate of more than 7 percent.

Leaving these caveats aside, the sheer difference in growth performance, as well as South Korea’s remarkable success in improving social outcomes, is nevertheless instructive. The comparison offers some insights on what Malaysia could have achieved, andmore importantly can achieve in the future. This characterization also lies at the core of the recent self-diagnosis undertaken by the Government of Malaysia. The New Economic Model, the Tenth Malaysia Plan and the Economic Transformation Programme all speak to the need to update Malaysia’s inclusiveness strategies so as to realign them with the objective of becoming a high-income economy.

The need to update Malaysia’s inclusiveness strategies reflects both new realities and new challenges. The new reality is that poverty is no longer the key issue when thinking about inclusive growth. Poverty still exists—and pockets of poverty remain deep and concentrated—but inequality is now in the spotlight and is presenting a tremendous challenge. The other new reality is that inequality is no longer what it was four decades ago. Nowadays over 90 percent of the level of inequality is explained by differences within ethnic groups rather than differences between these groups. Individual socio-economic characteristics, such as activity status, sector of employment, urban versus rural stratum, and educational attainment are now the capital explanatory factors, no longer ethnicity.

Malaysia’s high-income aspiration is also raising a whole new set of challenges. High-income economies tilt the demand for labor in favor of the skilled, sharpening income inequality across the skills spectrum. They tend to specialize in product niches and concentrate activity in narrow geographical clusters, raising challenges to retrain people and move them around to where the new jobs are. They are also open to competitive forces, creating challenges for those who are unable to compete or unlucky as a result of such competition.

The November 2010 issue of the Malaysia Economic Monitor, which we are publishing today, offers an analysis of where Malaysia is today and where it could go tomorrow by updating its inclusiveness strategies. Our recommendations on this highly charged topic do not come out of the blue—they are based on a detailed analytical study of the latest household income, labor force, and enterprise surveys, which the authorities have made available to our team. We are also leveraging on the experiences of other countries around the world, who have addressed or are coping with similar challenges.

To fast-forward to the 2023 World Bank’s Malaysia Economic Monitor where the agency is strongly advocating digitalization of a new economy frontier (though critiques are that neoliberalism is modern imperialism assuming a new identity) promoting infrastructural platforms to cater for Global North monopoly-capital, but even then, there are resource limitations and social constraints that could, again, likely pull back the country’s ability and capacity to progress;  simplified, it is primarily due to:

a) The lack of financial resources and digital skills have been cited as key constraints towards digitalization;

b) Even smaller formal firms relied on more traditional methods of payment, especially cash; and

c) Vulnerable segments of the population remain unbanked, despite the expansion of digital financial services.

These other matters pertinent to the national digitalisation process and an e-commerce economy shall be explored, and be expanded, in subsequent articles with differential dimensional approaches recommended to be undertaken when aiming for The Big Push.

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