INEQUALITY IN CLIENTEL CAPITALISM

Over the past 30 years, only 33 countries have made the transition to high-income status

That economic growth since independence gained a generation ago has not benefited all rakyat2 equitably, including slower income growth especially among younger and lower-skilled workers, inequitable access to quality education, and inadequate social safety nets for the poor is a testimony that neoliberal economic development under capitalism does not benefit anyone but a class of ethnocapital colluding with compradore corporate capital in taking on a new phase in the globalization of production and finance with monopoly-capital collaboration.

Whereas an ethnocratic governance is representatives of an ethnic group that is holding a disproportionately large number of public posts to advance their ethnic group to the disfranchisement of others, the ethnocapital in this country is specifically the Malay-dominated kleptocrates who had lorded over the country since 1957.

What had these ruling regimes shown are RACE, RELIGION, ROYALTY, and POLITICS but not equality in the distribution of wealth.

1] WEALTH INEQUALITY

Succeeding oligarchy regimes had continued maintaining a clientel ethnocapitalism domitnation over the working class rakyat2 with 1% of the bumiputera population (see Khalid lse.blog) or about 40,000 ethnocapital  political families  running and looting – and ruining – the national economy. 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. With post-industrialidation and the introduction of financialization capitalism, the role of clientelship capitalism had inserted into the monopoly-capital supply chain in an age of imperialism. Corporate capital in the SMEs collaborates with Global North to tighten the commodity supply chain with monopoly-capital M&E vendors like AIDA, SKF, Cohu, VAT, Oerlikon Balzers, Favelle Favco, Bromma, Vitrox, etc.; recently, Digi, Nestles and British American Tobacco are, by market capitalisation, leading the list of foreign companies that dominate Malaysian businesses in alliance with Global North monopoly-capital – all in furtherance of neo-imperialism penetration that by now the country is an ownership of a failed state, (see Aliran 2021).

That capitalism fails as a good society is evident from a simple examination of its main features. 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, more 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

Indeed, even thirty years after the NEP (New Economic Policy) implementation, by 2002, Malaysia’s inequality level was then still 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. 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; immediate consequence is accentuating wealth disparity with the working class.

As the household income has since raised Malaysia’s average poverty line income (PLI) to RM2,208 from RM980 in 2016, this 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 .

3] INEQUITABLE ACCESS TO QUALITY EDUCATION

Students in public higher education institutions in Malaysia 2012-2019, by gender are that in 2019, around 291.53 thousand male students and 415.02 thousand female students were enrolled in public higher institutions. The country had 20 public universities, 53 private universities and six foreign university branch campuses; and 403 active private colleges of various categories.

Yet the graduates unemployment rate is high despite all the education’s public and private infrastructure and corporate capitalism investment.

The primary and secondary school enrollment was reported at 43 % in 2019, according to the World Bank collection of development indicators, compiled from officially recognized sources. This is well below even the middle-income developing states.

Malaysia spends a large share of the national budget on education, yet learning outcomes have consistently fallen below expectations according to a recent World Bank Report which is often well articulated at various times by many rakyat2 like the question of

Is there Anything Wrong With Our Malaysian Schools? by Teck Zhee Liew

i) Not surprisingly, literacy rates are high in Peninsular Malaysia, at 95%, but it has to be noted significantly lower in Sabah and Sarawak, at 79% and 72% respectively, because their communities are poor, inaccessible, less educated and probably have lower expectations of their children. Irresponsible teachers take advantage of this by reporting for work but not attending classes, and falsifying records.

“Imagine a student walking an hour and a half to school, where there is no path or public transport, only to find no teacher when he arrives. Who is to blame? What can parents do if they are not literate and cannot afford to find out whether the teacher had to attend to regular, non-classroom administrative duties or was simply negligent, backed by a local politician who helped appoint the teacher in the first place?” Unesco Global Economic Monitoring Report 2017/2018 (GEM)

ii) The unfairness and inequality perpetuated by succeeding ethnocapital ruling regimes had only reinforced a phenomenon where the good – and well-to-do – students have exercised the exit policy and opted for the private sector where it is more lucratively beneficial to corporate capital. We are witnessing capitalism intensity with corporate capital investing in what were once regarded belonging to the public sectors ( whether it is in the pharmaceutical industry or the telecommunications sector ), and the resultant outcome is the mushrooming of international and private schools and tuition centres, and home-schooling becoming an alternative and popular learning choice to public educational institutions; we are having more private (corporate capital funded) universities than public institutions.

“If the situation worsens, there will be little left of national schools.”

iii) Politically, teachers are a sizeable vote bank, and politicians are quick to defend them no matter the situation, but we know that bad teachers are the weak link in the education system. We have heard this many times before: we may have picture-perfect policies but implementation is imperfect.

Datin Noor Azimah Abdul Rahim, chairman of Parent Action Group for Education Malaysia (PAGE) had expressed that according to the recently released Unesco Global Economic Monitoring Report 2017/2018 (GEM), “a review of teachers, school administrators, parents and officials in 24 countries found that 54% believed the code of ethics had a significant impact on reducing misconduct. Therefore, the teacher code of ethics shall be the guiding light“; but, unfortunately – and inevitably – oligarchy regimes are more interested in illicit capital and illegal tradings than management on the economic imperatives and rakyat2 welfare.

4] INADEQUATE SOCIAL SAFETY NETS

At about 0.7% of gross development product (GDP), Malaysia’s spending on social safety nets is much lower than almost all countries that have graduated to high-income status since 2000, which generally spend about 1.5–3.4% of GDP.

According to Ken Simler, Senior Economist, Poverty and Equity of World Bank Group, Shakira Teh Sharifudin, Senior Economist, Macroeconomics, Trade and Investments, World Bank Group and Zainab Ali, Research Analyst (Poverty and Equity) at World Bank Group: in the Aiming High: Navigating the Next Stage of Malaysia’s Development report, the national’s large commitments to operating expenditures such as salaries, pensions, and debt service payments have put continuous constrains on its ability to allocate more for social spending, as well as projected spending on long-term economic development.

The country, nearly everyone at the bottom 20% (B20) income group receives some form of social assistance, but they enjoy only 29.5% of the total program benefits. In contrast, a large share of social transfers ends up in the M40 (37.2%) and the T20 (9.5%) households.

Indeed, since 2012, Malaysia’s revenue collection as a percentage of GDP has been on a persistent decline, and this has negated a national’s ability to provide the high-quality public services and social safety nets that the expanding middle-class increasingly expects.

In 2019, Malaysia’s revenue collection stood at 17.4% of GDP. The country’s operational expenditure constitutes 80% of budget allocation is definite exceedingly far below her investments expenditure. As a dire consequence, the revenue collection is regarded as well below the average figure for upper-middle-income countries (28%) and high-income countries (36%). The nation severely under-collects in key revenue areas such as personal income and consumption taxes, in part from an expansive system of tax deductions and exemptions across all income levels rather than selectively be towards the T20 class.

Not only that, with the exception of the real property gains tax, the nation has minimal tax capital gains and there is no wealth tax in place: thus, reinforcing our argument that the corporate capital stronghold within a clientel capitalism environment is where the ruling class set to enjoy its wealth substantially, and indefinitely.

Then again, responding to the World Bank 2020 World Values Survey on whether it is an “essential characteristic of a democracy that governments tax the rich and subsidize the poor”, unlike in many other countries, most Malaysians had an indifferent view. It seems that the strife towards class discrimination has yet to attach traction. Without strong political intervention, and a teach-in initiative to be followed by appropriate and adequate processes in dismantling the kleptocrates’ capital superstructure, the clientel class of bourgeoisie leeches shall remain to suck rakyat2 labouring effort dried through surplus value expropriation.:

Capitalism takes the form of value: with the rate of exploitation expressing itself as a rate of surplus value, Paul Sweezy, “Marxian Value Theory and Crises,”

5] THE CLIENTEL CLASS

The twenty-first century rentiers are everywhere, scooping returns accruing from natural resources, investments, from land, from housing, monopolistic utilities, consumer credit, long-term contracts and infrastructural platforms’ data. The core feature of rentier capitalism is the resurgent capitalistic power that spans cultivated resources, fossil fuels, mined resources, finance, housing and the public sector out-sourcing rackets which generated surplus values that are being expropriated.

Rentier capitalism needs also be understood as part of political clientelism where over time, “citizens came to expect and rely on patron-client relationships, nested within party machines, albeit reinforced by carefully structured distributive and development policies”, (Meredith L. Weiss, The Roots of Resilience: Party Machines and Grassroots Politics in Southeast Asia, Cornell University Press and the National University of Singapore Press, 2020, p.76), where clientelism is the feature of Malaysian politics, fostered forcefully by the BN and UMNO ruling elites, whence even opposition parties had began to replicate that behaviour, too.

By delving into a class analysis of clientel capitalism, we shall discover that the power or dominance relations among persons, their subsumed class to entitled positions is where political power defines economic dominance and social status deference.

We shall define the concept of class “places” as distinguished from class positions where “places” exist at each of the these levels of society: economic, political, and ideological (or cultural) levels where at the latter, social dominance regards bumiputeras status and on an islamic allegiance, for instance.

By ethnocapital we mean a (malay)  bumiputra owned and controlled an entity performing under a rentier or clientel capitalism approach whether it is a public agency, a government-linked company (GLC) or a privatised and or commercial enterprise.

Between the dominating and the dominated, under capitalism the bourgeois are really
dominant at each level whereas the proletariats dominated at each.

The clientel capital [place] had aligned with economic oligarchs [positions] in accepting rentier capitalism to sustain their hold on [power]. They adopt this clientelism as solicitations for votes at the grassroots level, allowing ruling elites [place] the party patronage [position] and political [power] to “effectively partisanizing them and ensuring ground-level officials with whom most voters interacted with ……are political party loyalists” (Weiss, 2020), resulting in the skewed distribution of profits by political stakeholders and the stark inequality of wealth permeating in the country as clearly expounded in a LSE.blog by Khalid.

The outcome of rentier capitalism is swelling of economic inequality and deeper socio-economic injustice in the country thus widening the class struggle within.

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Specific corporate components exploration on Rentier Capitalism in Accumulation HERE

The Political Economy of Malaysia – a brief survey on the development of underdevelopment, economic stagnation and socio-economic inequality under Neo-Imperialism regime with neoliberal policies – is presented HERE.

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FROM COLONIAL RACIAL CAPITALISM TO CLIENTEL ETHNOCAPITAL COLONIALISM

The history of capitalism, from the beginnings of British colonialism half a millennium ago to our present ruling regimes of using clientel-capitalism to colonialise the minds of the unrepresented destitutes in order to retain and sustain political power, immiserising countless rakyat2 land-settleless, and to continue impoverishing the poors in order for capitalism, specifically clientel ethnocratic capital – with political fabrication and economic entrenchment of the NEP construct (James Chin, 2016) which clearly divisive to the nation’s unity and sense of belonging (Lim Teck Ghee) – to exist and flourish, here’s a short perspective.

A few hundred years ago, colonial capital ploughing through our pristine forests opened up settlement plantations and mineral mines had brought about rubber latex and tin ores for new product consumption in the Global North. Under this imperial process, indenture labour and labour slavery were introduced to peninsula Malaya, Sarawak and British North Borneo:

The plantation system was based on the superexploitation of labour. Pay was so low that the English assistant Leopold Ainsworth wondered how the Tamil workers and their families could “possibly exist as ordinary human beings” on the wages paid on his boss’s Malayan plantation. In 1926, the cost of a Papuan indentured laborer was 20 percent of that of a white worker, 25 percent of that of an employed estate manager, and 10 percent of that of a white unskilled laborer. Racist humiliation, insult, and cruelty were part of the everyday lives of the coolies ( a humiliating term given to the local inhabitants ), while the pale-skin estate owner sipped at stengahs (whisky and sodas) clad in sweatstained khakis, summoning a “boy” with a teapot or gin bottle to the veranda at the end of another hot and humid day with the topee on his head.

Large-scale plantations supplied consumption commodities such as coffee, sugar, cotton, and tea – and the rubber latex tapped as rolls of caoutchouc  and balls of rubber – known as “niggerheads” from their alleged resemblance to the skulls of black people – arrived in Europe aboard returning slave ships where England had a 33 percent total share of the slave-trading in the caribbean West indies and North America; indeed, the Royal African Company, under the ruling arms of the British Crown, owned and controlled 90 percent of the African-slave share in 1690.

In the 15th century, the Roman Catholic Church divided the world in half, granting Portugal a monopoly on trade in West Africa and Spain the right to colonize the New World in its quest for land and gold. Pope Nicholas V buoyed Portuguese efforts and issued the Romanus Pontifex of 1455, which affirmed Portugal’s exclusive rights to territories it claimed along the West African coast and the trade from those areas. It granted the right to invade, plunder and “reduce their persons to perpetual slavery.” Queen Isabella invested in Christopher Columbus’s exploration to increase her wealth and ultimately rejected the enslavement of Native Americans, claiming that they were Spanish subjects. Spain established an asiento, or contract, that authorized the direct shipment of captive Africans for trade as human commodities in the Spanish colonies in the Americas. Eventually other European nation-states — the Netherlands, France, Denmark and England — seeking similar economic and geopolitical power joined in the trade, exchanging goods and people with leaders along the West African coast, who ran self-sustaining societies known for their mineral-rich land and wealth in gold and other trade goods. They competed to secure the asiento and colonize the New World. With these efforts, a new form of slavery came into being. It was endorsed by the European nation-states and based on race, and it resulted in the largest forced migration in the world: Some 12.5 million men, women and children of African descent were forced into the trans-Atlantic slave trade. The sale of their bodies and the product of their labor brought the Atlantic world into being, including colonial North America. In the colonies, status began to be defined by race and class, and whether by custom, case law or statute, freedom was limited to maintain the enterprise of slavery and ensure power.

Even after slavery was abolished, millions of people in the Global South still fell victim to the continuing worst of the “free” marketplace. Even after the Second World War, when decolonization led to the end of the so-called “Golden Age of Capitalism,” new liberal economics’ adventurers returned boldly to rob again the wealth of Global South. Even after post-independence, emerging clientel ethnocapitalism replaced colonial racial capitalism by enforcing drastic bad union-bursting labour measures on the working rakyat2, in an imputation of neo-colonialism; see also, Bhopal, University of North London; and STORM’s Rentier Capitalism in Accumulation, 2021).

In 1964, seven years after attaining independence from her colonial master, there were still some forty-odd British companies in the country with the rubber and tin industries accounting for 60% of the stock exchange capitalization; one-fifth of the value of tin output and almost one-quarter of the value of rubber estate output were owned by foreign accounts. British Guthrie corporation ultimate control would still be directed from London – until the Dawn Raid – while 49% of its Malaysian ownership were shared only locally. This agency house had re-invested less than RM$100 million (about then 12 million sterling pounds) since 1946. In 1970, the Malays yet formed the majority of poor, accounting for 74% of all poor households in Peninsular Malaysia; overall, poverty poor and inequality wealth distribution in the country go hand in hand:

Source: Martin Ravallion 15 April 2019

This new economics continuance after independence – the series of neoliberal economic development programs scripted with the assistance of the Development Advisory Service of Harvard (DASH) – laid the doomed foundation to a crisis after crises since: the Asian Financial Crisis of 1997, the dotcom crisis 2002, the Global Financial Crisis 2008, and the present Covid19 pandemic which is an Ecological-Epidemiological-Economic crisis covering so many sectors that we need to understand the construction of the unequal local situations and how by linking those compradore capitalism to the global system (Samir Amin, 2019) in the past and the clientel ethnocapitalism at present – where malay voters expect to, and rely on, patron-client relationships, nested within party machines, to benefit from distributive and development policies – we are beginning to see the transcendence of the capitalist system central to so many of our existing socio-economic problems, like:

source: Stagnated Economy, 2021

That capitalism fails as a good society is evident from a simple examination of its main features. What comes first in capitalism is not human development but privately accumulated profits by a tiny minority of the population. The most important implication is that although the middle 40 per cent and the bottom 50 per cent benefited significantly from economic growth, the Bumiputera in the top income groups (the top 1 per cent and the 10 per cent) benefited the most from economic growth :

source: (Khalid 2019)

When there is a conflict between profits and human development, profits take primal precedence. Just ask the unemployed, those underemployed toiling as drivers and delivery men in the Gig-economy jobs, the sick and infirm, the poor, and the racially marginalised.

A good society must be marked by three characteristics: social ownership of the means of production, social production controlled by workers, and satisfaction of communal needs and purposes.

IF the FELDA’S scheme has continued to expand its intake of new settlers not only in peninsula Malaysia but widely and wisely spreading forth to interior hinterlands not gone before; onto Sarawak and Sabah seeking out fresh frontiers never settled before, and had not corporatised as the Felda Gobal Venture (FGV) that bankrupted and demised its vision of social production to be controlled by the owner-settlers, and that had there be a full land reform plan like in Taiwan or south Korea so that the social ownership of productions belongs to communal needs and purposes – there would be equity in land distribution with property ownership together with equality sharing on wealth :

Land is a commodity in a Malay village; it is a “living” commodity. It has both a historical and a socio-economic value. It has a historical value in the sense that the cultivated territory as a whole tells the story of a settlement process for a given community, and each particular lot tells the story of a long line of individuals, of their efforts and their failures. Moreover, land has socio-economic aspects because it can and does circulate; it can be divided, taken away, accumulated, or rented, and as such it is a medium of communication between villagers. However, if he decides to move out of the scheme, he forfeits any right to the land, both plantation and house lot, as well as to the house itself.

As it is, through the ascendancy of ethnocracy in the 1970s and the bureaucratic rise of political Islam by 1980s, the overarching exertion of racial capitalism coupled withl an alliance of corporate capital in government linked companies (GLCs) with political clientielism, had taken a toll in the State of Nation’s politico-economic construction.

The racial capitalism arose not only in our country, but in worsen situations during colonial capitalism under imperial ventures by white feudal royalties, Mercantile merchants and their mercenaries as late as the early twentieth-century. Black radical thinkers such as Esther Cooper Jackson and W. E. B. Du Bois, to Oliver Cromwell Cox and Eric Williams, all the way to contemporaries like Ruth Wilson Gilmore all stated that racial capitalism is the mutually constitutive entanglements of racialised and colonial exploitation within the process of capital accumulation. According to this narrative, capitalism, as we know it today, would not have been possible if not for imperialism, colonialism, racial slavery, expropriation, and superexploitation. Capital accumulation would not be possible today if not for these ongoing monopoly-capital imperialistic developments. Our story of these world-systems rests upon on how imperialism and colonisation created a system of unequal exchange where the periphery – the Global South – is impoverished as it supplies grossly underpaid (and enslaved) racialised workers (from southern India and the Fujian and Guangzhou southern provinces of China as indenture labour and “coolies“, respectively), and the transformation process of extracted raw materials into finely finished products that enrich the core community in the Global North.

Such aspects of racial capitalism also highlight the centrality of race to capital accumulation. They maintain that capital and capitalist states secure profit maximization not simply by “rendering labour abstract,” as Karl Marx once theorized, but by tying profits to what Lisa Lowe called “the social production of difference,” including race, gender, and nationality, (Lisa Lowe, Immigrant Acts (Durham: Duke University Press, 1996).

Du Bois described both the racial and colonial character of global capitalism and how the incredible accumulation of capital was achieved through the superexploitation of the so-called darker races across the world and within the core. They were those dark and vast sea of human labour in China and India, the South Seas and all Africa; in the West Indies and Central America and in the United States — that great majority of mankind, on whose bent and broken backs rest today the foundation steels of modern industry — shares a common destiny. Under such darkened gloom, that human piece of labour is despised by colour and rejected as and by race. They are paid a wage below the level of living decently; driven, beaten, prisoned and enslaved in all but name, yet spawning the world’s raw material and luxury — cotton and wool, coffee, tea, cocoa, palm oil and rubber, fibres, spices, leather and silks, lumber, diamonds, jades, copper and rare earths. All these are harvested or mined, gathered and combined at prices lowest of the low, transformed through manufacturing processes, and transported through global commodity supply chains with high profitability gain. The resultant wealth is distributed and displayed as yet the basis of world power and universal dominion accompanied with armed arrogance impunity in Madrid and Paris, Berlin and Rome, London and New York. From the explicit exploitation of the dark and brown proletariats comes the Surplus Value filched from human beasts’ hearts and souls, which in cultured lands, Du Bois intoned, the Machine and harnessed Power veil and conceal, (E. B. Du Bois, Black Reconstruction in America 1860–1880 (1935; repr. New York: Free Press, 1992), 15–16):

source: Poverty Poors and Poor Poverty, 2021

Even Marxist feminists like Claudia Jones in the 1940s and many others today argue that Black women face a triple or interlocking oppression they argue, structure the exploitation of workers by elucidating how neither the induction to work nor the surplus value created by all workers is the same. In doing so, they specify why capitalist exploitation is more intensive and brutal for workers of colour. Through the structural and historical framework of racial capitalism, it is determined that capital accumulation depends on this global racialised division of labour and who would eventually be disproportionately impacted, (Claudia Jones, An End to the Neglect of the Problems of the Negro Woman! (New York: National Women’s Commission CPUSA, 1949; other FEMALE black Marxist writers; Jean Alt Belkhir; Intan Suwandi).

Then, in what ways has racial capitalism try to assist us to understand the global political economy in the present time of COVID-19? On one aspect, it has historicised the pandemic within the stretched arc of racial capitalism, and shows the mechanisms by which COVID-19 has exacerbated the already existing, structural racial and colonial inequalities that undergird the global economy. We just need to reflect on the racial prejudices on the Rohingyas, the Bangladeshis and even towards our Dayaks, Melanaus and  Kadazan-Dusun compatriots, whether at workplaces or in lockdown communities. Capital and the ethnocapital colonialism have imposed Federal governing state apparatus to deem non-bumi and other non-national labour “essential” to maximising and maintaining profits (see Ethnocratic HEGEMONY).        

All this while, the core consumption countries are calling on these racial workers both within their own countries and in the global periphery to ensure continued production and profits in almost every realm, thereby exacerbating racial and economic inequalities both within and between countries. At the same time, monopoly-capitalism states are further marginalizing these very workers from much needed social protections to cope with the impacts of COVID-19 on their health, income, and overall well-being, (Jomo). Finally, broadly and increasingly,  racial capitalism literature has illuminated why, despite these dire social and economic conditions, white supremacistic-attitude workers continue to refuse to join a multiracial antiracist movement for liberation from imperial and racial capitalist exploitation, whether in Global North, and more importantly, to support those in the Global South who are experiencing union busting throughout Southeast Asia, especially when capital accumulation has widened so enormously, (Hiatt Woods, “How Billionaires Saw Their Net Worth Increase by Half a Trillion Dollars During the Pandemic,” Business Insider, October 30, 2020; usatoday).

The uneven labour employment and unqualified endurement can be seen with the Second Malaysia Plan, 1971-1975, where it had proposed that 22% of the 495,000 new jobs to be created in peninsular Malaysia would be in the manufacturing sector. This means a three folds increase in employment in the manufacturing sector from the 1960 figure of 121,000 to 378,000 by 1975. Past performance had shown that the low employment absorption capacity in the manufacturing sector, especially in the pioneer companies; in fact, the manufacturing sector provided only 5,500 new jobs per year during 1966/67,(Lo Sum-Yee, The Development Performance of West Malaysia, 1955-1967, with special reference to the industrial sector, Heinemann, Kuala Lumpur, 1972, Chapter 7, pp.66-73 and E.L. Wheelwright, Industrialisation in Malaysia, University of Melbourne Press, 1965, Chapter 4, pp.62-70).

The tendency is for these industrial groups which had matured quickly in terms of value-added where capital utilization rates were often high. The frequent argument that the textiles, electronics and ship-building industries are labour-intensive needs not necessary be true, as a survey of the 1968 Manufacturing Industries Census revealed that the electrical appliances ranked 22nd, the textile 36th and ship-building 44th in a group totaling of 112 industries in terms of capital-intensity by sector,(W. Donald McTaggart,  Industrialisation in West Malaysia, 1968, Center for Asian Studies, Arizona State University, January 1972, Table 4, p.32), and where the surplus value is highest at the R&D design and development phases and in the marketing and post-sales support stages:

source: Digital Knights, Surfing Serfs, 2021

Even in the much endowed electronic industry, implanted behind free-trade zones  employing female workers at US 40 cents per hour, but created only 12,000 new jobs in 1973. Indeed, the labour intake in these run-away factories is reaching its maximum input for productive efficiency compared to other Southeast Asian countries. On electronic assembly plant, Indonesia leads in cheap off-shore production; labour cost for a 1000-person plant is estimated at US$ 505,000 (assuming a semi-skilled is paid US$25 per month), Thailand at US$561,000 (labour cost US$42/month), and Hong Kong, the most expensive – US$1,815,000 (labour cost US$118 per month), (as referenced in Electronic International, April 4th. 1974, p.66). The profit margin like Apple which has major outsourced units in the country like Murata Manufacturing Co., Renesas Electronics Corp. and Ibiden Co., which make chips and circuit boards for the corporation, its surplus value on a particular product line is exemplified by it’s high profit margins versus its labour costs:

source: MR Online, February 2021

Meanwhile, Apple Inc has asked its major suppliers to assess the cost implications of moving 15%-30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain and labour arbitrage advantages, according to a Nikkei Asian Review report.

What Costas Lapavitsas,  Financialised Capitalism: Crisis and Financial Expropriation,  Historical Materialism 17 (2009), School of Oriental and African Studies, London) had stated is truism: when financialization capitalism reared its ugly head by the 1980s, the ensuing  financialization of Malaysian capitalism led to the emergence of a new politics of debts, and it also coincides with rising levels of household indebtedness. It reconfigures society where share ownership and shareholder value take preeminence, a growing influence from capital market-based financial system, the further entrenchment of the political rentier class power as well as the polarization of wealth and income, and the explosion of financial innovation and trading that led an economy more towards “speculation” than the engenderment of production to be equally shared by rakyat thus increasing government debts in the process – one asks whether private finance can really serve humanity (Jomo, 2020).

This situation is further compounded since 2003 whence the corporate bond market has reached an unprecedented size of RM$190 billion, while similarly since 1999 the total private sector bonds outstanding have surpassed that of public sector bonds (Bank Negara, 2007). This expansion of bond finance favours bigger corporations linked to the government (whereby the GLCs board members are constituents as clientel ethnocapitals) – and concurrently, an expanded  circulation of new debt papers :

that became one of the many other factors that inevitably and eventually indebted the nation now, see Stagnated Economy:

source: Sudhdave 2020

Therefore, the most enduring socio-economic and clientel ethnocapital colonialism issues in Malaysia are those related to the bumiputera and non-bumiputera term and the dichotomy, the compartmentalisation and polarity that has resulted since the term was introduced into the nation’s political lexicon and life. The contrived term and dichotomy was a deliberate and opportunistic strategy of the political and policy leadership to create a new political taxonomy to manage and control the political-administrative workings and socio-economic development of the country, and with the NEP to prioritise “UMNOputra” interests and dominance, predominantly and specifically to entrench bumiputera clientel ethnocapitalism.

In Sarawak, there is an emergence of a Second Class of Bumiputera. The promise of New Economic Policy (NEP) introduced by the federal government in the 1970s which was supposed to help the Bumiputera population in East Malaysia appears to only benefit what is locally known as the MB – the Muslim Bumiputera whereas local muslims are regarded as the second-class Bumiputera – rather than all are, and should be, a Bumiputera.

Further, although the Orang Asli are the original, indigenous peoples of Malaysia, they have been largely excluded from the country’s economic growth of recent decades. Rather than protect this marginalized community, state officials and private agencies regularly exploit the Orang Asli and their ancestral lands for corporate capital advantage.

It has to be noted that of the 18,858 applications from the Ibans wanting to join the Federal civil service, only 24 were accepted while only one out of the 617 Orang Asli who had applied was accepted (Bernama, 11 December 2006). Indeed, at the state level, most of the senior positions are held by Muslim Bumiputera.

The long-term consequence of such political marginalisation is the taming of Kadazandusun and Dayak leaders through the elimination of their political power stronghold, and constituent bases, by forcing Kadazandusun and Dayak leaders in the then federal ruling Barisan Nasional (BN) cliques to be ‘yes-men’. Not unlike the Dayak in Sarawak, the Bajaus and Muruts in Sabah shall also may never hope to win political power on their own under such dominant control of clientel ethnocapital colonialism.

Whereas Colonial Capitalism exploited, and expropriated wealth of nation, the post-independence Clientel ethnoCapitalism pursues the underdevelopment of states and spoils country by siphoning the national wealth through 1MDB and other corrupted practices with grandstand lootings and a completely mismanagement of the political-economy that likely than not there would not be a growth path trajectory towards a high income economy for the next twenty years to come by.

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