PROLOGUE Between the dominating and the dominated, under capitalism the capitalists are dominant at each level in place, position and power whereas the proletarian workers are dominated at such each level.
1. INTRODUCTION
Looking at the social processes, one shall find the basis of social classes in the relations of production in the economy. Those who own and control the means of production, and who are able to take ownership of all that is produced, form the ruling class.
Those who sell their labour power to the owners of the means of production are the proletariat or working class. Instead of class as a characteristic of individuals, the way classes act in society should be seen as collective actors. That struggle between classes – between capital owner and labouring producers – is the defined essence of history driving all social change.
Classes are rooted in the common material interests that derive from a similar relationship to the means of production. However, that is not enough to unite or empower a class. To be a class “for itself” as well as “in itself,” a class needs a “community, … national bond, and … political organization,” as Marx said in The Eighteenth Brumaire of Napoleon Bonaparte.
The class positions of the capitalist fundamental class processes are productive workers (performers) and productive capitalists (extractors). Capitalists appropriate surplus value from the consumption of labour power during the production of commodities. The surplus is distributed among occupants of subsumed class positions associated with the state, merchants, financiers, landlords, managers and monopolies.
A class’s real power, over and above the sum of its members, is derived not just from common material interests, but from the class’s awareness of itself as a class engaged in struggle with other classes. In a sense, that class consciousness was what empowered the industrialists of the eighteenth and nineteenth centuries to defeat the landed aristocracy in Europe, and it will be what empowers the worker-proletariat to defeat the compradore capitalist ruling class presently.
2. THE DOMINATED CLASS
In the 21st. century, the working class includes industrial workers in transnational corporations as well as local small manufacturing enterprises (SMEs), share-riding drivers, hospital nurses and aides, baristas, warehouse workers, forwarders package handlers, teachers, engineers, research scientists, and I.T. people —alongside factory, construction and plantation workers and other incarcerated labour.
Small business owners – the petty bourgeoisie – is seen as a “middle” class, torn in their loyalty to the working class, which is closest to it in material conditions, or to the ruling class, to which it improbably aspires. Owners of small businesses and independent professionals may employ a handful of individual workers, whom they exploit by appropriating the surplus value of their labour in the same way that big corporations exploit workers.
At a time of post-pandemic more than ever, the working class is being squeezed financially where the costs of food, housing, health care and transportation are consuming ever larger shares of household budgets, and have risen faster than incomes even among the urban poors.
As an instance, the SME is still powerless compared to transnational and government-linked Big Business. Like the working class, it is vulnerable to the vagaries of the capitalist economy with its boom and bust phases. Small business owners are definitely hit hard in the current situation. About 15 per cent of micro, small, and medium-sized enterprises (MSME) are temporarily closed due to a lack of funds stemming from the pandemic, The Malaysian Insight reported in 4 Jan 2022.
According to the SME Association president, Ding Hong Sing, there are 1.15 million SMEs, which account for 97.2 per cent of businesses in Malaysia. Eighty per cent of them are in the service industry, and in 2020, this figure increased to 85.5 per cent. In 2019, SMEs contributed to 38.9 per cent or RM$553.5 billion of the GDP but this declined in 2020 to 38.2 per cent or RM$512.8 billion.
Also in terms of employment, SMEs are also hiring 48 per cent less. In 2020, SMEs employed 7.24 million people, 0.9 per cent less than the previous year, when they employed 7.32 million people.
The year-on-year decline shows SMEs have been definitely severely hit by the coronavirus Covid-19. Before 2020, the number of people employed increased by at least 3% or 200,000 a year. Add on to the employment profile is that any graduate entering into this sector often shall earn only RM$2,500/month (or even RM$2,100 according to JobStreet), barely a living wage working in urban towns.
3. THE LANDED CLASS
There is an established cadaster (an official register of the quantity, value, and ownership of real estate used in apportioning taxes) and a land registration system in the country.
With this system, however, the processes enable provision of land administration services to the property ruling class that with financialization capitalism in place with the Real Estate Investment Trust (REIT), has inadvertibly displaced the working class rakyat2 from an essential settled accommodation . The gap between wages and house prices in the country has steadily widened, too, and the ensuing urban poverty therein.
The UNICEF 2020 Report has shown that low income female-headed households are exceptionally vulnerable, with higher rates of unemployment at 32% compared to the total heads of households. Female headed households also registered lower rates of access to social protection, with 57% having no access compared to 52% of total heads of households.
The concurrent issue is the commodification of housing which constitutes the major barrier to its equitable distribution, with construction and allocation determined not by social need but by the accumulation of capital by real estate developers in the financialization in capitalism.
The Department of Statistics Malaysia (DOSM) had released figures to show that the average monthly salary and wage received by workers in the country was RM3,224 in 2019; a typical apartment in the Klang Valley is one hundred times say on this basic monthly salary. Presently, there is a total of about 10 million salary and wage recipients in Malaysia. The Household Income & Basic Amenities Survey Report 2019 by DOSM showed that the country’s 2019 median income of a household of four is RM5,873. This means it is sixty times of both parents’ monthly salaries to get a decent shelter.
Between 2010 and 2019, in the country, the average y-o-y height of increase in house prices was 7.9% surpassing income’s increment of only 5.6%.
Affordability was aggravated by the property hype during the 2010-to-2014 period, when property prices rose double digits annually — and peaked at 13.2% in 2012. The average annual appreciation for the 2012-to-2014 period was 11.2%. By 2021, the national median house price had increased by five per cent to RM 310,000. This represents a 96.2 per cent increase over the RM158,000 recorded in 2010.
According to Emir Research, it will take an average of 44 years to repay a housing mortage installment of a property valued at RM$400,000, (theSun, 15/08/2022). Further, according to the Bank Negara’s Financial Stability Review for the second half of 2021, only 35.6% of newly launched housing units since 2015 are priced below RM$300,000 whereas 76% of households earn less than the minimum RM$8333 a month to afford houses above this price. In fact, property prices have doubled every 10 years that account for a 400% increase every 20 years.
The real estate developers, consortium of property-speculators (including China-based real estate developers in Forest City and Princess Cove, Johore), REIT owners (like IGB REIT and Pavilion REIT) have cornered the property segment, through financialization capitalism, to entrench the landed class. It comes at a time when wages are stagnated over the years while house prices have surged forward. Indeed, the compound annual rate of growth for incomes and house prices (just during the 2014-2020 period) has increased disproportionally 2.1% and 4.1%, respectively.
These sobering realities pose another enormous challenge to rakyat2 enduring class struggle as their savings rate of 1.4% in 2013 is really razor-thin as reported by a Khazanah Research Institute (KRI) study in 2016, even at a time when there are (US$ 4.41 billion) unsold apartments in Malaysia’s major cities then.
Dr Mahathir once said that Malaysia today is not owned by the Bumiputeras because many Malays remain poor and they tend to sell their land – to the property class of real estate developers, including monopoly-capital TNCs, and REIT financial capitalists who are able to invest in quality large-scale commercial real estate without having to buy the properties directly and even at a lower price.
A solution to the wealthy rich holding on their landed properties is to address the housing needs of the impacted apart from the continued construction of houses that are far beyond the means of the average Malaysian working class, particularly the B40s through a rental model, (REFSA August 2022).
Applying Engels thesis, present real estate reality has little to do with a lack of housing stock, but instead, it is firmly rooted in the mode of capitalism itself, and the exploitation upon which the system hinged.
4. THE WEALTHY RICH
On April 29, 2022, it was reported that Fernandes – the CEO of Capital A, formerly known as AirAsia Group Bhd – received RM14,947,213 in addition to RM124,781 in allowances for meetings, travel and other matters. Kamarudin, the executive chairman of Capital A, meanwhile received RM14,051,429.
Takaful Malaysia CEO Mohamed Hassan Kamil’s income was equivalent to RM903,000 a month or RM10.84 million a year.
The chairman of BIMB Holdings earns RM375,000, while other Board members earn between RM375,000 and RM768,000 a year.
This thrust in the social hierarchy from a class of clientel capitalists is only reinforcing capitalism as the economic development agenda, and financialization capitalism as pathway in the country towards the widening accumulation of capital. The ensuing profit generated in companies, and the rent elements received by oligarchy individuals, inevitably perpetuate the extraction of outsized surplus values relative to capital “invested”.
From the British forward movement in colonialism to our present sluggish ruling regimes, capitalism is to insert clientel-capitalism to colonialise the minds of the unrepresented destitutes. It is to retain and sustain political power, immiserising countless land-settleless rakyat2 and urban destitutes. The capitalism in crisis would continue impoverishing the poors in order for capitalism, specifically ethnocapital clientel capitalism – with the political fabrication and construction that had rapidly metamorphosed into policy constructs in the 1970s (Lim Teck Ghee) ensuing as an economic entrenchment of the NEP construct (Woo 2015, James Chin 2016, KBN 2018, Khalid 2019, KRI 2020, Kua 2021 & Diam 2021) which clearly is divisive to the nation’s unity and sense of belonging – to exist and flourish. Often, the guided narrative is spritzered with the particular Sudhave’s burden of privilege under a clientele capitalism downpour.
Compounded by serial corruptive practices through the decades – from Perwaja to 1MDB – the wealthy rich has siphoned off national wealth to foreign countries: see the Panama Papers and Pandora Papers; specifically on Diam’s and Jho Low’s captured wealth. Sarawak Report has also recently revealed that a story slipped out in Switzerland has exposed how Malaysia’s coup coalition of present ruling regime had not only been negotiating to drop charges against Jho Low, but in return for RM$1.5 bn in cash, too.
5. THE POVERTY POORS
According to an Employees Provident Fund (EPF) annual report, the salary of the CEO and his deputies reached RM6.1 million a year or an average of almost RM130,000 per person or RM4,300 a day. Compared to their salaries with the 1 in 5 EPF contributors who have a savings of just RM7,000 in his/her account.
CEO at Sime Darby Plantations (SDP) his annual income was almost RM8 million a year. His income from being CEO there from 2011 to 2017 was RM64 million!
As an example, basing on a transnational corporation’s (TNC) food delivery service being paid RM$5 per hour and the minimum RM$3 per order, with 240 hours of work a month, a gig-rider woul get RM$1,200. If the person makes 260 deliveries, he/she will earn RM$780. The total gross earnings for the month would be RM$1980; in the Federal capital of Kuala Lumpur, a single person estimated monthly costs-of-living is RM$2,106 without rent!
In 2020, the Department of Statistics Malaysia (DOSM) indicated that there were almost four million people working in the gig economy in Malaysia; independent think-tank, Emir Research, confirmed about 26% of the Malaysian labour force were full-time gig workers, reaching 30% by 2021.
Data from the eKasih system indicated that as of July 31, 136,923 households were in the extreme poor category, while 308,699 were categorised as poor. However, the effects of the Covid-19 pandemic – which saw clientel capitalism colliding with the crisis – had caused the rate of absolute poverty to increase to 8.4% and extreme poverty to 1% in 2020 while generating 5 billionaires within a year and benefitting the Big Pharma. Also, to be reminded that the country’s relative poverty rate stood at 16.2% in 2020 which is high for a country “developing” since 1960s under a suite of neoliberalism-is-neoimperialism-regime.
On the World Bank Malaysia Economic Monitor, June 2022, it highlights the incompleteness of task ahead in the political-economic state of nation. Post-Covid 19 pandemic, there is a continuing, and an increased, vulnerability among affected Malaysian households and businesses, basically, the relatively high levels of household and corporate debt. This comes about partly because there is insufficient higher inflow of foreign direct investments to stimulate a laggard economy as was during the 1970s boom :
Foreign Direct Investment (FDI) in Malaysia registered higher net inflow of RM$48.1 billion in 2021 as compared to RM$13.3 billion in the previous year; the services sector, accounting for almost 43% of total FDI inflow followed by the manufacturing sector, which makes up less than 43% of total FDI inflow (theedgemarkets 4 March 2022).
Then, the reality of foreign direct investments has changed from importation of machineries to complete physical finished end-products to that of provision of soft elements in advisory or consultancy contents that requires less material and labour involvement.
With intermittently lockdowns under State of Emergency, political hucksters had only accentuated that wealth at the top of society, wallowing in ethnocapiral clientelship, ever more concentrated and consolidated. Whether it is installing lampposts following no open-tender procedure or by retaining the Jendela infrastructural platforms with broad exclusiveness or to fill the pockets of the chairperson and board members of FELDA Global Venture (FGV): the crisis in capitalism continues by cheating the Felda settlers again, seeSTORM, Felda to FGV: cultivators and capital.
2 POLICIES AND POLITICS
There is yet any defined – or executive determined – articulation of policies at this stage of economic recovery on ensuring sufficient social protection for lower-income groups to support an inclusive growth as rakyat2 have demanded, (GBM-CSO, Rakyat Manifesto 2021. The UNICEF 2020 Report had already indicated the persistence low income female-headed households are exceptionally vulnerable, with higher rates of unemployment at 32% compared to the total heads of households. Female headed households also registered lower rates of access to social protection, with 57% having no access compared to 52% of total heads of households.
It was reported recently that in the Federal Territories, at least 6,100 households are considered poor and 4,500 are hardcore poor, according to the National Poverty Data Bank System (eKasih). A poor household is one that earns less than RM$2,208 a month while the hardcore poor earns less than RM$1,169 monthly, (thestar, 4/04/2022). In fact, 20.0 per cent of households from the M40 group with income between RM4,850 and RM10,959 had dropped to the B40 group.
To be acknowledged that the national household debt-to-Gross Domestic Product (GDP) ratio had already surged to a new peak of 93.3% as at December 2020 from its previous record high of 87.5% in June 2020, according to Bank Negara Malaysia (BNM). The majority of urban low-income families are much more likely to be unemployed or have lower working hours with lower pay, and greater challenges in accessing healthcare.
The number of poor households had increased to 639.8 thousand households in 2020 as compared to 405.4 thousand households in 2019. Further, the incidence of absolute poverty had also increased from 5.6 per cent (2019) to 8.4 per cent. Source: Department of Statistics, Malaysia, August 2021.
The second economic problems – even after +60 years of neocolonial economic development – that there are states, namely Kedah, Perlis, Kelantan, Sabah, and Sarawak, with the lowest average income and highest incidences of poverty, (World Bank Press Report“Catching Up: Inclusive Recovery & Growth for Lagging States”).
This uneven spatial economic landscape is the hallmark of development of underdevelopment much acutely felt in Sarawak and Sabah, even though “by allocating at least 50 percent of the government’s basic development expenditure, such as the construction of schools, hospitals, and roads,” as said by Dato’ Sri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy), these twin states are still lagging well behind since their incorporation into the formation of Malaysia in 1963. In 2020, the East Malaysian state of Sabah had the highest rate of poverty in Malaysia, with 25.3 percent of the population living below the poverty line. Sarawak is ranked third in having the highest number of poor families among all the states in Malaysia, despite Sarawak government’s reserves of RM$31 billion, whereby Sarawak is ‘a rich state with poor people’.
The third problem, inherent to weakened governance, lies with politicians being too fetish eye on their electoral fortunes and their endowed, and enduring, largess as parliamentary representatives. The third Prime Minister – post GE14 – Ismail Sabri Yaakob’s government is more focused on perpetuating its time in (and benefits therefrom) office, (Bridget Welsh, June 2022). It seems that there is little stomach for needed policy reviews and interventions, except an appetite to witness, hear and view the gouging of national assets by a past premier passing times :
That capitalism fails as a good model is evidently clear that in capitalism, it is not about human development but privately accumulated profits by a tiny minority of the population. The most important implication, in our country, is that although the middle 40 per cent and the bottom 50 per cent have had benefited in some ways from economic growth, the Bumiputera in the top income groups (the top 1 per cent and the 10 per cent) benefited the most, (seeKhalid lse.blog, 2019) 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 which – in the pursuance of capital accumulation – has aligned with monopoly-capital to exploit the nation’s resources, and to dash her economic development potentialities: from the early days of the Development Advisory Service Harvard (DASH) to the present Google/Microsoft alliance in the design, development and deployment of infrastructural platforms henceforth.
This thrust in the social hierarchy from a class of clientel capitalists is to reinforce capitalism as the economic development agenda, and financialization capitalism as pathway towards the widening accumulation of capital. The ensuing profit generated in companies, and the rent elements received by oligarchy individuals, inevitably perpetuate the extraction of outsized surplus values relative to capital “invested”.
Thus, it is not surprising that the absolute gap across income groups in Malaysia has increased, contributing to widespread perceptions of the poor being left behind: The top 20% of population – the T20 – possess 46.2% of the nationalincome share, while M40 have 37.4% of the national income share but the bottom 40% of population – the B40 – only get 16.4% of the national income share of wealth; seeKhalid 2019.
The present unpleasantness on uneven economic development and unequal sharing of a common wealth owes, therefore, on one part to clientel capitalism (seeJames Chin, The Costs of Malay Supremacy, New York Times, Aug. 27, 2015) and, on another part, to the Burden of Privilege on the Malaysian Economy as articulated by Sudhave in 2021. This is correlated to the prematurely de-industrialisation in the 1990s. Deindustrialisation happens when there is a reduction in industrial activity or capacity, which Dr Jayant Menon – an Asian Development Bank (ADB) economist – said it was too early for Malaysia to have turned a major shift from manufacturing to the FIRE services (Finance, Insurance, Real Estates) because its manufacturing sector has yet to mature to a point where it could possibly achieve an advanced level of technological sophistication, and an educational ecosystem to support, and absolve to apply – with talented manpower – a transfer of technology strategy. The scarcity – and even inappropriateness of the national education system – of skilled workers have also been identified prevously, and in the present World Bank Report: one major impediment faced by these states is their lower levels of human capital development.……(whence) in the longer term, broadening access to quality education and skills training would raise the quality of human capital.
Throughout the1960-1970 era, the international concentration of capital invertibly had given birth to international monopoly-finance capital that ensues the emergence of financialization capitalism (seeJohn Bellamy Foster, The Financialization of Accumulation, Monthly Review vol:62, issue 05 October 2010). Financialization capitalism becomes prominent because the transnational corporations (TNCs) were unable to find sufficient investment outlets for their huge economic surpluses from production, increasingly turn to speculation within the global financial sphere, (seeJohn Bellamy Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009). Local capitalists were mersimerised, and so entrapped by financialisation capitalism attributes, especially in property development with its real estates investment trust (REIT) that even households had become financialized, (seeCostas Lapavitsas, Financialised Capitalism: Crisis and Financial Expropriation, Historical Materialism 17 (2009), School of Oriental and African Studies, London and Costas Lapavitsas, The Era of Financialization, Part 3, TripleCrisis). In the country, financialization capitalism is engaging – and entangling – the political economy of Malaysia even during a Covid19 pandemic when such mode of capitalism is as contiguousas the virus itself.
It is capitalism – not competition between Malays and the other races – that is the source of our grave political-economic problems. The ethos of capitalism – from the forward movement during British colonialism to our present sluggish ruling regimes – is to insert clientel-capitalism to colonialise the minds of the unrepresented destitutes. This is capitalism at its heights to retain and sustain political power, immiserising countless land-settleless rakyat2 and urban destitutes. The capitalism in crisis would continue impoverishing the poors in order for capitalism, specifically ethnocapital clientel capitalism – with the political fabrication and construction that had rapidly metamorphosed into policy constructs in the 1970s (Lim Teck Ghee) ensuing as an economic entrenchment of the NEP construct (Woo 2015, James Chin 2016, KBN 2018, Khalid 2019, KRI 2020, Kua 2021 & Diam 2021) which clearly is divisive to the nation’s unity and sense of belonging – to exist and flourish.
Dr. Rashed Mustafa Sarwar, Representative for UNICEF in Malaysia, had once said the country must and should take opportunities created by the budget and within the 12th Malaysia Plan to rethink social protection in Malaysia “to ensure that no family, and no child, is left behind” (seeTowards A Post-2020 Political Economy; REFSA April 2021; blogs.World Bank 2021; PSM 2021, For a better Malaysia; Re-examining Urban Poverty: 2-hour webinar organised by the Center for Market Education, Embassy of Belgium and Bait Al Amanah, KualaLumpur, 15/4/2021) and to better resolve the multidimensional multi-ethnic problems in the country.
Malaysia is at a crossroad in its politico-economic path. With fractious politics and a shrinking middle class, socio-economic conditions could become even more precarious because of the imminent stagflation risk arising amid sharp slowdown in growth accompanying accelerated inflation, (World Bank, Global Economic Prospects, June 7, 2022).
Malaysia ambition to become a leading edge in competitiveness is now well blunted with a stagnated economy, (Sudhdave 2020); that the economy direction needs to be changed, (Kamal Salih, 01/06/2022) because the Vision 2020 is already blinded, and betrayed (Jomo, 10/12/2020).
Since the premature de-industrialisation beginning in 1990s, and the insurgence of financialization capitalism with state-incorporated capital in GLCs (government-linked companies) as majority intermediaries in the transnational corporations (TNCs) global monopoly-capital supply chain, there is a change from the export-oriented anchor to one of domestic-generated economy where domestic demand growing – since 2011- at a compounded annual growth rate of 9.1%, contributing a significant 74% of GDP growth. With this economic development approach, the state corporations have enthrusted with, and encasted in, rentier capitalism being pervasive in the economic activities of compradore capital enterprises.
The circuitry of capitalism is facilitated with GLCs and or local compradore capital as the intermediary to collude and conclude transactions between monopoly-capital of the Global North and the nation’s ethnocapital as representative in the Global South.
Ethnocapital is a (malay) bumiputra owned and controlled entity performing under a rentier or clientel capitalism as a public agency, a government-linked company (GLC) or as a government-linked investment corporation (GLIC), and it can also be a privatised and or commercial enterprise like Pharmanagia or a telecommunications service provider like TM, the digital knight as an intermediary to the throne of Global North-dominated infrastructural platforms.
Capitalism is driven by the determined goal of enterprises for ever-greater accumulation of capital through an increase in the value and a return on that investment, whether as or part of appreciation, rent, capital gains or interest.
2. CONSEQUENCY OF COMPRADORE CAPITAL WITH MONOPOLY CAPITAL
The principles of economic development includes a theory of value and distribution and a theory of accumulation on a world scale. Emmanuel’s theory of unequal exchange has explained the general character of the process of uneven development of the capitalist countries and backward economies which surround the capitalist world. In this way, Emmanuel’s theory of unequal exchange as inseparably linked to the original economic insights of Prebish, Singer, Lewis and Baron on trade and development.
It is “by transferring through non-equivalent exchange, a large part of its surplus to the rich countries, the periphery deprives itself of the means of accumulation and growth.” Thus, an important implication of Emmanuel’s Unequal Exchange theory – in the application of unequal exchange characterises the trade relation between the centre (Global North) and periphery (Global South consisting of developing countries or newly emerging countries) – that a widening wage gap leads to a deterioration of the periphery’s terms of trade, and a subsequent reduction in its rate of economic growth.
Broadly, the unequal exchange occurs due to differences in the organic composition of capital. This type of unequal exchange can also exist within a country if there are differences in the organic composites of capital among sectors. In Malaysia case, the share of the TNCs together with the political-endowed clientelship in GLCS constitute the major ownership and control of a national economy. This block of capital, the likes of Digi, Nestles and British American Tobacco are, by market capitalisation, leading the list of foreign companies that dominate local businesses nowadays, seeSTORM 2021, Dominance of Financial-Monopoly Capitalism, whereas the GLCs and GLICs (government-linked investment corporations) controlled 68% of the Kuala Luimpur Stock Exchange: commanding more than RM$440billion in total assets. Further, this overwhelming overall control of government agencies and state corporations is connected to the Prime Minister Department and the Ministry of Finance :
The second premise of uneven, and unequal, economic development, rests on ‘the inequality of wages as such, all other things being equal, is alone the cause of the inequality of exchange.’
In a world capitalist system consisting of the centre (A) and periphery (B) consisting of collaborating partners, unequal exchange is defined as the difference (d) between the Marxist product prices and values:
di = Pi – ti ; i = A, B
A positive ‘d’ denotes a surplus gain for exporters, while a negative ‘d’ denotes a surplus loss.
If there is a surplus extracted, thus a surplus loss because
(i) owing to international capital mobility, there exists a single worldwide profit rate;
(ii) owing to immobility of labour from the periphery to the centre, there exists a wage gap between the two areas.
(iii) The wage rate is an independent variate.
Based on these assumptions, that unequal exchange depends on a country’s rate of surplus value and on its organic composition of capital (that is, the ratio of fixed to variable capital):
machinery used in production would be considered fixed capital; whereas variable capital is the cost and level of which change over time, andwith the scale of a company’s output.
Three Definitions:
.
To reinterate, there will be surplus gain through trade where the world average rate of surplus value exceeds the individual rate.
The periphery (countries in the Global South) tends to transfer surplus through trade because its rate of surplus value is higher than the world average due to an international wage gap, which favours workers in the centre (the Global North). Therefore, even if the organic composites of capital are equalised, unequal exchange results from the existence of a wage gap between the centre and the periphery.
This gets reflected in the fact that the rate of surplus value is lower in the centre (due to higher wage) than is the periphery (where the wage rate is much lower) as the rate of surplus value can be expressed as
where, w = the wage rate, q = output, w = wL = total wage bill, p = price of product. Here we derive that 1 unit of labour is required to produce 1 unit of output therefore q = L. Thus we get
This is visualised demonstratively by the presentation of wage component of an earlier generation of a Apple’s manufacture as:
where labour cost in China is one-quarter of US labour cost, and constitutes just 1.6% of product sales price.
The high profit margin is due to the gain associated in the global value chain process, see STORM, GLOBAL LABOUR ARBITRAGE IN GLOBAL VALUE CHAINS, 6th June, 2021.
The third element lies in the fact that not only considerable profit margins for the transnational corporations leading to the amassing of wealth in the Global North centre in a transactional unequal exchange process of profiting through and by sheer exploitation of resources, but also a reality that it is not uncommon for TNCs to advocate alternative assembly sites or state departure from invested country. Indeed, recently Apple had asked its major suppliers to evaluate the cost implications of shifting 15-30% of their production capacity from China to Southeast Asia as reported by Li, K, and T Cheng , “Apple weighs 15%-30% capacity shift out of China amid trade war”, Nikkei Asian Review, 19 June, 2019, and also due to the changing dynamics of global value chain analysis as illustrated by Yuqing Xing in Decoding China’s Export Miracle, April 2021.
The fourth factor is that contemporary imperialism has a new face and direction (Suwandi, Jonna and Foster, 2019) with global monopolies capturing the value generated by labour in the periphery on an unequal exchange basis. Labour has to be organised to fight for its rights; read further : STORM, UNEQUAL BASKING IN UNION BUSTING, 1st June, 2021.
The fifth dynamics are the employment, and the related labour productivity factors that have contributed to capitalism dilemma, and the continuing clientel capitalism crisis which has a class-based narrative within.
Increasingly, as the national economy is dependent on its domestic productions, duly the circuitry of capital is now tightly linked to GLCs’ appropriate performance. The acute processes demanded is connected tightly to their supply chains of transnational corporations’ monopoly-capital. On one side, MIDA (the Malaysia Investment Development Authority) has noted that foreign direct investments (FDI) 2021 contributed RM27.8 billion (65%) of total approved investments, while domestic direct investments (DDI) accounted for RM$15 billion (35%); the top five sources of FDIs are Germany (RM$8.9 billion), followed by Brunei (RM$5.1 billion), the US (RM$3.9 billion), Hong Kong (RM$3.3 billion) and Japan (RM$3.2 billion); the latter had decreased substantially since the 1970s, (theedgemarkets 14/06/2022).
However, the approved investments for this period have created only 24,906 new jobs in the country not unlike in the 1970s industrialisation initiatives that the uneven labour employment as can be seen in 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).
Furthermore, it has to be said often than not, there is this ‘stalling’ effect – when there might be MOUs between enterprises but no ramping up or even the temporarily or complete closure of factories – of the many Malaysian industrial projects that could have weakened workers employment, (Jeffrey Henderson et. al., Capitalism and Industrialization in Malaysia in Economy and Society, Volume 36, 2007 – Issue 1).
Then, the issue of unemployment, or even the contending issue of ‘unemployables’ due to graduad mismatched between educational institutions and the private sector. Already the civil service is stuffed with unproductive staff especially as it constitutes 1 in 5 labour in the country.
The various World Bank, IMF and UNICEF reports have dissected the various inadequacies in the labour market to which, on a refreshing, here are those persistent problems:
i) Compared to many other countries that have graduated from middle-income status, Malaysia has a lower share of employment at high skill levels and higher levels of inequality;
ii) There is a growing sense that despite economic growth, the aspirations of Malaysia’s middle-class are not being met and that the economy did not produced enough well-paying and sufficient high-quality jobs. There is a widespread sense that the proceeds of growth have not been equitably shared and that increases in the cost-of-living are outstripping incomes, especially in urban areas, where three-fourths of Malaysians reside. The UNICEF 2020 Report has shown that low income female-headed households are exceptionally vulnerable;
iii) The country shall, increasingly, need to depend upon more knowledge-intensive and productivity-driven growth, closer to the technological frontier and with a greater emphasis on achieving inclusive and sustainable development;
iv) 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;
v) 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.
[ Key issues towards higher growth rate may be previewed in a STORM, May 2021 paper ]
There is emerging discourse on a sixth dimension that was not pointed out during the covid-19 pandemic because of then extraordinary implementation of ordnanced lock-downs that limited young Malaysians seeking for jobs (and even among migrant labour).
This, along with a number of public policy presentations, indicates that many governments did not conduct the costs and benefits analysis before imposing lockdowns upon the general population and closing of the economy: what were the collateral health effects from a lockdown?, and the related question of what would be the financial effects to families? and, also whar are the aggregate economic effects of such lockdowns? All these uncertainties appear to have not been examined appropriately, and again, appeared to have been even neglected by relevant financial institutions and other government agencies during the three succeeding governments, post-Sheraton (ISEAS, April 27, 2022) political maneuvers (Asia Times, February 24, 2021).
3. UNEQUAL EXCHANGE UNEVEN DEVELOPMENT
The consequences are that the Malaysian economy is in a bad shape and rakyat2 are understandably seeking solutions. Many, confrounded by capitalism crisis after crisis to believe succeeding ruling regimes’ policies through the last six decades had not completely execute the recommended proposals – even by such neoliberal entities consultancy like the Development Advisory Service Harvard (DASH) or the World Bamk/IMF twin – that structural decadence in our economy not only remains, but persisted.
On one plane, taking a flight to financialization capitalism had enabled a core of rentier capital to suck in the FIRE (extracting inappropriate surplus values from working rakyat2 through financial interests, insurance premiums and real-estate amortisations). It also signifies, unequivocally, that this clientel capital cohort are maximising capital accumumulation through a hive of rent-seeking economic activities across various sectors of the economy – from plantations to petroleum, (STORM, Rentier Capitalism in Accumulation, 22/01/2021).
Then, to the despaired disadvantages of Malaysian workers, is the role of clientelship capitalism that had inserted into the monopoly-capital supply chain in an age of new economic imperialism, (Suwandi, 2018). Corporate capital in the small manufacturing enterprises (SMEs) collaborates with Global North to tighten the commodity supply chain with monopoly-capital with M&E vendors like AIDA, SKF, Cohu, VAT, Oerlikon Balzers, Favelle Favco, Bromma, Vitrox, etc. The recent banning of unprocessed chickens to Singapore, but later the embargo was lifted only points to the vested and connected supply chains of clientelship in the ethnocapital political-economy. Similar incidents, in the past and presently, on the import of halal beef also displayed the close collusion between clientel capitalism and monopoly-capital in their corrupted collaboration to extract surplus value.
Succeeding oligarchy regimes had continued maintaining a clientel ethnocapitalism domitnation over the working class rakyat2 with 1% of the bumiputera population (seeKhalid lse.blog, 2019) 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 which – in the pursuance of capitalism expropriation – has aligned with monopoly-capital to exploit the nation’s resources, and to underdevelop her economic development potentialities.
Rentier capitalism, therefore needs be underscored 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.The central outcome of such rentier capitalism is introduction of economic inequality and injustice in the country thus deepening the class power struggle within.
In a sense, the ruling class is part of a kleptocractic governance. An ethnocratic governance is where representatives of an ethnic group is holding a disproportionately large number of public posts to advance their ethnic group to the disfranchisement of others, (see Winter, J.A., Oligarchy, Cambridge University Press, 2011 and Wade, G., The Origins and Evolution of Ethnocracy in Malaysia, Asia Research Institute, National University of Singapore, Working Paper Series 112, April 2009).
Oligarchy in Malaysia consists of wealthy individuals and unmeritorious groups with political influence and/or economic power who construct public policies primarily to benefit themselves financially whether through direct subsidies to their agricultural estates (for examples, FGVH and Rimbunan Hijau, Cahaya Mata Sarawak Berhad), business firms (YTL, NAZA, the Petra Group and Ananda Krishnan conglomerates), lucrative government contracts (UEM-Sunrise, Gamuda), and protectionist measures (as Sapura-Kencana in the oil and gas sector) while displaying no concern for the marginalized Malaysian.
They – as conduits to Global North monopoly-capital and intermediaries to compradore capital varied supply chains – are pure and unadulterated rentier capitalists.
The rentier capitalism ecosystem is dominated by a few wealthy companies and individuals with amble access to key scarce assets (such as land, natural resources, financial means, licences, intellectual properties and digital platforms) and, in doing so, siphoning national wealth without societal care nor contributions to rakyat2 wholesome wellbeing.
In reality, Global North monopoly-capital investment in Global South is little more than a collaborating strategy for profiting on planetary destruction.
1] BACKGROUND
A company known as Lynas Corporation – an Australian entity – is operating the world’s largest rare earth extraction plant with a planned capacity of 22,000 tonnes per annum in Gebeng (Lynas Corporation, Annual Report 2011), near to the half a million populated Kuantan metropolitan township in the east coastal plain of Peninsular Malaysia. Lynas Corporation entry into this holiday resort town with pristine beaches facing the South China Sea is backed by the state government of Pahang of which Kuantan is the capital city.
The Corporation had claimed that its US$800 million Lynas Advanced Materials Plant (LAMP) is not a threat to public health because the raw material that would be shipped from Mount Weld in Western Australia to be processed in Gebeng shall emit very low levels of radioactivity. Further, it had also claimed that the wastes generated could be processed and disposed of safely; and that the economic benefits to Malaysia generated by the rare earth extraction plant would be substantial, too.
Rare earth metals like dysprosium and terbium play a critical role in defense, technology and consumer products. Neodymium and praseodymium are some of the most sought-after light rare earth elements crucial in products such as motors, turbines and medical devices. Rare-earth elements (REE) are necessary components of more than 200 products such as cellular telephones, computer hard drives, electric and hybrid vehicles, and flat-screen monitors and televisions; significant defense applications include electronic displays, guidance systems, lasers, and radar and sonar systems. China produces more than 99 percent of the world’s supply of dysprosium and terbium where these two rare minerals were the essential elements to recent breakthroughs in the high-technology industries.
Neodymium is rare-earth magnets. These neodymium magnets larger than a few cubic centimeters are strong enough to cause injuries to body parts pinched between two magnets, or a magnet and a ferrous metal surface, even causing broken bones. The stronger magnetic fields can be hazardous to mechanical and electronic devices, as they can erase magnetic media such as floppy disks and credit cards, and magnetize watches and the shadow masks of CRT type monitors at a greater distance than other types of magnet. In some cases, chipped magnets can act as a fire hazard as they come together, sending sparks flying as if they were a lighter flint, because some neodymium magnets contain ferrocerium.
Australia holds the sixth largest-known rare earths reserves in the world, and is poised to increase its output. Lynas (ASX:LYC,OTC Pink:LYSCF) operates the Mount Weld mine and concentration plant in the country, and it recently announced plans to boost production to 10,500 tonnes per year of neodymium-praseodymium products by 2025.
Whereas, Northern Minerals (ASX:NTU) opened Australia’s first heavy rare earths mine in 2018. Its main products are terbium and dysprosium which is used as permanent magnets.
As of 2020, China produced a 57.6 percent share of the total global rare earth mine production, making it by far the world’s largest rare earth producer, followed by the United States 15.63%, Burma 12.34%, Australia 6.99%, Madagascar 3.39% with the following selected countries sharing global production of less than 2% each: India, Russia, Thailand, Brazil, Vietnam, Burundi.
2] THE ECOLOGICALDIMENSIONS
Inherent to capitalism is inequality, social exclusion and environmental degradation by abuses to the soil as much as it exploits the worker.
As a country case example, by the time the Mamut Mine Sabah ceased operation, the mine had generated about 250 Mt of overburden and waste rocks and over 150 Mt of tailings, which were deposited at the 397-hactre Lohan tailings storage facility, 15.8 km from the mine and 980 m lower in altitude. This site has then presented challenges for environmental rehabilitation due to the presence of large volumes of sulphidic minerals wastes, the very high rainfall and the large volume of polluted mine pit water, see Antony van der Ent et al., Environmental geochemistry of the abandoned Mamut Copper Mine (Sabah) Malaysia,Environ Geochem Health, February, 2018.
On another instance, while this Lynas site construction has generated much anxiety and fear in the country because of possible major unhealthly environmental effect, these symptoms are not unfounded. This is because an earlier rare earth plant located at Bukit Merah, in the western region of Peninsular Malaysia, was shut down after negative health effects on plant workers and nearby residents became apparent when environmental radioactive contamination was detected; indeed, the clean-up operations are still continuing to this day in the Bukit Merah Asian Rare Earth vicinity, (Consumers Association of Penang; NYTimes, March 9, 2011), where more than RM$300 million were expended to move 11,000 truckloads of radioactive waste, including old containers dug up from 25 f eet deep contaminated land.
Thus, the Lynas Gebeng monopoly-capital venture is perceived by rakyat2 to introduce similar unfavourable environmental surroundings degradation, unhealthy effect upon the communities and the uncertainty of commercial impact on the local economy once the plant ramps up its operation.
Marx and Engels understood that the relationship between man and nature is one of interdependence as opposed to domination. This interdependence relates to Marx’s Metabolic Rift theory which is expanded by Foster (1999) where the dynamics between humans and non-humans in the natural world are distinct entities but are united within one metabolic system. In this metabolic system, energy is transferred and the rift – capitalism – inefficiently takes energy to turn into a monetary capitalistic expansion.
Since the accumulation of capital is paramount to the owners of capital, their prime objective is to obtain their returns of investment within a short period so they can accumulate profits faster. As a result, investors do not consider long term impacts of their actions on the environment nor the biosphere.
“Nature is the proof of dialectics, and it must be said for modern science that it has furnished this proof with very rich materials increasing daily”.
For Marx and Engels, the materialist conception of nature and the materialist conception of history were reflexively connected, just as the alienation of nature and the alienation of labour were.
Victorian novelist and philosopher William Morris critiqued the capitalism rapacious destruction of forests, depletion of soil nutrients and pollution of the air and rivers unbalancing the metabolism of nature with unknown consequences.
In the late 19th century, Lankester – as pointed out in The Return of Nature: Socialism and Ecology, by John Bellamy Foster, Monthly Review Press, 2020 – emphasized that humanity was walking on an ecological knife’s edge living in a society dominated by pursuit of short-term profit, capitalist expansion, and with power concentrated in increasingly fewer hands (beholding to clientel capital for instance) that are incapable of balancing the needs of profit with the genuine needs of society as a whole.
During the 1980s, ecosocialism works of the New Left, including British sociologist Ted Benton and French social philosopher André Gorz employing the ecologism of Green theory to criticize Marx for allegedly failing to address the questions of sustainability. Marxian ecological theory has emphasised on unequal ecological exchange or ecological imperialism by which one country can ecologically exploit another. Indeed, other Marxian theorists, in recent years, have extended this analysis of ecological imperialism as an integral approach to address the ecological problem, (Marx, Capital, vol. 1, 860; Foster, Clark, and York, The Ecological Rift, 345–72).
Present Ecological-Epidemiological-Economic crises can be related to “the global ecological rift,” where the disruption and destabilization of the human relationship to nature on a planetary scale, emerging from the process of capital accumulation without end, (Foster, Clark, and York, The Ecological Rift, 14–15, 18). In The Return of Nature,op.cit. , Foster has explored how socialist analysts and materialist scientists of various disciplines, first in Britain, then the United States, from William Morris and Frederick Engels to Joseph Needham, Rachel Carson, and Stephen Jay Gould, sought to develop a dialectical naturalism, rooted in a critique of capitalism. In the process, Forster delivers a far-reaching and the fascinating exploration in reinterpretation of the radical and socialist origins of ecology.
This argument is reinforced by Japanese Marxist-author, Kohei Saito who has ince shown from researching on Marx-Engels Gesamtausgabe (MEGA) Volume IV/18, that the nature-human interaction and Marx pointed critique of the ecological harm produced by capital accumulation. This concept of ‘metabolic rift’ (Stoffwechsel) lies in the understanding on circulation of soil nutrients between countryside and town thereby contributing to human disharmonies from the natural world, (Kohei Saito).
The totality of ecological Marxism in China as explained by Zhihe Wang and expanded by Zhihe Wang, Huili He and Meijun Fan; and the extension to Iran with Persi interest on John Bellamy Foster’s The Ecological Revolution: Making Peace with the Planet bear witness to rising consciousness of preserving Mother Earth.
It is in this context that Marx’s central concepts of the “universal metabolism of nature,” “social metabolism,” and the metabolic “rift” have come to define his critical-ecological worldview, (Karl Marx, Capital, vol. 3, London: Penguin, 1981), 949; Marx and Engels, Collected Works, vol. 30, 54–66).
To be clear, the by-product of the rare earth wastes produced will be in huge amounts of radioactive material such as thorium and uranium. These elements will be a grave threat to health depending on the “dose-response relationship” (that is, the greater the exposure to ionizing radiation, the greater the damage to the human body) that depends upon exposure to unnecessary radiation. It has also be emphatically stated, too, that the methods of waste processing and disposal as proposed initially by Lynas Corporation were unsafe and socially irresponsible.
Baotou is the biggest rare earth production area in China which supplies about 60% of rare earth of the world. This site was blamed to have caused high level of radioactive in the soil and water around the area (as reported by The Star 2nd May 2011, page W32).
In 2018, Lynas operations had already produced radioactive Water Leached Purification Residue (WLP) totalling 451,564 metric tonnes, and Neutralization Underflow Residue (NUF) totalling 1.113 million metric tonnes are rare earth left-over compounds. WLP residues are radioactive because hey retain radioactive elements like thorium which occur naturally in the crude lanthanide ores that Lynas imports from Australia.
It prompted the then Harapan Rakyat government Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin an ultimatum for Lynas to remove radioactive waste or risk losing the renewal of its permit to operate in the country by the September 2019 deadline. She further reiterated the removal of waste is now necessary because there were reported leakages of heavy metals into Kuantan’s underground waters — and that there is presently “no near-term solution” on this recurring matter, (Sobahan et. al., ICCAE, May 6-7, 2013).
Lynas Malaysia Sdn Bhd had since produced more quantity of WLP by the following year; 637,581 tonnes of water leached purification (WLP) radioactive residue as at Sept 24, 2019, up from 451,564 tonnes in December 2018; non-radioactive scheduled waste disposal neutralization underflow residue (NUF) stood at 1.08 million tonnes as at Sept 24th. 2019 down from 1.113 million tonnes as reported in December 2012.
There is a need in further understanding of the toxicity of WLP. On the international standards recommended alternatives to manage radioactive waste before disposal, the International Atomic Energy Agency (IAEA) has recommendations to be taken in the following order: reduce, reuse, recycle, and finally, dispose. However, since Lynas started operations in 2012, a permanent disposal facility (PDF) has never been the company’s first choice. Instead, it preferred to reuse or recycle its WLP. Therefore, right up till 2018, Lynas had been developing ways to recycle WLP residue. The company sponsored local researchers to test the potential for WLP residue in agricultural use, but these studies failed to convince an executive committee appointed in 2018 by the then Pakatan Harapan government to evaluate Lynas operations. The committee instead recommended Lynas immediatelyto build a disposal facility for the WLP residue.
Towards a fairer assessment, it must also be said that Lynas reported that workers handling WLP residue are exposed to less than 0.62 millisieverts (mSv) radiation a year, well below the 20-mSv threshold advised by the IAEA. Also, Dr Ng Kwan Hoong, a medical physicist at the University of Malaya and who is independent of Lynas, had said in a science article that such low doses of radiation produce “negligible” health effects. AELB further reported that radiation levels in and around the Lynas facility were always within the safety threshold as advised by the IAEA.
The Lynas Radioactive Residue
Curated scientific papers, accessing to the Parliamentary Reports as submitted by the Malaysian Medical Association on the Health Concerns in regard to LAMP, Seng How Kuan and Phua et al respective works, it has to be expressed that any waste exhibiting the characteristics of ignitability, corrosivity, reactivity or toxicity is considered as hazardous. Organic compounds (for example: cyanide, paint, dye, pesticide, pharmaceutical waste) and heavy metals (for example: mercury, arsenic, lead, chromium, thorium, uranium) are the two major types of hazardous wastes (Polprasert C, Liyanage LRJ (1996) Hazardous waste generation and processing.Resources, Conservation and Recycling 16: 213-226).
The uranium (U) is a radioactive heavy metal, which may occur in different oxidation states. The most stable state is the hexavalent state, which is easily soluble in water and found as the uranyl ion (UO22+). The high toxicity of hexavalent U compounds is correlated to their solubility. Uranyl ion can also form complex with other anions like bicarbonate, citrate, phosphate or proteins in the biological system ),(Bosshard E, Zimmerli B, Schlatter C (1992) Uranium in the diet: risk assessment of its nephron- and radiotoxicity, Chemosphere 24: 309-321).
Further, it has to be informed that uranium is known as an alpha-emitting radionuclide and may cause deoxyribonucleic acid (DNA) damage if alpha particles reach cell nuclei (Melo D, Burkart W (2011) Uranium: environmental pollution and health effects. In J Nriagu (ed.) Encyclopedia of environmental health. New York: Elsevier Science. Pp. 526-533). Also, among the various possible modes of Uranium intake, for example: inhalation, ingestion and through wounds, inhalation of dust in workplaces is considered the main Uranium intake pathway. In our biological system, kidney and bone seem to be the most sensitive targets for Uranium toxicosis.
There are also reports relating to children (before their 5 years-of-age) diagnosed with brain cancer states that there is an increased risk for mothers living within 1 mile of Toxics Release Inventory facility or carcinogens releasing facility during their pregnancy compared to mothers living more than 1 mile from these facilities (De Rosa CT, Fay M, Keith LS, Mumtaz MM, Pohl HR, Hatcher MT, Hicks HE, Holler J, Ruiz P, Johson BL (2008) Hazardous wastes in K Heggenhougen and SR Quah (eds). International Encylopedia of Public Health, New York: Academic Press, pp. 107-121.Choi HS, Shim YK, Kaye WE, Ryan PB: Potential residential exposure to toxics release inventory chemicals during pregnancy and childhood brain cancer.Environ Health Perspect2006; 114;(7.);1113-8).
Studies of thorium workers have also shown that inhaling thorium dust (a radioactive metal) have higher chances of developing lung or pancreatic cancer many years after being exposed (Gad SC (2005) Thorium and thorium dioxide in B Anderson, A de Peyster, SC Gad, PJB Hakkinen, M Kamrin, B Locey, HM Mehendale, C Pope, L Shugart and P Wexler (eds.) 2nd ed. Encyclopedia of Toxicology. Volume 4. New York: Academic Press, pp. 183-184. It is also a known fact that prenatal exposure to chemicals like polychlorinated biphenyl (PCB) has a negative impact on neurodevelopment of age groups ranging from infants to preteens (De Rosa CT et al, op.cit., 2008).
More so, as alluded to China’s Wang Caifeng, the Deputy-Director of the Materials Department of the Ministry of Industry and Information Technology, that “Every ton of rare earth produced generates approximately 8.5 kilograms (18.7 lbs of) of fluorine and 13 kilograms (28.7 lbs) of dust; and using concentrated sulfuric acid high temperature calcination techniques to produce approximately one ton of calcined rare earth ore generates 9,600 to 12,000 cubic meters … of waste gas containing dust concentrate, hydrofluoric acid, wastewater plus one ton of radioactive waste residue (containing water)” . In fact, 2,000 tons of mine tailings (which contain radioactive material such as thorium) are created for every ton of rare earth elements extracted, (Hurst C., The rare earth dilemma: China’s rare earth environmental and safety nightmare, Cutting Edge, November 10, 2010).
The capacity of the Lynas plant in Gebeng is ten times the size of the earlier rare earth plant that was built in Bukit Merah, Perak state, and subsequently shut down because of public health and environmental concerns. Thus, the volume of hazardous and radioactive wastes (containing thorium and uranium) that will be produced in Gebeng will be most likely correspondingly higher. Furthermore, the fact that the Lynas plant is sited in an area susceptible to flooding – the construction site actually flooded during the late year annual monsoon season of 2011-2012 – and its proximity to Balok River and the South China Sea where there are fishing villages does little to alleviate the fears of residents in the Kuantan metropolitan area.
This is exceptionally of great concern because after the rare earth extraction, the supposedly “low level radioactive” wastes from flue gas desulfurization (FGD), neutralization underflow (NUF) and water leach purification (WLP) would nevertheless be produced in huge amounts of radioactive thorium and uranium because of the size of the plant, (reference: Lynas Corporation (2011) Lynas-SHE-R-043 Radioactive Waste Management Plan Rev 4).
The demands for a society dedicated to need rather than profit and to human equality and solidarity have long been associated with socialism Marx’s thought, showing how he brought an environmental perspective to bear on the overarching question of social transformation.
Consequently, socialist thinkers have given equal importance to ecological sustainability, building on Karl Marx’s environmental critique of capitalism and his pioneering vision of sustainable human development (see Paul Burkett, “Marx’s Vision of Sustainable Human Development,” Monthly Review 57, no. 5 (October 2005): 34-62.
3] THE RENTIER CAPITALISM CLASS
Ecological sustainability rests upon the politico-economic construct of rentier capitalism where clientel capital, as a component of corporate capital, is part of political clientelism that 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). Further, clientelism is the feature of Malaysian politics, fostered forcefully by the BN and succeeding UMNO ruling elites, whence nowadays even opposition parties had began to replicate that behaviour, too.
It is not unsurprising that Parti Pribumi Bersatu Malaysia (Bersatu) renegade like Wan Saiful Wan Jan was in favour of Lynas to continuing operations of its rare earth plant in Gebeng because of huge investment that brought political clientele cohorts to handful glee.
The central outcome of rentier capitalism is introduction of economic inequality and injustice in the country thus widening the class division and deepening the class struggle thereon.
Basing on Nicos Poulantzas concept of class “places” as existing at each economic, political, and ideological (or cultural) level, our understanding of class relationship to where the economic power emits from could be identified from the stronghold of clientelism and the ensuring political clientel relationship where ruling elites in the United Malay National Organisation (UMNO) [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 – prominently as ethnocapital – that the brunt inequality of wealth is permeating porously in the country, (Khalid) where many rakyat2 felt that the benefits from economic development did not trickle down to them, and only the well-connected oligarchy cronies who were involved in corruption consuming the joy on fruits of development. However, as often as it is, Malaysia has an escape clause where treating corruption is a political game that is used against their opponents rather than a commitment to expose corruption irrespective of whether the corrupt happens to be a political friend or foe.
An ethnocratic governance is where representatives of an ethnic group is holding a disproportionately large number of public posts to advance their ethnic group to the disfranchisement of others, (see Winter, J.A., Oligarchy, Cambridge University Press, 2011 and Wade, G., The Origins and Evolution of Ethnocracy in Malaysia, Asia Research Institute, National University of Singapore, Working Paper Series 112, April 2009).
By ethnocapital we mean here a (malay) bumiputra owned and or controlled 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.
Therefore, it is not surprising that within the context of clientel capitalism the Pahang Regent Tengku Hassanal Ibrahim Alam Shah divested his 50 percent stake in the company hired to build Lynas Malaysia’s permanent disposal facility (PDF) in Kuantan; the changes were recorded by the Companies Commission of Malaysia (CCM) on Feb 17, the same day Malaysiakini reported Gading Senggara Sdn Bhd’s (GSSB) had royalty links.
Lynas Corporation came to Malaysia with the outright support of the ruling class in the Chief Minister of Pahang and the clientel capitalism vested in the Pahang UMNO-state ethnocratic government domain, supported by corporate capital for infrastructure development and logistics provisions in the business sector. This has to do with the parasitic ruling regime consisting of political elites and corporate capital controlling the political power – where as part and parcel of the clientel capitalism class – they determine the direction, pace, rhythm and content of economic and political structures and institutions in the country.
On Aug 15, 2019, even with a promising elected government, in a turnabout from rakyat2 aspiration, Pakatan Harapan announced that it would renew the operating licence of Lynas Malaysia Sdn Bhd for a further six months, but has effectively given the rare earth mining company the green light to operate for another four years.
4] ECOLOGICAL ECONOMICS EXERCISE
A) THE ECONOMIC DIMENSION
That this Australia-based rare-earth processor came to a Global South country is because of the neoliberal globalization in the twenty-first century when there is a shift to global monopoly-finance capital or what Samir Amin calls the imperialism of “generalized-monopoly capitalism.” Monopoly-capital is extracting surplus value of developong country labour through the application of global labour arbitrage where, as a result of the removal of or through the disintegration of barriers to international trade, jobs and industries move to nations where labour and the cost of doing business is with low-pay and operational costs are inexpensive thus contributing to enlarged capital accumulation by the transnational corporations (TNCs).
Around one third of Lynas Malaysia’s employees currently work in cracking and leaching, and during its pioneer industrial status presentation argument was that it would invest in additional downstream processing in Malaysia to create new jobs endeavouring to ensure all of its staff would have opportunities to grow with the company.
Contrary to the platitude assurance of Lynas Corporation, the economic benefits are not much, indeed it is less than what was asserted or claimed because besides the twelve year tax holiday granted by ruling authorities, the number of jobs created may only be 350 employees including those in the unskilled positions. Further, there is no likelihood an industry in this category could possibly generate a multiplier effect of five to eight times in secondary jobs throughout its economic cycle as reported by the national news agency (Bernama, 2012).
This is not surprising because in all previous national economic development in the country and during her industrialisation initiatives, the number of labour created in Malaysia is far below to what was projected.
The uneven and unqualified labour employment, as an exemplary case, 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), but whereas the surplus value is highest and most extractive at the R&D design and development phases and in the marketing and post-sales support stages :
Similarly, Malaysia’s agricultural sector is strongly biased towards large-scale agriculture. Nowadays, over 60% of land area is occupied by two main crops neither of which provides as food to feed the country’s population. In 2017, export earnings from rubber and rubber products contributed RM$32.1 billion to national exports; total oil palm export was valued at RM$71. 5 billion, but this agricultural sector employed only 4% of the workforce.
Then, the very fact that Lynas comes to Malaysia is because this company has a problem on finding a processing site and or designated place which is willing to accept the radioactive water leached purification (WLP) solid wastes residue in other parts of the world near to its Australian mining site. On one respect, where would Lynas take the contaminated wastes to? Back to Australia? Australia will not accept it – so they cannot, and would not do that: wouldn’t Australia? as evolving and developing situations show a possible change in Lynas strategic direction.
B) THE ECOLOGICAL ASSESSMENT
More than fourteen years after they started operations in Malaysia, rare-earths producer Lynas Corporation might finally be within grasp of a state-approved solution for its radioactive waste. In a Jan 30th. 2020 statement, Lynas says it had identified a site with consent from the Pahang state government to build what it refers to as a “permanent disposal facility” (PDF).
This PDF is key to Lynas’ operations in Malaysia. The company’s current operating licence expires on March 2, 2020. To renew its license, Lynas must fulfil three conditions set by Malaysian authorities. One of the conditions requires Lynas to either remove all radioactive waste from the country or obtain state approval for a location to build a PDF to dispose of the waste. With this announcement, Lynas appears to have met all three conditions.
In response, the government has “on a general principle” extended Lynas’ operating license for three years, seeAPPENDIX
Since 2011, Lynas has submitted several plans related to a PDF to the Atomic Energy Licensing Board (AELB), the federal government body that regulates radioactive materials in Malaysia. However, neither Lynas nor the AELB has described the PDF in detail or shown successful examples of PDFs in Malaysia or indeed elsewhere.
It was at this juncture that Kuantan MP Fuziah Salleh called for a halt to public consultations into Lynas’ radioactive waste permanent disposal facility because the Multi-Category Industrial Scheduled Waste Disposal Site (MCISWDS) that the PDF will be built is still categorised as a Rank 1 environmentally sensitive area (ESA). According to the Pahang State forestry department director Hizamri Yassin the designated area was being degazetted as a forest reserve, and oficials have yet to approve any Environmental Impact Analysis report for the site at the Bukit Kuantan forest reserve, which is required before the land can be cleared.
Owing to this lack of transparency, public fear and protests existed among rakyat2 where opposition to Lynas has been ongoing since its foray into Malaysia in 2007, and continuing to be an ecological-economic engaged entanglement between clientel capitalism capriciousness and the rakyat2 inspiration.
Ismail Bahari, Lynas Malaysia’s general manager of radiation safety, regulations and compliance had once indicated that the PDF has the operational features, facility and functionalities to contain LAMP’s disposed waste for the long term, as presented in its Radioactive Waste Management Plan of December 2011. Lynas would first store the radioactive residue in temporary on-site storage facilities and onlylater transport it to a “permanent disposal facility”.
Lynas Corp., the largest rare earths producer outside of China, having won a new three-year license to continue operations in Malaysia subject to a range of conditions, thus henceforth will be deemed to a project construction of new plants to handle waste and raw materials.
To AELB as part of its application for a temporary licence, Lynas would have to present “safety principles, siting criteria for the PDF and the safety assessment of the disposal” in a document prepared by Environ Consulting Services Sdn Bhd.
The country has set a July 2023 deadline for Lynas to stop importing raw materials that contain naturally occurring radioactive material. To address conditions attached to the license renewal, Lynas plans to build a new facility in Western Australia, which will partially process its raw material before leaving the country. Lynas would also begin development of a new permanent disposal facility in Malaysia for some wastes and cooperate with the Malaysian Atomic Energy Licensing Board (AELB).
The AELB had on July 28, 2020 approved the usage of a piece of Pahang state government-gazetted land for the construction of the permanent disposal facility (PDF) – only 12ha of the 202.35ha or a mere 6% of the total area gazetted – to be further requiring a radiological impact assessment (RIA), environmental impact assessment (EIA) and other relevant assessments by local authorities, according to the new Minister of Science, Technology and Innovations, Khairy Jamaluddin – an UMNO rascaille who, after the Sheraton Move, became an unelected governance member of the Perikatan Nasional (PN) (also known Parti Perikatan Nasional) since March 2020.
However, ecologically, a buffer zone is an important space requisite. LAMP is relying on experience in maintaining the repository at Bukit Kledang, Perak – which contains radioactive waste from the Asian Rare Earth Sdn Bhd’s facility – where the buffer zone between the repository and the public area is 1.7 kilometres; for clarity, the radioactive content of the waste in the Perak’s repository, thorium-232, is 200 becquerel per gram. Lynas’ WLP (water leached purification) residue measures at six becquerel per gram, and like the Bukit Kledang repository is under 300 years of institutional control, which means that the proposed Kuantan Bukit Ketam repository’s surrounding area can only be developedafter a period of 300 years!
Bukit Ketam, on Google Earth, appears to be a green sea of oil palm estates where the chosen site is seemed to have received the consent of the Pahang state government. It seems, too, that Gading Senggara Sdn Bhd is contracted to manage the PDF project from design to construction and subsequent maintenance, but yet again, whether a PDF can be built in said location has to depend on the final approval of the AELB, (New Straits Time, Feb 2, 2020). In reality the proposed waste dump is on a hill catchment for two rivers: Sungai Ara joins Sungai Riau that flow into the Kuantan River and to the South China Sea. Along the way there are two water treatment plants for public water supply for 90% of Kuantan populace dawn from this river system.
C) THE EIA DECISIONS
As stated, one of the conditions specified by the Atomic Energy Licensing Board (LPTA) in its licence extension directive is that Lynas has to come up with a plan to build a “cracking and leaching” facility overseas so that the main processes to remove the radioactive waste — currently being considered in Gebeng, Kuantan, Pahang — would be undertaken there. However, it also provided that the overseas cracking and leaching facility be constructed and commence operations “within four years” from the date of licence renewal on Sept 3, 2020.
However, in 2021, Lynas’ application for a permanent toxic and radioactive waste dump in a rainforest reserve was rejected in an Environment Impact Assessment (EIA) on April 28. The announcement came in the form of a “not approved” entry on the environment department’s website. It is not surprising because carved out one of the last remnants of a pristine rainforest for a shallow radioactive waste dump, lined with only a 2 millimetre-thin, high-density polyethylene (HDPE) plastic sheet. There is indeed no safe guarantee that rain, water intrusions, landslides and many other factors will prevent that the radioactive materials, heavy metals and other toxic material will not be stopped from leaking out.
Lynas Corp had since committed to relocating the first stage processing of its rare earth – where the material is separated from the low level, naturally occuring radioactive material (NORM) – to Australia over the next five years. According to a statement made by Datuk Mashal Ahmad – the managing director and vice president of its Malaysian operations: Lynas Malaysia – the group has identified two potential processing sites that are close to its mine in Western Australia, for the relocation of this first-stage process, also called cracking and leaching stage. This would mean that the first stage processing would eventually take place before the Lynas Australia material are shipped to Malaysia for re-processing. This first stage is also where the rare earths are removed from the low level, naturally occurring radioactive material (NORM) which are found alongside the primary ore.
Henceforth, if the monopoly-capital follows through with all those intoned multilateral agreements, then material shipped to Malaysia for processing would not include the NORM once the new plant is operational. Adding to this redesigned process, the government and local communities in Western Australia are now being supportive of Lynas Australia work. In fact, Western Australian Minister for Mines and Petroleum have short-listed the PDF locations, Mt Weld and Kalgoorlie.
Retreating its ecological imperialism from a Global South venture is appropriate as Lynas Australia has twenty three times the land mass downunder compared to little Malaysia to construct any alternative PDF then, and now.
D) THE STOP LYNAS CAMPAIGN
Lynas decision certainly ends the uncertainty clouding the future of the company’s refinery in Gebeng since late 2018, when Malaysia’s government ordered a new review of the operations as social movements like the Save Malaysia, Stop Lynas (SMSL), the Stop Lynas Coalition (SLC) and Hiburan Hijau (Green Gathering), Consumers Association of Penang (CAP) and Sahabat Alam Malaysia (Friends of the Earth Malaysia) raised concerns over its public health and environmental impact, supported by Member of Parliament for Kuantan Yang Berhormat (Right Honorable) Fuziah Salleh -from the opposition political party of Parti Keadilan Rakyat or People’s Justice Party – who formed the Stop Lynas Earth Refinery campaign conducting numerous meetings together with professionals like the Pahang Bar Association and Malaysian Medical Association, NGOs and the local village communities, besides initiating parliamentary sittings and legal hearings.
Besides the onslaught by public outcry, there were management misjudgment and malfeasance, too, that hindered Lynas social relationships with the Kuantan district community members and the three changed governing regimes within fourteen years did not in any manner smoothen dialogues with political clientel stakeholders at the national level.
On one level, it is about the clientel capitalism that dominated this business transaction where rakyat2 concerns are suppressed and who have to utter “…Lynas is so arrogant (by not consulting with the communities) because it is backed by the government” and supported by “We are concerned about Lynas storing waste onsite, where rural folks — who are fishermen, who are farmers, who are children, and who rely on the natural environment for their livelihoods — live,” Yasmin Rasyid, a biologist and president of the Malaysian environmental organization EcoKnights, told The Diplomat, 10th. January 2019.
At the higher level, Lynas also ignored the recommendation given by IAEA to build a permanent disposal facility for waste disposal. It transpired that a Lynas advisor had revealed that the company has identified the place for waste disposal, but by not building it despite years of operation, has resulted in doubt and animosity among the locals. According to LAMP CEO Nicholas Curtis, “We probably didn’t recognize the power of the social media to create an issue…and these delays are costing us a significant amount of money” (Porter, B., Permatasari, S., Lynas CEO Finds Social Media Hobbles Rare-Earths Plans, Bloomberg, July 2, 2012). Lynas previous approaches, by not informing about the construction of their plant and restricted the accessibility of their information, were the seeds germinating a wider public distrust, (Husna Jamaludin et. al. 2020).
International groups such as Friends of the Earth Australia, Beyond Nuclear Initiative, GreenLeft and AidWatch together with the influence of social media Twitter, Facebook, YouTube, and Whatsapp groups ultimately delayed Lynas’ operations in 2012 (Head, 2012: http://www.bbc.com/news/business-19880168
E) THE ECOLOGICAL-ECONOMIC EXPLANATION
This leads to the inevitable question whether the investment by Lynas or even other Global North monopoly capital has any positive contributory spread effect upon income distribution and or promotion of wealth equality. In terms of likely income generated – which income class and ethnic group benefit most from an optimal national “economic development” process, and to what extent. One may peruse at a past research data and try to decompose the average growth rate of real per adult national income in Malaysia by both income groups and ethnic groups.
Although the middle 40 per cent and the bottom 50 per cent benefited significantly from economic growth, whereby the Bumiputera in the top income groups (the top 1 per cent and the 10 per cent) had benefited the most from the growth rate of real income per adult, during the 2002 to 2014 period (pre-tax national income).
In particular, in the top 10 per cent, the average growth rate per adult national income for Bumiputera is 5.4 per cent, compared to 1.2 per cent for Chinese and 4.6 per cent for Indians. The gap in the growth rate among the different ethnic groups was large in the top 10 per cent; however, it is even larger for the top 1 per cent :
Whereby, in the top 1 per cent, the average growth rate for Bumiputera was 8.3 per cent, which is in sharp contrast to (minus) –0.5 per cent for Chinese and 3.4 per cent for Indians, source: Khalid
Ecologically, there is practically no safe level of exposure to radiation, particularly to elements like thorium and uranium, which were present in the mountain of waste that Lynas has piled up next to its refinery. Though low-level in terms of radioactivity, but in decaying have very high daughter isotopes like radium, radon, polonium and so forth and because having long half-lives, they are radioactive for a long time — billions of years. The danger comes from ionising radiation when the radioactive particles enter living cells — plant, animal or human. This takes place when they decay in the surviving cells damaging the DNA — the building blocks of our cells — if the dose is high enough. This is can be a cumulative process over a lifetime and can even be passed down to future generations.
In truth, changes to strategic initiatives are transformational wherein monopoly-capital value-chaining Global South to the Earth with Rare excellence.
The International Atomic Energy Agency (IAEA) establishes safety standards for the handling and disposal of radioactive materials. Member states of the IAEA, including Malaysia, can refer to these safety standards and apply them voluntarily.
With regards to radioactive waste disposal facilities, the IAEA states that ‘disposal’ refers to the placing of radioactive waste into a facility or location without any intention to retrieve the waste in the future.
The agency lists the specific aims of a radioactive waste disposal facility as follows:
(a) To contain the waste;
(b) To isolate the waste from the accessible biosphere and to reduce substantially the likelihood of, and all possible consequences of, inadvertent human intrusion into the waste;
(c) To inhibit, reduce and delay the migration of radionuclides at any time from the waste to the accessible biosphere;
(d) To ensure that the amounts of radionuclides reaching the accessible biosphere due to any migration from the disposal facility are such that possible radiological consequences are acceptably low at all times.
What is “accessible biosphere”? To the IAEA, it is “taken generally to include those elements of the environment, including groundwater, surface water and marine resources, that are used by people or accessible to people”.
In Malaysia, the Atomic Energy Licensing Act 1984 (Act 304) provides control over matters of atomic energy and is enforced by the local regulator, the AELB. Any operator that wishes to dispose of radioactive waste must apply for the appropriate license from the AELB and adhere to rules stated in Part 3 Section 5 of the Atomic Energy Licensing (Radioactive Waste Management) Regulations 2011.
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.
Succeeding oligarchy regimes had continued maintaining a clientel ethnocapitalism domitnation over the working class rakyat2 with 1% of the bumiputera population (seeKhalid 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, (seeAliran 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 :
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
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?” UnescoGlobal 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 UnescoGlobal 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 exemptionsacross 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.:
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.
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.
I] Capitalism is a system that pursues accumulation and growth for its own sake, whatever the consequences. It is driven by the single-minded goal of business for ever-greater accumulation of capital.
By accumulation of capital, we mean an increase in assets from investments or profits. The goal is to increase the value of an initial investment to a return on that investment, whether through appreciation, rent, capital gains or interest.
By growth, it is the capital formation which is a term used to describe the net capital accumulation during an accounting period for a particular firm. The growth in capital formation is the additions of capital goods, such as equipment, tools, transportation assets or even electricity. Once we have the growth (capital formation), the accumulation of these assets (capital) can be obtained.
By system, we mean that there are interrelated and interdependent components (sub-systems) that have to be linked, connected or interfaced together for the whole part to live, survive or work.
For capitalists, profit is an end in itself. It does not matter to them whether the commodities they produce will satisfy fundamental human needs — such as food, clothing, shelter — or are devoted to meaningless or ostentatious consumption, or are even destructive to human beings and the planet. A dollar is a ringgit dollar whether it comes from a kati of padi, a Lamborghini or a share dividend.
The logic of the capitalist can be splitted into six elements:
First, it is the increasing accumulation of wealth [capital] by a relatively small section of the population at the top of the social-class pyramid;
Second, there is a long-term movement of workers away from self-employment and into wage jobs that are subjected on the continuous expansion of production;
Third, the competitive struggle between businesses necessitates, on pain of extinction, the allocation of accumulated wealth to new, revolutionary technologies (like infrastructural platform) that serve to expand production;
Fourth, “wants” are encouraged in a way to create an insatiable hunger for more;
Fifth, government becomes increasingly responsible for promoting “national economic development”;
Sixth, the ownership and control of communication and education are part of this system serving to reinforce capitalism priorities and values.
At the time of pre-capitalist simple commodity production, peasants and artisans sold their surplus produce for money to buy goods to meet their other immediate needs (for example, padi sold to buy a piece of sarong).
This circuit of commodities and money takes the form of Commodity-Money-Commodity, and usually ends with the consumption of the commodity.
However, under the capitalist mode of production — in which commodity production is now generalised — the circuit begins and ends with money. The capitalist buys or produces commodities in order to sell them for a profit, and then buys or produces more to sell more again.
The formula is now M-C-M’, where
M’ represents the original outlay to buy or produce the commodities, plus the surplus value created by human labour during their production.
Unlike simple commodity production, there is no end to the process, since the capitalists’ aim is the reinvestment of the surplus, or accumulation of the capital, from the previous cycle.
Competition between capitalists ensures that each one must continue to reinvest their “earnings”, increase their production of commodities and continue to expand in order to survive. Production tends to expand exponentially until interrupted by crises (economic depressions or wars) and it is this dynamic at the very core of capitalism that places enormous, unsustainable pressure on the economy and environment where relentless deforestation for land development causes “metabolic rift” to introduce economic-ecolological-epidemological crises to planet earth.
On traditional economic concept, capitalism is based on the hope of a no-growth, slow-growth or sustainable-growth form of capitalism. Since the days of Adam Smith, capitalism is a system devoted to the pursuit of individual wealth, and only indirectly — by some “hidden hand” — meets society’s broader needs. It is becoming increasingly clear that the former goal (pursuing richness) supersedes and corrupts the latter (societal needs).
However, as Foster points out:
“Everyone … is part of this treadmill and unable or unwilling to get off. Investors and managers are driven by the need to accumulate wealth and to expand the scale of their operations in order to prosper within a globally competitive milieu. For the vast majority, the commitment to the treadmill is more limited and indirect: they simply need to obtain jobs at livable wages.“
Noam Chomsky further elaborates:
“The chair of the board will always tell you that they spend every waking hour laboring so that people will get the best possible products at the cheapest possible price and work in the best possible conditions. But it is an institutional fact, independent of who the chairperson of the board is, that they had better be trying to maximize profit and market share, and if they aren’t doing that, they are not going to be chair of the board any more.”
II] Monopoly-capitalism follows capitalism. Monopoly capitalism is the stage of capitalism which dates from approximately the last quarter of the nineteenth century and reaches full maturity in the period after the Second World War.
It is the concentration and centralization of capital:
(1) Monopolistic organization gives capital an advantage in its struggle with labour, hence tends to raise the rate of surplus value and to make possible a higher rate of accumulation.
(2) With monopoly (or oligopoly) prices replacing competitive prices, a uniform rate of profit gives way to a hierarchy ofprofit rate – highest in the most concentrated industries, lowest in the most competitive. This means that the distribution of surplus value is skewed in favour of the larger units of capital which characteristically accumulate a greater proportion of their profits than smaller units of capital, once again making possible a higher rate ofaccumulation.
(3) 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.
III] The advent of globalization (with cross-border trade in goods and services, technology, and flows of investment, people, and information), there emerge the spread of world-wide commodity exchanges that give rise to commodity value chains to enable the transfer, receive and process of commodities, and the generation of values of such end-products.
Economic researchers at the Institut de Recherches Économiques et Sociales in France indicate that global commodity chains have three different elements:
(1) a production element linking parts and commodities in complex production chains; (2) a value element, which focuses on their role as “value chains,” transferring value between and within firms globally; and (3) a monopoly element, reflecting the fact that such commodity chains are controlled by the centralized financial headquarters of monopolistic transnational corporations.
Through these global commodity chains, monopoly-capital enters into the determination and structuring of production worldwide on different commodities and subcomponent parts. With flexibility in a lean production, linked in global commodity chains, assembly plants are located in the Global South. These are the sites where the reserve army of labour is larger, unit labour costs are lower, and rates of exploitation are correspondingly higher. The result is much higher profit margins for the transnational corporations leading to the amassing of wealth in the Global North centre, via a kind of profit by expropriation.
Monopoly-capital in seeking cheap agricultural pastures and arbitrage of labour costs is redefining and reimaging the global commodity supply chain in the distribution of its final product. The twenty-first century monopoly-capitalism is scooping returns accruing from land and investment on real estates, from natural resources and long-term commodity contracts. This core feature of economic imperialism cascading through an intensed transformative quality of organization and dominance of monopoly capital, the rampage of peripheral countries’ natural resources is intense and paramount.
By 2010, 79 percent of the world’s industrial workers lived in the Global South, compared to 34 percent in 1950 and 53 percent in 1980, (Smith, Imperialism in the Twenty-First Century, p.101).
IV] Financialization capitalism surfaces when corporations in the 1970s and ’80s sought to hold onto and expand their growing economic surplus in the face of diminishing investment opportunities, they poured their massive surpluses into the financial structure, seeking and obtaining rapid returns from the securitization of all conceivably ascertainable future income streams. Increased concentration (“mergers and acquisitions”) and its attendant new debt, these securitizations representing the income stream of already-existing mortgages and consumer debt that piled new debt on old, and new issues of debt and equity that capitalized the potential future monopoly income of patent, copyright, and other intellectual property rights, all followed one another.
The financial sector provided every sort of financial instrument that could arguably be serviced by a putative income stream, including from the trading in financial instruments themselves. The result, as Magdoff and Sweezy already documented in the early stages of the process from the late 1970s to the ’90s, was a vast increase in the financial superstructure of the capitalist economy.
This financialization of the economy had three major effects.
First, it served to further uncouple in space and time – though a complete uncoupling is impossible – the amassing of financial claims of wealth or “asset accumulation” from actual investment, that is, capital accumulation. This meant that the leading capitalist economies became characterized by a long-term amassing of financial wealth that exceeded the growth of the underlying economy (a phenomenon recently emphasized in a neoclassical vein by Thomas Piketty) – creating a more destabilized capitalist order in the center, manifested in the dramatic rise of debt as a share of GDP.
Secondly, the financialization process became the major basis (together with the revolution in communications and digitalized technology) for a deepening and broadening of commodification throughout the globe, with the center economies no longer constituting to the same extent as before the global centers of industrial production and capital accumulation, but rather relying more and more on their role as the centers of financial control and asset accumulation. This was dependent on the capture of streams of commodity income throughout the world economy, including the increased commodification of other sectors – primarily services that were only partially commodified previously, such as communications, education, and health services, seeSTORM: Financialization of Healthcare: Capital and Health Equities.
The third point, it is relevant to read: Paul A. Baran and Paul M. Sweezy, Monopoly Capital(New York: Monthly Review Press, 1966), 107–8; Paul M. Sweezy, “Obstacles to Economic Development,” in C.H. Feinstein, Socialism, Capitalism, and Economic Growth (Cambridge: Cambridge University Press, 1967), 194–95, to get the underlying rationality, and that is, “the financialization of the capital accumulation process,” as Sweezy called it, led to an enormous increase in the fragility of the entire capitalist world economy, which became dependent on the growth of the financial superstructure relative to its productive base, with the result that the system was increasingly prone to asset bubbles that periodically burst, threatening the stability of global capitalism as a whole – most recently in the Great Financial Crisis of 2007–2009.
V] Rentier capitalism is dominated by a few wealthy companies and individuals with access to key scarce assets (such as land, natural resources, financial, licences, intellectual property or digital platform) and, in doing so, siphoning national wealth without societal care to rakyat2 wellbeing.
The twenty-first century rentiers are everywhere, scooping returns accruing from investments, from land, from housing, monopolistic utilities, consumer credit, and the control of platforms, natural resources and long-term contracts. This is the core feature of neoliberal capitalism: the resurgent power of unproductive assets that span finance, housing, fossil fuels and the public sector out-sourcing rackets.
The central outcome of rentier capitalism is economic inequality and injustice in the country determining the class power struggle within.
Rentier capitalism incorporates financialization capitalism and consolidation of monopoly power, and with the emergence, and spike of, a COVID-19 pandemic, the confluence of ecological-epidemiological-economict crises has exposed the failures across health care systems, working conditions, product and food supply chains, the depth of inequality, prolonging systemic racism and sustaining religious intolerance.
Examples of rentier capitalism can be seen in privatising FELDA schemes indebting settlers; giving oil concessions either benefitting TNCs or local compradore-capitalist; the financialization capitalism of unit trusts with the circuitry of capitalism affecting ordinary households; landlords squeeze workers, ripping them off at home, as tenants; back-door regimes fighting for Covid19 vaccine franchise and distribution; government allocating stimulus packages to private hospitals; GLCs extracting land dues from landless farmers, unlicensed cultivators or unsettling settlers; public sector out-sourcing rackets handling contaminated halal meat.
CONCLUSION
Therefore, it is relevant than ever – more desire than ever – that a there is a definitive need towards a surge towards socialism in the twenty-first century.
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THE POLITICAL ECONOMY OF MALAYSIA – a brief survey on the development of underdevelopment, economic stagnation and socio-economic inequality under a Neo-Imperialism regime of monopoly-capital neoliberal policies of clientel capitalism linking to financialization capital is available HERE
The states of Sabah and Sarawak are completing more than 2,000 kilometers of road network called the Pan Borneo Highway.
The highway objectives are supposedly to boost the states’ economies and connect the two Malaysian states with Brunei and Kalimantan in Indonesia. Yet, on the other hand, scientists and environmentalists had stated that it is cutting through, and fragmenting, ecologically sensitive areas and affecting thousands of community dwellings.
Community Elephant Ranger Team (CERT) member, Mc Wesley Bin Widin had voiced disapproval for the Pan Borneo Highway as it cuts into a densely populated region through the Tawai Protection Forest Reserve where the pygmy elephants forage.
With the Pan Borneo Highway cutting through the Tawai district, the wildlife in the area is forced to intrude into community settlements destroying the crops grown by the community, and consequentially causing a human-animal conflict. A 10-year-old bull elephant succumbed to its injuries in December 2017 despite the valiant efforts by the Sabah Wildlife Department to save it, a week after it was shot by unidentified persons in Telupid. This is the eighth reported death of the ‘totally protected’ Bornean Elephant in Sabah within the last 14 months. In January 2021, the carcass of a Borneo pygmy elephant was found with its limbs amputated while its skin had been peeled off in an oil-palm plantation in Tongod.
Since 2000, Borneo has had the world’s highest deforestation rate with annual forest loss approaching 4 percent per year. While the conservation community received positive news in February 2007 when the governments of Brunei, Malaysia, and Indonesia, working with World Wide Fund for Nature (WWF), agreed to protect roughly 220,000 square kilometers (85,000 square miles) of tropical forest in the so-called “Heart of Borneo”, a Association for Tropical Biology and Conservation (ATBC) resolution then said that the objective has yet to safeguard the island’s most biodiverse ecosystems: its lowland forests because it had not gone far enough to prevent large-scale species extinctions.
“The biggest problem is that lowland forests, which have been largely devastated, and those on nutrient-poor soils are not well-represented in the Heart of Borneo program,” said ATBC member Peter Ashton of Harvard University, who has spent nearly a half-century working in Borneo. “The lowland forests are the biologically richest in Borneo and contain many, many locally endemic plant and animal species, found nowhere else in the world.”
Further, as many of Borneo’s species migrate between lowland and upland forest areas, the loss of either could prove devastating to wildlife.
“Many species of Bornean birds and mammals move up and down elevational gradients and among different lowland habitats in order to find enough fruit and other food,” explained Rhett Harrison, secretary of the ATBC Chapter in Asia. “The Heart of Borneo needs to be expanded wherever possible to include more lowland and coastal forests, to help support these many migratory species.”
Laurance adds that though well-intentioned, the Heart of Borneo program will fall short of conserving Borneo’s forests and biodiversity.
Also, by the 1980s, Borneo’s forests have been reduced by more than one-third, mostly as the result of commercial logging, which later fueled large-scale fires (especially severe in the el nino years of 1982-1983 and 1997-1998) and land conversion for oil palm plantations. WWF projects that by 2020 less than one third of Borneo’s forest cover will remain, mostly in the central highlands of the island, while the United Nations Environment Programme (UNEP) says that 98 percent of organutan habitat will disappear by 2022. Presently, it is estimated that about two-thirds of Borneo’s most biodiverse ecosystems, the lowland Dipterocarp forests, have been lost.
Sabran B. Adari from Kampung Batu Puteh, Kinabatangan had conveyed his concern that the highway had intruded onto granted lands of oil palm plantations, a main source of income for villagers and farmers. At the beginning of the Pan Borneo Highway construction, many community residents were given just two weeks of notice before being vacated from their homes of 30 years.
2. RENTIER CAPITALISM
Rentier capitalism is dominated by a few wealthy companies and individuals with amble access to key scarce assets (such as land, natural resources, financial means, licences, intellectual properties and digital platforms) and, in doing so, siphoning national wealth without societal care nor contributions to rakyat2 wellbeing.
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 that generated surplus values 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 nowadays even opposition parties had began to replicate that behaviour, too.
The central outcome of rentier capitalism is introduction of economic inequality and injustice in the country thus widening the class division and deepening the class struggle thereon.
A] Take the case of Lebuhraya Borneo Utara (LBU), as Project Delivery Partner (PDP) for Pan Borneo Highway Sarawak where it is strategically positioned to support the National Bumiputera Economic Transformation (BET) programme through the Lebuhraya Borneo Utara (LBU) Bumiputera Participation Programme (BPP) for Sarawak Bumiputera contractors so that, as many as possible, the Sarawak Bumiputera contractors and the their communities benefit from the project; in return, this captured clientel cohort would continue in supporting the ruling regime.
In Sarawak, as the Chief Minister, the Taib’s family oligarchs exploits the biodiversified forests with Sarawak’s largest timber and logging companies (Ta Ann, Samling, WTK, Sanyan) while maintaining concurrent monopolistic control in the log exports via Achi Jaya Transportation, besides other commanding plantations’ interest in Sarawak Plantation.
Cahaya Mata Sarawak Berhad (CMS) a contract covering all state roads maintenance in Sarawak totally over 4000 km. and a 15-year concession to maintain 643 km. of federal roads (Cahaya Mata Sarawak Berhad, Annual Report 2008, p.20); and protectionist measures (as like Sapura-Kencana in the oil and gas sector or Dewan Niaga (Sarawak) monopoly on all timber exports) while displaying no remorse for the marginalized Malaysian. Often, these oligarchs are served and encouraged by crony capitalists who have close relationships between businesses and the ruling power.
Often the case whereby a public-packaged contract awards to crony capital corporate would most likely be outsourced to clientel partners or subcontracted to corporate capital subsidiaries thus maintaining, and benefitting in the process, the rentier capitalisation of such clientel firms, for instance:
Steel products and equipment maker Prestar Resources Bhd was awareded contracts worth about RM$80 million to supply guardrails and accessories for the development and upgrading of the proposed Pan Borneo Highway project in Sarawak. The group also had its wholly-owned unit Prestar Engineering Sdn Bhd (PESB) given two supply agreements with Pansar Company Sdn Bhd — a unit of Pansar Bhd. It was also awarded contracts by LTC West Gate Sdn Bhd and Kemakmuran 2000 Sdn Bhd.
It said PESB will supply and deliver those guardrails and accessories to four work packages for the Pan Borneo Highway project, namely the Pantu Junction to Batang Skrang stretch, Sungai Kua Bridge to Sungai Arip Bridge, Semantan to Sungai Moyan Bridge, and Sungai Awik Bridge to Bintagor Junction.
Take another matter of project delivery partner (PDP) Lebuhraya Borneo Utara Sdn Bhd (LBU) where crony corporate capital is fused into clientel capitalism. The overall indebtedness of the Pan Borneo Highway project can be seen in companies that have been awarded the 11 work package contracts (WPCs) that were delayed even though the RM$16.12 billion were disbursed.
“The RM$16 billion [price tag] doesn’t include other costs. There is almost RM$1 billion in PDP fees, the consultants, designs and there are other heavy costs such as reimbursables,” an executive with knowledge of the matter informed The Edge.
The linkages of corporate capital to clientel capitalism can be presented in these close connections between crony companies:
Maltimur Resources Sdn Bhd controls a 55% stake in LBU while Jalinan Rejang Sdn Bhd holds the remainding 45%. The shareholders of Maltimur Resources are Zaidi Abang Hipni with 40% equity interest, Safuani Abdul Hamid (30%) and Tan Sri Abang Ahmad Urai Datu Abang Mohideen (30%). Jalinan Rejang is 40% controlled by Sharifah Noor Ashikin Sy Aznal, 30% by Mohd Khalil Dan, 20% by Muliana Munir and 10% by Abang Abdul Rahim Abang Ali.
Even though his name does not surface in Maltimur Resources and LBU, there are various published news reports that both companies are linked to Sarawakian businessman Tan Sri Bustari Yusof, a golfing buddy of former premier Datuk Seri Najib Razak.
Some other companies that are linked to Bastari Yusof include Konsortium URW Sdn Bhd, a nominated sub-contractor that was awarded a contract in excess of RM$2 billion to relocate utilities such as pipes and telecommunications and power cables, among others. Konsortium URW is wholly owned by Shorefield Sdn Bhd, a company also controlled by Bustari. Its directors are Mohamad Nadziff Bustari and Ahmadi Yusoff, the son and brother respectively of the businessman.
Other companies linked to him include Konsortium KPE Sdn Bhd — a 70:30 joint venture between KACC Sdn Bhd and Perbena Emas Sdn Bhd — which was awarded the RM$1.82 billion WPC 11 involving the 80km portion between Sg Tagap and Pujut Link Road, near Miri. The KACC is 40.57% controlled by Mohamad Subky Bustari, 25.5% by Siti Yuhaniz Bustari, 18.92% by Jennifer Bermas Jabu and 15% by Robert Lawson Chuat.
Perbena Emas, which is the junior partner, is wholly owned by PE Holdings Sdn Bhd. The major shareholder of PE Holdings is Pan Sarawak Holdings Sdn Bhd, which also controls a 65.26% stake in Bursa Malaysia-listed Pansar Bhd as exposed above. It has to be told that Pan Sarawak Holdings is the flagship company of the family of the late corporate capitalist Tan Sri Tai Sing Chii.
Other project inconsistencies and operational mismanagement can be read HERE and convoluted clientel connections HERE.
In the days since Sarawak became an entity in the Federation of Malaysia, there emerged 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.
Leo Moggie, one of the founders of Parti Bansa Dayak Sarawak (PBDS) and the only Iban Federal minister for most of the 1980s, had this to say:
“The Dayaks, though Bumiputera by law, were not enjoying that status in the practical implementation of the New Economic Policy.”
The same story surfaces when you look at the intake into institutions of higher learning, recruitment and promotion in the civil service, completing tasks in Government departments or in the participation on the exploitation of natural resources. Whether by design or omission, the NEP has passed by the Dayaks community.
In Sarawak, the political marginalisation is serious because Dayak’s lack of political power has meant that their traditional land – native customary rights land (NCR) – had been taken away by the state for exploitation by cronies of the empowered Chief Minister.
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 federal ruling Barisan Nasional (BN) cliques to be ‘yes-men’.
Therefore, over the years, the young and potential Kadazandusun and Dayak leaders in BN become politically even milder in political posture than their predecessors. To these upstart politicians, it is better for them to be in alignment with the Chief Minister’s whims and wishes to obtain rewards than to oppose him relentlessly. Accordingly, many of the young Kadazandusun and Dayak leaders became smart at the game of “currying up” with the state Muslim leaders and UMNO leaders. Often, those who take too strong a stand, and fight for the non-muslim bumi (NMB) rights, inadvertently are casted aside and would eventually be omitted as BN candidates in the following elections.
An investigative website, Sarawak Report (www.sarawakreport.com), has systematically compiled a list of land grabs by the previous Chief Minister and his cronies, using information provided by a former staff of the Sarawak Land and Survey Department. It has to be acknowledged that the Chief Minister is also the minister in charge of land issues and would undeniably alienate or lease a piece of land, many of them under the NCR claim, to companies where his family has an interest or close associates. According to estate-property agencies, the premium paid is usually just mere fraction of the market value.
This piece of land is then sold to investors at its true value or a joint-venture is then established to develop the land. In most cases, the compensations paid to the Dayak is often miserably low compared to the true and realistic market value.
According to the various Sarawak Report’s postings and publications, land areas equal to the size of Singapore had been handed over to family members and cronies of the chief minister in the past two decade: (http://www.sarawakreport.org/tag/taib-land-grabs/).
The former chief minister wallows in so much wealth that a property of his in Canada is an asset leased to the Canadian provincial government.
B] Across in Sabah, only 21 out of 35 packages under Phase 1 of the Sabah Pan Borneo Highway project can be completed by 2028. This delay was announced on 21st. December 2020 by the new Minister of Infrastructure, Datuk Seri Bung Moktar Radin, that the remaining packages under the first phase are expected to be completed only by 2040!
Indeed, on the first phase, only 11 packages have commenced, thus the performance achievement is much slower than expected with only about 45% being in the progress on these ongoing packages. Further, out of the other 35 packages, the progress thus far is about 20% only.
These delays happened because of incompetency and lack of management expertise besides the collusion of rentier capitalism when preliminary issues arising were often not settled efficiently (like operational tasks not executed promptly) nor dealt with effectively (for example: payments for incomplete jobs); also contract awards were given to crony contractors who gained immense benefits on the Phase 1 to Phase 3 highway subcontracts that are worth at least RM$40 billion.
Though attempting to reach development implementation objective by carrying out the packages simultaneously, the Bung’s proposal to the Federal Government allowing the state government to handle the highway project through a Private Financial Initiative (PFI) fast track approach would only attract, and to encourage, rentier capitalism persistence to shallow the national coffers.
It is an absurdity in reality that the Sabah portion of this project was still behind schedule compared to Sarawak when this mega project was launched in both states at about the same time. Sarawak has already achieved 60% of project scheduling whereas Sabah had only “done” 45% of the Pan Borneo Highway work by March 2021.
Owing to the hugh monetary amount and aggregated activities – a total of RM$5.01 billion has been designated for 1,039 development projects in Sabah under the 12th Malaysia Plan (12MP) – rolling out in 2021 – it would not be surprising that the Shared Prosperity Vision 2030’s main objectives (“development for all”), likely though, would instead go to clientel cronies like those Sarawak’s cohorts in a colluded alignment with rentier capitalism.
3. CLIENTELISM AND CLASSCLEAVAGE
Basing on Nicos Poulantzas concept of class “places” as existing at each economic, political, and ideological (or cultural) level, our understanding of class relationship to where the economic power emits from could be identified from the stronghold of clientelism and the ensuring political clientel relationship where ruling elites in the United Malay National Organisation (UMNO) [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 (Khalid) where many rakyat2 felt that the benefits from growth did not trickle down to them, and only the well-connected oligarchy cronies who were involved in corruption consuming the joy on fruits of development. However, as often as it is, Malaysia has an escape clause where treating corruption is a political game that is used against their opponents rather than a commitment to expose corruption irrespective of whether the corrupt happens to be a political friend or foe.
Under former premier Najib with the New Economic Model, (Workd Bank, 2010), there were already clientel corporate capital which were rent seeking and the patronage was harming the economy. Though the new transformation agenda was directed for the reduction in the role of the state in business, an overhaul of race-based affirmative action, and the reform and privatisation of GLCs, nevertheless, the pushback from prominent politicians – including Mahathir and right-wing Malay NGOs – led to a reversal of this policy. By 2013, Najib turned to unveil the Bumiputera Economic Empowerment (BEE) policy which, against the prescriptions of the New Economic Model, mobilised GLCs to promote “market friendly affirmative action” (Zainal Anwar, 2013) through the Bumiputera Vendor Development Programme that favoured the same old ethnocratic-based capital. Thus, from 2009 onwards, increasingly tapping GLCs to generate growth and infrastructure development, as well as to draw investments from foreign State Owned Enterprises (SOEs), particularly from China, saw the state – and prominent individuals, including Jho Low – playing an increasingly dominant role in the economy.
This problem of distribution of income and wealth equality across nation is also evident in the allocation of shares in ASN (Amanah Saham Nasional), a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB) – the agency set up in 1981 to give investment opportunities to all Malays. Though shares were set at a constant RM1 per unit and shareholding was restricted to 50,000 units per individual in order to spread the benefits widely (and, with a guaranteed dividend of 10 per cent, and another 10 per cent bonuses return annually), yet, only one-third of all eligible Malays have participated in the ASN scheme, and about three-quarters of those participating have 500 or less units. On the other extreme end, a half of one per cent of participants own 25,000 or more units (see Clad, James, 1985. “Trickle Down Dries Up” Far Eastern Economic Review, 128(20), 23 May: 72-73).
In 2002, Malaysia’s inequality level was 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 higher than those of China:
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
In furtherance to address a main question in this sub-section, that is, in terms of income growth and wealth equality, which income class and ethnic group benefits from our national economic growth and to what extent. One may try to decompose the average growth rate of real per adult national income in Malaysia by both income groups and ethnic groups where 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 such that the growth rate of real income per adult, 2002 to 2014 (pre-tax national income) displays :
Decomposition of growth rate of real income per adult, 2002 to 2014 (pre-tax national income) : Khalid 2019
Although Malaysia’s growth for the period is featured by its strong inclusiveness, macro growth has obviously been different in the three ethnic groups.
In particular, in the top 10 per cent, the average growth rate per adult national income for Bumiputera is 5.4 per cent, compared to 1.2 per cent for Chinese and 4.6 per cent for Indians. The gap in the growth rate among the different ethnic groups was large in the top 10 per cent; however, it is even larger for the top 1 per cent.
In the top 1 per cent, the average growth rate for Bumiputera was 8.3 per cent, which is sharp contrast to -0.5 per cent for Chinese and 3.4 per cent for Indians.
4] THE ENVIRONMENTAL EXPLOITATION
The construction and expansion of roads for the Pan Borneo Highway project had carved up the core of the fragile tropical ecosystem, researchers had observed; see Campbell, Mason, Mohammed Alamgir, and William Laurance, 2017.
The Pan Borneo Highway poses a particular challenge, as it is dissecting some of the last remaining habitat for critical species, such as elephants, clouded leopards, sun bears, orangutans, and gibbons. It is a known fact that road construction with highway penetration will increase risks of poaching, deforestation, and terrain degradation, that would likely push many threatened species to the edge of extinction. Furthermore, often major roads in tropical areas had failed to deliver economic and social expectations due to the difficult terrain, intense seasonal rainfall, and high maintenance requirements whereby such mega-project had inevitably become an economic liability; see also Clements, Gopalasamy Reuben, PhD Thesis, James Cook University, 2013, downloadable here, and his article on Where and How are Roads Endangering Mammals in Southeast Asia’s Forests?
Rapid surface flows from roads in tropical and higher attitude’s sub-tropical environment often than not increase both local and downstream flooding. Another observation is that there are few roads in high-rainfall zones which have sufficient culverts, bridges or other drainage structures to divert water through or around the roads. Often, the resultant, and recurring, impediment of water causes localized flooding and vegetation mortality, peaking during periods of intense rainfall during the monsoon period. Also, not to de-emphasise is that road construction in mountainous areas increases the risk of landslides.
In wet tropical regions, rapid erosion from roads and the resulting heavy debris of sediment into streams and rivers elevate water turbidity and temperature, reduce dissolved oxygen content, and alter natural flow regimes. Road-induced erosion is much greater in steep or dissected terrain, in part because heavier roadworks (more cut-and-fill activities to level the road surface) are needed, (Sidle, R.C., and Ziegler, A.D., 2012). It has to be said that silt and nutrient inputs into freshwater ecosystems can also promote eutrophication that kill sensitive fish and freshwater invertebrates and reduce water quality for humans and livestock (Alamgir et al 2017) .
Therefore, soil and water quality must be mitigated, said Forever Sabah Institute. As road building comes hand in hand with increased forest conversion, not infrequently illegal hunting and illegal wildlife trade emerge and flourish scaring distributed communities, and impacting negatively on the Sabah exceptionally biodiverse and sensitive forest landscapes.
In the tropics, roads and highways often facilitate invasions of hunters, miners, migrating colonists and urban land speculators , a phenomenon dubbed the ‘Pandora’s Box Effect’. Roads can also increase trade in illegal wildlife products; for example, on average, eight killed mammals were transported per hour along a single highway in Sulawesi, Indonesia (Laurance, Goosem, and Laurance, 2009).
Then, there is the problem of road kills. Along the existing Ranau-Sandakan and Kalabakan-Keningau trunk roads that bisect the Ulu Payau Forest Reserve and Sungai Sumagas Forest Reserve, respectively, roadkill had impacted species such as the Malayan civets, snakes, and White-breasted waterhen.
Not to be forgotten is to acknowledge that tropical species of animals and birds are also particularly vulnerable to road infrastructure. The unique and complex architecture of rainforests sustain many species that are specialized for forest-interior and understory conditions, including some species that are unable to traverse even narrow forest clearings. Other tropical species are susceptible to hunting, road kill, elevated predation and species invasions near roads, (Laurance, Goosem, and Laurance, 2009).
Therefore, infrastructure development without considering natural heritage increases the likelihood of Sabah’s already fragile environment degrading further (WWF) and could inevitably jeopardise the state’s reputation as a premier ecotourism destination.
[ A movement comprising of scientists, activists and highway’s planners formed Coalition 3H, (Humans, Habitats, Highways) “to find the best ways to maximize benefits and reduce risks of the Pan Borneo Highway,” has since expanded civil groups comprising Forever Sabah, Land Empowerment Animals People (LEAP), Danau Girang Field Centre (DGFC), WWF Malaysia, Borneo Futures, Seratu Aatai, Bornean Sun Bear Conservation Centre (BSBCC), Jaringan Orang Asli Sabah (JOAS), PACOS Trust and SAVE Rivers ]
5] AN ECOLOGICAL EXPROPRIATION
Inherent to capitalism is inequality, social exclusion and environmental degradation by abuses to the soil as much as it exploits the worker. Under a rentier capitalism domain, corporate capital is applying destructive patterns of resource extraction to perpetuate oligarchy domination indefinitely. Besides, construction of highways and road links are connected to the harvest of forest and forestry produce to obtain collateral revenues from commercial and or illegal timber extractions. There is also the spectre of forest encroachments and undue settlements by land-titledness villagers in the highland interiors.
Secondly, Marx and Engels understood that the relationship between man and nature is one of interdependence as opposed to domination. This interdependence relates to Marx’s Metabolic Rift theory which is expanded by Foster (1999) where the dynamics between humans and non-humans in the natural world are distinct entities but are united within one metabolic system. In this metabolic system, energy is transferred and the rift – capitalism – inefficiently takes energy to turn into a monetary capitalistic expansion.
Thirdly, since the accumulation of capital is paramount to the owners of capital, their prime objective is to obtain their returns of investment within a short period so they can accumulate profits faster. As a result, investors do not consider long term impacts of their actions on the environment nor the biosphere.
“Nature is the proof of dialectics, and it must be said for modern science that it has furnished this proof with very rich materials increasing daily”.
For Marx and Engels, the materialist conception of nature and the materialist conception of history were reflexively connected, just as the alienation of nature and the alienation of labour were.
Victorian novelist and philosopher William Morris critiqued the capitalism rapacious destruction of forests, depletion of soil nutrients and pollution of the air and rivers unbalancing the metabolism of nature with unknown consequences.
In the late 19th century, Lankester – as pointed out in The Return of Nature: Socialism and Ecology, by John Bellamy Foster, Monthly Review Press, 2020 – emphasized that humanity was walking on an ecological knife’s edge living in a society dominated by pursuit of short-term profit, capitalist expansion, and with power concentrated in increasingly fewer hands (belonging to clientel capital for instance, and ethnocapital specifically) that are incapable of balancing the needs of profit with the genuine needs of society as a whole.
Indeed, in an article entitled “The Return of Lauderdale’s Paradox”, in Ecological Economics 25 (1998): 21-23, ecological economist Herman Daly has argued that the ecological contradiction has become much more serious today. As the world “gets crowded due to population growth and economic growth,” he writes, “previously free goods become scarce and get a price greater than zero. In fact, we are observing an increase in private riches who are perversely celebrating, while not even noticing the decline in public wealth – as expressed by Brett Clark and John Bellamy Foster in Marx’s Ecology in the 21st. Century, Monthly Review Press.
In The Return of Nature,op.cit. , Foster has explored how socialist analysts and materialist scientists of various disciplines, first in Britain, then the United States, from William Morris and Frederick Engels to Joseph Needham, Rachel Carson, and Stephen Jay Gould, sought to develop a dialectical naturalism, rooted in a critique of capitalism. In the process, Forster delivers a far-reaching and the fascinating exploration in reinterpretation of the radical and socialist origins of ecology.
Meanwhile, Japanese Marxist-author, Kohei Saito has shown from researching on Marx-Engels Gesamtausgabe (MEGA) Volume IV/18, that the nature-human interaction and Marx pointed critique of the ecological harm produced by capital accumulation. This concept of ‘metabolic rift’ (Stoffwechsel) lies in the understanding on circulation of soil nutrients between countryside and town thereby contributing to human disharmonies from the natural world, (Kohei Saito).
The totality of ecological Marxism in China as explained by Zhihe Wang and expanded by Zhihe Wang, Huili He and Meijun Fan; and the Iran’s Persi interest to John Bellamy Foster’s The Ecological Revolution: Making Peace with the Planet bear witness to rising consciousness of preserving Mother Earth.
It is in this context that Marx’s central concepts of the “universal metabolism of nature,” “social metabolism,” and the metabolic “rift” have come to define his critical-ecological worldview, (Karl Marx, Capital, vol. 3, London: Penguin, 1981), 949; Marx and Engels, Collected Works, vol. 30, 54–66); see an expanded ecological exploitation in a Sabah locale HERE.
Lynam AJ, Moore C (2013). A law enforcement action plan for reducing deforestation and forest degradation in Houaphan Province. Wildlife Conservation Society.
Not too long ago, during an era of pre-coronavirus, and in a place – connected by global supply chain – not too far away, a country is exporting 182 billion glove pieces annually that constitute her 65% global market share. The US consumes 150 glove pieces per capita, Italy 123 pieces, Japan 54 pieces, and China a comparatively six pieces from this glove production place.
Quoting Giovanni Arrighi, one may say that ‘the spread of industrialization appears not as a development of the semi-periphery but as peripheralization of industrial activities’ .
A company like Top Glove – where workers produce 16,000 gloves per capita daily or 200 million natural and synthetic rubber gloves a day when its 44 factory-plants are operating 24 hours a day in three shifts – is churning out single-unit gloves destined for community health clinics and medical suites, pharmaceutical chemists and hospitals all over the world, besides the Federal Emergency Management Agency (FEMA).
In a globalised world, the commodity production resides in Global South whereas the consumption and the capital financialisation of its production emanate from Global North giving contemporary imperialism a new face and direction (Suwandi, Jonna and Foster, 2019), by capturing labour value in the periphery on an unequal exchange, and with the ongoing pandemic, creates labour unrest.
1] UNION BUSTING AND UNFAIR EMPLOYMENT
The coronavirus has fuelled unemployment and union-busting at factories across Southeast Asia where Global North retailers cancelled orders or demanded discounts from suppliers in Malaysia, Myanmar, Thailand, Cambodia and the Philippines, leading to many union workers – like carmaker BMW and fashion label Zara – without pay or being sacked.
It is not surprising that many transnational corporations are targeting – and firing – union members while keeping on non-unionised workers. With the mingling Covid19 persistence, transnational corporations (TNCs) use global labour arbitrage to create “global labour value chains” to protect their profit margins, so that decentralised global production is associated with the growing concentration of profits and economic power, (Intan Suwandi, Value Chains: The New Economic Imperialism, Monthly Review2019), but the coronavirus pandemic’s bull-whip disruptive effect impacted on the supply chain gridlock (Suwandi, 2021) to spur the rollback of labour rights on issues from decent pay to safe workplaces.
“No one wanted to leave the union, but it was a matter of survival,” labour unionist Phacharee told the Thomson Reuters Foundation, as Sunstar Engineering – based near Bangkok – confirmed that the sackings had happened but denied singling out unionised workers. The factory lists Honda, Yamaha, Harley-Davidson, General Motors and Isuzu among its global buyers.
This comes at a time when about 2.5 billion people – more than 60% of the world’s workforce – are informal workers, leaving them particularly at risk of being underpaid, overworked and abused, the International Trade Union Confederation (ITUC) revealed.
That transnational corporations often than not to openly exercise their ‘collective’ power to pressure national governments to implement business-friendly labour control is a fact. During the 1970-2000 period of Malaysia industrialisation, TNCs semiconductor firms like Harris, AMD and Motorola were collaborating with Henry Kissinger (then an inward investment advisor to the Indonesian Government) and Jack Welsh of GE and the AFL-CIO in meddling the industrial actions by Malaysian labour by blatantly indulging in union busting (seeBhopal, University of North London).
Also, in response to the increasing number of labour disputes in Korea in 2003, the Seoul Japan Club, an association of Japanese TNCs in Korea, publicly expressed a strong concern that ‘the labour-friendly intervention of Korea’s new government would undermine Korea’s policies to attract foreign investment as well as the image of Korea in the world market’ (Chosun Daily 30 May 2003).
Indeed, TNCs are more than eager to re-allocate to alternative FTZs and EPZs, and it is an inherent fear to labour movement organisation which is affiliated to foreign-invested firms. It is increasingly clear that TNCs shall solicit government intervention on behalf of firms whenever there are workers’ struggles. The intense competition between countries to attract, and host, more capital by offering favourable conditions greatly boosts the mobility of capital than labour employment, (pursue to such reports in the 2003s, see Militant Unionism Kicks out Foreign Investment and Drives National Economy into Collapse, Chunganag Daily, 25 and 26 August, Chosun Daily 26 August, Donga Daily 26 August).
The fact that Nestlè Korea can recoup its investment within a year is not unrealistic because in many developing countries in the 1970s were enticing monopoly-capital where, for example in Malaysia, there is even a capital allowance scheme for building and plant expenditures incurred, and when incorporated with the accelerated depreciation allowance incentive, companies will virtually have 90% of eligible capital expenditure completely written off within 5 years.
Sri Lanka, a country across the other side of the South China Sea on the Indian Ocean, is dependent on the same products for export as South Korea, faces a similar situation. This enhances monopoly-capital to seek, and secure, a viable basis for exploitation of labour. Typically, it has become a competition among corporation rivals to attract more investment so the country has become a ‘race-to-the-bottom’ of the worst labour conditions among this category of labour-depressed, and oppressed, countries.
To make garment-producing firms to remain by reinvesting their earnings to finance further industrialisation so as to attract more new investment – this is a great concern for the Cambodian government which is dependent on foreign currency to development. Under such national industrialisation initiative, labour is precariously harmed.
In Myanmar, Myan Mode – the Yangon factory that supplies to Mango and Zara retailers – finally agreed in principle to rehire hundreds of other fired union members when business picks up as and when the pandemic eases.
According to the Solidarity Centre, “It’s a mild victory but it’s remarkable how hard the brands fought against what is a very clear case of union busting,” said Andrew Tillet-Saks, the labour campaigner based in Myanmar. “It’s clear that the brands hold leverage,” he added. “The fact that they don’t step in immediately shows that their commitments to sustainability in the supply chain are nonsense.”
Meanwhile, in the Philippines, the Covid19 pandemics is paving way for labour malpractices where some struggling companies are using Covid-19 fallout as an excuse not to give laid-off employees their entitlements.
A worker, seeking for legal advice, came to the Union of Catholic News. After working for 27 years in her company, the worker could not work anymore because the company is closing 13 outlets in Manila and filing for bankruptcy. The company had asked her to sign a “voluntary resignation” letter to receive her salary for the whole year.
The Philippines Supreme Court once ruled that “resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.”
In short, the unnamed worker’s “voluntary resignation” absolved the company from paying her a severance pay. The worker merely received the salary for the entire year but not a single centavo to compensate her for 27 years in the company.
In May 2014, NXP Semiconductors – a supplier to Apple in the Philippines – was accused of anti-union activity by sacking 24 union workers. When Apple first started its iPhone production with Foxconn in China, it encountered various labour problems and disputes, (STORM, 2021); see also Marisol Sandoval‘s Foxconned Labour in Christian Fuchs and Vincent Mosco (Eds.) Marx in the Age of Digital Capitalism, 2015.
On the commodity value chain, for each iPhone 4 imported from China to the United States in 2010, retailing at $549, about $10 went to labor costs for production of components and assembly in China, amounting to 1.8 percent of the final sales price, (Jason Dedrick, Capturing Value in Global Networks: Apple’s iPad and iPhone, Paul Merage School of Business, University of California, Irvine, July 2011).
Meanwhile, in Thailand, in order to control the spread of the COVID-19 pandemic, the Thai junta government announced an emergency decree which applies to all areas in Thailand from 26 March to 30 April 2020 (“Emergency Decree”) that on 28 April 2020 was extended until 31 May 2020 (“Emergency Decree Period”). Under the Emergency Decree, in pursuant of which is a notification of the Ministry of Labour’s referral of unsettled labour disputes to the labour relations committee for settlement and prohibition on employers to cause a lockout or employees to cause a strike during the period of the emergency situations in accordance with the laws on public administration in emergency situations.
“Clearly some employers believe they can take advantage of the Covid-19 pandemic and economic slowdown to violate workers and their rights with impunity,” said Robert Pajkovski, Thailand programme director at the Solidarity Centre, a US-based charity; seeThe Thai Labour Movement: Strength Through Unity.
When members of the National Union of Workers in Hospital Support and Allied Services, or NUWHSAS, were arrested in 2020 while protesting outside the public hospital in Ipoh, Malaysia, these members are contracted by the UEMS Edgenta Berhad healthcare support company, which manages the hospital; UEMS is an offspring of rentier capitalism in the country infused with oligarchs’ cronies that are engendered by clientelism (Weiss 2020) which has embedded in, and integral to, political offices where dominant intermediaries become the providers and funders of capital, other than the state itself, and through local level ties with highly personal connections have partisan linkages to capital financialization, (newmandala, October 2020).
UEMS Edgenta had embarked on purported union-busting tactics such as denying proper PPE equipment for union members. Union members also claimed that they were allegedly denied the monthly special government allowance worth RM600 (US$140) meant for frontline workers, and were instead given a one-off cash token worth RM300.
2] ORPHANS OF THE EMPIRE
As Top Glove’s main raw material is latex, we need to tell the story of rubber which is inextricably interwined with British colonialism, rise of local mercantile-capitalism, and perpetuated with neo-imperialism, and continue in modernity as part and parcel of financialization capitalism in the country that captures two-third of global production of rubber gloves.
British colonists introduced rubber to the then Federated States of Malaya in the 1870s, and the plant – originally from the Brazilian Amazon forest – survives in the country’s hot and humid climate marvelously to quickly becoming a major export industry. It gave rise to the emergence of British agency houses (like the Sime Darby, Guthrie, Harrisons and Crosfield financially supported by the Standard Charted and the Hong Kong and Shanghai Bank) to own and control the plantations, besides acting as the intermediaries by sending these rolled rubber sheets to England’s manufacturing plants.
The tale of how one Henry Wickham in 1876 “collected” over 70,000 hevea seeds along the Tapajós River is that of the romantic legend of the British Empire. By his own account, Henry “gave” the seeds to Joseph; Joseph Hooker was the eminent botanist who served as director of the Royal Botanic Gardens, London. Some seeds were brought from Kew Garden in London to Singapore, then over to the mainland peninsula by H.N. Ridley who was the man responsible for turning Kuala Kangsar into the first rubber industry district in the country.
With western colonialism in motion, Britain’s ‘forward movement’ in Malaya after the 1870s resulted in the country’s greater integration into the international economy that greatly assisted to facilitate the production of mineral and agricultural commodities. Concurrently, labour migration became a fundamental component of Malaya’s economic growth model, and the associated illed social structures that followed.
Modern days Malaysia’s plantations give glove manufacturers easy access to a crucial raw material: the oozed white sap known as latex or Devil’s Milk – a name given owing to the harsh and misery environment where exploitative tappers worked in the Amazon and Africa (JohnTully, The Devils Milk: A Social History of Rubber, NYU Press, Monthly Review Press 2011).
Capital, as Marx once wrote, comes into the world “dripping from head to foot, from every pore, with blood and dirt” , and the deep alienation of human beings from their environment in the form of a “metabolic rift” – the ecological disruption in their interrelations with nature as stated by John Bellamy Foster, Marx’s Ecology (New York: Monthly Review Press, 2000), ix.
The natural rubber gloves make up less than half the world market, partly because of some personal allergic skin reactions, Malaysia’s Petronas provides local glove manufacturers ample supplies of the petrochemicals needed to make synthetic components to produce nitrile rubber – a nitrile-containing polymer for usage in latex-free laboratory and medical gloves.
The development of the rubber industry, thus reinforced the connections, and the ensuing contradictions, between Indian labour immobility and capital movement. Indeed, both the Indian and Malayan colonial administrations colluded strategically in planning and organising Indian labour migration to Malaya.
Since rubber cultivation and latex tapping necessitated a large, cheap and “disciplined” workforce that had to be settled and organised to work under pioneering conditions in the country, British India with its teeming poverty-stricken millions and caste-ridden society was the preferred provider for this labour to serve the British colonial capital that improperly appropriated the economic surplus that materially and substantially aided their own industrial transition from the eighteenth century onward, (Mohamed Amin and Malcolm Caldwell, Malaya: The Making of a Neo-Colony, Bertrand Russell Peace Foundation, 1977; and Monsoons STORM, 2016); on India’s drain of wealth, seePatnaik and Patnaik, 2021).
The outlook is particularly gloomy for the then Malaya’s marginalised South Indian plantation workers who, left behind in enclosed settlement plantations, became “orphans of empire” that are minutely documented by Amarjit Kaur‘s account of Indian migrant workers in Malaysia: parts 1, and part 2 in newmandala.org and Prakash C. Jain, Exploitation and reproduction of migrant Indian labour in colonial Guyana and Malaysia; see also STORM 2020; STORM 2021).
The plantation system was based on the super-exploitation 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 labourer.
3] LABOUR BONDAGE UNDER MONOPOLY-CAPITAL
By 2010, 79 percent of the world’s industrial workers lived in the Global South, compared to 34 percent in 1950 and 53 percent in 1980, (Smith, Imperialism in the Twenty-First Century, p.101).
The twenty-first century monopoly-capitalism is scooping returns accruing from land and investment on real estates, from natural resources and long-term commodity contracts.
This glove industry’s raise to global dominance has created a huge need for foreign workers, leading to controversy over their treatment. The US government had once barred imports of the products from two Top Glove units due to “reasonable evidence of forced labour.”
A Guardian investigation reported that two giants in rubber glove production, Top Glove and WRP, were allegedly subjecting migrant workers from Nepal and Bangladesh to excessive overtime of up to 160 hours a week, “unsafe” factory conditions, confiscated passports, high recruitment fees that kept them in debt bondage and, in the case of WRP, salaries withheld for months.
For instance, workers from Bangladesh alleged that they had paid recruitment fees of up to RM$20,000 (£3,700) and workers from Nepal said they had paid up to RM$7,000 (£1,300) to agents in their home countries to come to work for Top Glove in Malaysia. In a statement, Top Glove denied imposing recruitment fees higher than 20% of the workers’ salary, and said it complied with local laws. However, it was even alleged that their salaries were withheld for up to three months at a time.
The Thomson Reuters Foundationreported, in December 2018, that workers in Top Glove have worked excessive overtime and in some cases exceed the legal limit to help clear debts to recruitment agents.
The exposè prompted investigations by the British government after it found some Top Glove supplies had been used in its hospitals, and by Australian rubber giant Ansell, (theedgemarkets February 01, 2019).
Both Top Glove and WRP were found to be producing medical gloves for brands sold by NHS Supply Chain, the organisation which supplies about 40% of the British National Health Service (NHS) products. NHS Supply Chain has confirmed to The Guardian that it is investigating the allegations; the company has a code of conduct to prevent any forced labour or modern slavery conditions in its supply chain.
In a statement, the UK Department of Health said: “In line with the government’s policy and leadership on modern slavery, we take any allegations of this kind incredibly seriously and are working with NHS Supply Chain to ensure that these issues are investigated as a matter of urgency.”
EPILOGUE
With superb corporate profit-generation, Top Glove Corp Bhd is evaluating a plan for dual primary listing on the Hong Kong Stock Exchange (HKEx), in consideration of raising more than US$1 billion from the listing exercise.
According to Bloomberg data, earnings estimates would be at RM$8.26 billion for FY21 ending Aug 31, 2021, with Maybank IB Research forecasts the highest at RM$11.22 billion, pointing an abundance of Top Glove’s operating cash flow that presents furtherance in profit extraction arbitrage opportunity for monopoly capital between the bourses in Malaysia and Hong Kong.
Knight Frank consultancy firm has estimated that Malaysia capital accumulation of wealth-creation is the 10th fastest in the world, and its Wealth Report 2020 projects that the number of Malaysians with more than US$30 million will swell by 35 per cent between 2019 and 2024, compared with 2 per cent between 2018 and 2019. The CEO of Top Glove has become one of the five new billionaires in the country.
A Global South corporate capital in collaboration with Global North monopoly-capitalists has joined the league of financialization capitalism in binding labour under monopoly-capitalism bondage.
To prepare for her term exams online in June 2020, 18-year-old Veveonah Mosibin built a makeshift wooden platform on a tree top complete with a mosquito net – for better WiFi – on her attempt to get a decent internet connectivity. The Universiti Malaysia Sabah student opted to stay up the tree for 24 hours, equipped with exam supplies, power banks, insect repellent, food and water.
1] THRONES OF IMPERIALISM
The digital divide in a disconnected Borneo jungle landscape is not calling the Alliance for Affordable Internet (A4AI) for Loon LLC – the subsidiary of Alphabet Inc, Google’s parent company that uses high-altitude balloons to bring internet access to rural and remote geographies, Facebook’s Free Basics, Elon Musk’s Starlink satellites, Terragraph: a high-bandwidth, low-cost wireless solution deployed on rooftops to create a mmWave wireless distribution network or Magma mobile networks with shared fibre.
Nor, unlike in Mayan Meso-America or the Majapahit empire in Southeast Asia, where labour is a primary resource consideration as builders of pyramids or palaces. Labour, in an internet world, is but as contributor of information. The post-industrialization in the 21st. century has witnessed an emerging class of clientele capitalists who use their close connection with local political elites and global monopoly-capitalism corporate – within a client-state of neo-imperialism environment – in the ownership of digital technologies to control and dominate resources connected with infrastructural platforms whilst immiserating labour struggle towards better access to economic wealth-sharing embracing a progressive socio-cultural society.
With 1990s’ unrestricted movement of international finance capital, public sector enterprises or government-link companies (GLCs) increasingly are subjected under the bound of financialization capitalism. The metropolitan capital-as-finance, expressed by Patnaik, gets control over Third World resources and enterprises to see the rise to international finance capital in league with the local neocomprador class becoming crony capitalism through the force of accumulation as articulated by Samir Amin (2019) in The New Imperialist Structure, Monthly Review, July 01, 2019. Anchored upon a capital-market system, this leads to the emergence to, and the pervasion of, financialization capitalism in Malaysia.
There is a growing centralisation of political and eonomic power in the Office of the Prime Minister and the Minister of Finance with a confluence of influence of the state over the GLCs that have the concentration of capital and accumulation of capital as Gomez laid out in Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia, and more importantly, by offering higher dividend returns, cooperating closely with those local corporate capital that have connections to Global North monopoly capitalists and through internationalising their operations, they successfully link up electrical and electronic small manufacturing enterprises (SME) with products assembly, supplies and logistics competitiveness into the Global North supply chains.
Within the two decades before the end of the millennium, digital monopolies have overtaken the older oil, automobile and financial monopolies in terms of capital capitalisation. Computers, networks, data centres and servers become the new technologies of capitalism roaming globally: the emergence of a digital system basing on gigantic infrastructural platforms becomes a reality for many bionic businesses, (BCG, Is Your Technology Ready for the New Digital Reality?, Boston Consultancy Group, May 08, 2020, and its The Bionic Company).
adapted from Foundation for European Progressive Studies, Governing Online Gatekeepers: Taking Power Seriously, 2021
Through the ownership and control of information, this emergent class dominates not only labour but digital capital, too. Capital accumulation permeates the entire production chain but through soft elements in the ownership of patents, copyrights, brands and logistical systems by way of financialization capitalism that digitally routed neo-imperialism onto a monopoly-capital pathway.
In this kingdom of infrastructural platforms, the shining knights – lancing on behalf of the national ruling oligarchs – are penetrants in the digital commons of end-using surfing serfs.
Digital infrastructural platforms are not unlike colonial ‘forward movement’ activities where lands are waiting to be discovered and conquered. Whoever gets there first, and holds fast and tight, shall get their information server-riches. The infrastructural platform kings (colonial-feudal lords) positions themselves above users (the colonised), and their data surfing activities (serfs’ farm cultivation), thereby giving them overwhelming privileged access (lordship) to record and retrieve (dictate and dominate) endusers (the serfs) as and when demanded (as surplus value expropriation) under an information-commodity chained monopoly-capital environment (via routers and cloud servers) .
To gain, and accumulate, capital on behalf of the infrastructural platform kingdoms are the telecommunication intermediary knights riding on their Internet of Things to provide, partition and protect, information services to their surfing serfs. It is the emergence of a new business model of large monopolistic firms on digital platforms that are capable of extracting immense amounts of data overwhelming legacy enterprises and suppressing labour empowerment, (Paul Langley and Andrew Leyshon, Platform capitalism: The intermediation and capitalisation of digital economic circulation, 2020).
Some named this as “netarchical capitalism” , where infrastructure is “in the hands of centralized privately owned platforms”, (Nick Srnicek, Platform Capitalism, 2017).
2] SURFING SERFS : DIGITAL LABOUR
Indeed, there are many surrealistic parallels between our current digital ecosystem and a medieval society that best describe the infrastructural platforms, for instance, where the social media ecosystems (Facebook, WeChat, Tik-Tok, Zoom) feel like the air of a countryside faire of a defacto medieval society or a kampung pasar malam (village night market).
In short, these kingly thrones and their digital lords and digital knights as enablers are disrupting sectors from media and communications (see Ad-spending below), to e-commerce and labour markets, cutting off middlemen but installing favoured intermediaries where the digital knights promote and push subtle channels between consumers (the digital serfs) and sellers (the digital lords) the surfing farm products (serfs’ data produce) through digital transactions, but all on-board the kingly thrones of the infrastructural platforms of Googles, Facebook, WeChat etal.
Labour, hence, becomes digital-dehumanised workers where they are mere inputs in an Azeem Azhar’s AI 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 also seeFoundation for European Progressive Studies, Governing Online Gatekeepers: Taking Power Seriously, 2021).
3] THE DIGITAL KNIGHT
Telekom Malaysia Bhd (TM) has dismissed claims by certain quarters that the government-linked company (GLC) has been monopolising the country’s telecommunication industry, thus making it difficult for other telco players to grow.
The emergence of a new class of compradore capitalist under digital domain has to be narrated in a fresh perspective. In a post-independence environment with an ardent economic nationalism inspiration, to cultivate support from their respective political bases, often ruling elites in alignment with economic oligarchs would adopt rentier capitalism to retain and sustain their power. They might adopt this clientelism as solicitations for votes at the grassroots level, allowing ruling elites the party patronage, “effectively partisanizing them and ensuring ground-level officials with whom most voters interacted with ……are political party loyalists” (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).
It is part of the rent-seeking ethos surrounding the particular burden of privilege class in the oligarchy community under clientelism capitalism. Under this format of clientelism, goverment-link companies are formulated to entice loyalty, and to retrieve the generous accumulation of surplus wealth generated. This GLC clientelism capital nowadays not only linked to Global North monopoly capital, but often inconspicuous is the GLC-SOE (state-owned enterprise) partnership whereby countries controlling very powerful enterprises could implement major projects, completely bypassing the private sector, (Gomezet al, China in Malaysia: State-Business Relations and the New Order of Investment Flows), where SOEs endowed with development financial institutions (DFIs) they can play the dual prime role in financing development and project management.
Take the case of one such GLC entity resting as an intermediary on one side of infrastructural platform thrones of Global North monopoly-capital and at another corner as part of ruling elites’ corporate capital: Telekom Malaysia or TM as the digital knight. As a GLC, it is government-funded, financialisation capitalised from foreign banking institutions and provision of hardware and software by Global North monopoly-capital stakeholders.
Through the years, TM had spent some RM$20 billion in establishing fixed line telephony, over RM$4.4 billion on copper broadband, RM$16 billion for fibre broadband and another RM$2.2 billion on mobile infrastructure in the country excluding other financial outlays that likely obtained healthy returns of investment from over 40 major projects including such real estates development as the Empire City and Emira Residence, Selangor and the Bayu Creek Precinct 7 in Johor state, besides the development of smart cities in the states of Sabah and Sarawak that encompass a broad range of digital transformation activities, including as the Cloud Service Provider to government services, education, and transportation – all beneficiaries to rentier capitalism.
As being the “last-mile” controller to the internet world, all other telecommunication broadband providers like Digi, Maxis, Time, P1, Yes, Celcom, etc. have to be dependent upon accessibility to the fibre optics and wireless connecting hubs to reach their eventual site destinations for their respective end users. In a sense, TM is the shining knight intermediary controller dictating, and dominating, all the surfing serfs of endusers data crunching and information gathering needs.
Telekom Malaysia [ TM ] as the “last-mile” controller
According to the World Bank Group, Telekom Malaysia (TM) has such a strong market dominance which essentially stifled competition and led to poor coverage and high prices for broadband internet in the country.
TM evolves from its colonial days, when in 1874, the first telephone line in Malaysia was laid, and by 1891 the first telephone exchange was operational in the peninsula capital of Kuala Lumpur. In 1946, a state-run telecommunications agency, Jabatan Telekom Malaysia (JTM) – TM former entity – became a government department. The country’s privatization and deregulation processes in the 1980s witnessed a split: JTM became the industry regulation arm, and remained a government-run department, whilst JTM’s fixed-line and mobile telecommunications operations became Telekom Malaysia (TM) where it will provide DSL ports with high-speed access technology that transports data and multimedia over the last mile of copper telephone lines to other broadband providers.
While TM can be credited for playing an integral role in the development of the telecommunications sector in Malaysia, its dominance made it quite difficult for competitors to step in and thus, restraining market. After all, TM is holding over 90% of the country’s broadband offering and the underground ducts (carriageways) which limits the choices in other internet service providers to connect directly to their endusing consumers.
Therefore, TM as an utility provider assumes as the de facto natural monopoly on the country’s fixed-line telecom market, and as a GLC the given franchise monopoly country’s leading intetnet provider, TMNet, which is also the sole broadband provider in the country. TM takes advantage of the industry’s high barriers to entry by creating a “moat” around its business operations because of significant amount of capital required to acquire and install the fixed assets. Secondly, TM has been operating on a large scale for such prolonged time span that it is so much more efficient than any emerging single small-scale operator because the latter costs are likely higher due to limited economies of scale and learning curve experience.
Capital will use whatever it demands to create monopoly and extract surplus, not just directly from labour, but also as monopoly rent from land, industrial produce and lately, digital-generated production.
Foxconn, the company that manufactures the actual Apple products, gets a tiny fraction of what Apple receives. It has to invest in factories, carry inventory and pay the salaries of its workers. Apple’s monopoly is built on its monopoly brand and designs, and control over the entire supply chain.
TM, similarly has the franchised monopoly as a GLC, owning the national digital telecommunications sector and controlling upstream and downstream the supply chain. With the unveiling of the Malaysia Digital Economy Blueprint (MyDigital) on 19th. February 2021 – an investment of RM21 billion over the next five years through the National Digital Network (JENDELA) project to strengthen the existing connectivity – TM as a GLC shall execute the nationwide rollout of 5G, and will be given relevant spectrum to own, execute and manage the 5G infrastructure.
Most investment analysts agree that Telekom Malaysia Bhd (TM) is a key beneficiary given its global network of over 20 submarine cable systems and over 560,000km of fibre network across Malaysia. “We raise our FY20-FY22 earnings forecasts for TM by 4% to 16% after factoring in higher data and internet revenue”, so said PublicInvest (theedgemalaysia, 2021).
TM together with Microsoft, Google and Amazon as cloud service providers (CSPs) have been given conditional approval by the government to manage and build hyperscale data centres and cloud services for the public sector. TM, as the only home-based CSP, stands to benefit from the public sector’s recurring and growing revenue base, said Kenanga Research; the CSPs will total between RM12 billion and RM15 billion over the next five years.
According to Fitch Solutions, there is potential lack of transparency because the JENDELA rollout is through a Special Purpose Vehicle; three crony ICT companies have been appointed as management service providers (MSP).
Technological firms capture market power in the provision of, and production of intangible assets. This is where government protections of intellectual property have the effect of locking in the monopoly power from intangible asset creation. This process becomes an enclosure of human knowledge barricading its material contents disclosure to public knowledge. This assertion of digital monopolies is also definitively invading upon more and more areas of production, distribution and in the circulation of “soft material” goods.
A simple example would be the Microsoft company when it became the key player in the software market, with DOS, later Windows, as the monopoly supplier of the operating system of the personal computers. With this monopoly, they also built a software monopoly over products that can only run on its operating system: the word processing, spreadsheets, databases. Since then, with TRIPs/WTO (Agreement on Trade-Related Aspects of Intellectual Property Rights is an international legal agreement between all the member nations of the World Trade Organization), the intellectual property regime has only strengthened, (Cédric Durand, William Milberg, Intellectual Monopoly in Global Value Chains, 2018).
As a result, intellectual monopoly reinforces the deepening of the smiley curve as illustrated below:
Instead of exerting downward pressure in the middle of the curve – the part on processes of production – intellectual monopoly has inadvertently points to an upward pressure at both ends of the smiley curve where the control over intangible assets (like R&D and design) is most concentrated. We shall express that this upward pressure on both left and right sides of the curve is a resultant outcome from dynamics arising from the growing role of intangible assets in the value chain processes, and also from tighter Intellectual Property Rights. This means that the market power of leading firms – the product/service initiators or front-runners – is often enhanced by intellectual monopoly endorsement which is fueled on one part by the dynamic advantages arising from global value chains network externalities, and on the other side, by the increasing returns on intangibles and legally-enforced proprietary control over standards, technologies and brands, (UNCTAD, The Digital Economy Report 2019: Value Creation and Capture: Implications for Developing Countries).
The implications for third world countries are that due to the monopoly-capital competition dynamics in the Global North, developing-country platforms that are trying to scale up typically face an uphill battle. The dominance of global digital platforms, their control of data, as well as their capacity to create and capture the ensuing value, tend to further accentuate concentration and consolidation rather than reduce inequalities between and within countries.
Secondly, in the global “data value chain”, many countries are already entrenched in subordinate positions, with value and data being concentrated in the few global platforms and other leading transnational corporations.
Thirdly, the surfing serfs of the world are increasing digitised into slavery to the triad of capitalism monopoly-capitalism and financialization capitalism where labour is outsmarted by machines.
EPILOGUE
Veveonah’s villagers have since hoisted mobile phones on bamboo poles after turning on their “hotspot” function to allow every community members in the vicinity to piggyback on that phone’s coverage.
They are surfing serfs entrapped to the kingly infrastructural platform thrones by a digital knight.
In his 1878 book, Anti-Dühring, Engels quotes Marx to describe the way machinery threatens and coerces workers. “Machinery becomes the most powerful weapon in the war of capital against the working class; that the instruments of labour constantly tear the means of subsistence out of the hands of the labourer, that the very product of the worker is turned into an instrument for his subjugation.”
The Malaysian Communications and Multimedia Commission (MCMC) recently installed telecommunication towers connecting to 4G in Kampung Sapatalang, district of Pitas, Sabah, where Veveonah lives.
BIBLIOGRAPHY
1) Deloitte, The Next Wave : Emerging Digital Life in South and Southeast Asia
2) Ursula Huw, Labor in the Global Digital Economy: The Cybertariat Comes of Age
To prepare for her term exams online in June 2020, 18-year-old Veveonah Mosibin built a makeshift wooden platform on a tree top complete with a mosquito net – for better WiFi – on her attempt to get a decent internet connectivity. The Universiti Malaysia Sabah student opted to stay up the tree for 24 hours, equipped with exam supplies, power banks, insect repellent, food and water.
1] INTRODUCTION
The digital divide in a disconnected Borneo jungle landscape is not calling the Alliance for Affordable Internet (A4AI) for Loon LLC – the subsidiary of Alphabet Inc, Google’s parent company that uses high-altitude balloons to bring internet access to rural and remote geographies, Facebook’s Free Basics, Elon Musk’s Starlink satellites, Terragraph: a high-bandwidth, low-cost wireless solution deployed on rooftops to create a mmWave wireless distribution network or Magma mobile networks with shared fibre.
Nor, unlike in Mayan Meso-America or the Majapahit empire in Southeast Asia, where labour is a primary resource consideration as builders of pyramids or palaces. Labour, in an internet world, is but as contributor of information. The post-industrialization in the 21st. century has witnessed an emerging class of clientele capitalists who use their close connection with local political elites and global monopoly-capitalism corporates – within a client-state of neo-imperialism environment – in the ownership of digital technologies to control and dominate resources connected to infrastructural platforms whilst immiserising labour struggle towards better access to economic wealth-sharing embracing a progressive socio-cultural society.
With 1990s’ unrestricted movement of international finance capital, public sector enterprises or government-link companies (GLCs) increasingly are subjected under the bound of financialization capitalism. The metropolitan capital-as-finance, expressed by Patnaik, gets control over Third World resources and enterprises to see the rise to international finance capital in league with the local neocomprador class becoming crony capitalism through the force of accumulation as articulated by Samir Amin (2019) in The New Imperialist Structure, Monthly Review, July 01, 2019. Anchored upon since 1983, on a capital-market system (Jomo Sundram and Tan Wooi Syn, Privatization and re-nationalization in Malaysia – a Survey, an unpublished working paper, 2005), it leads to the emergence to, and the pervasion of, financialization capitalism in Malaysia.
There is a growing centralisation of political and economic power in the Office of the Prime Minister and the Minister of Finance with a confluence of influence of the state over the GLCs that have the concentration of capital and accumulation of capital as Gomez laid out in Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia, and more importantly, by offering higher dividend returns, cooperating closely with those local corporate capital that have connections to Global North monopoly-capitalists and internationalising their operations, they successfully link up electrical and electronic small manufacturing enterprises (SME) with products assembly, supplies and logistics competitiveness into the Global North supply chains.
Within the two decades before the end of the millennium, digital monopolies have overtaken the older oil, automobile and financial monopolies in terms of capital capitalisation. Computers, networks, data centres and servers become the new technologies of capitalism roaming globally: the emergence of a digital system basing on gigantic infrastructural platforms and to be a reality for many bionic businesses, (BCG, Is Your Technology Ready for the New Digital Reality?, Boston Consultancy Group, May 08, 2020).
Through the ownership and control of information, this emergent class dominates not only labour but capital as traditionally understood. Capital accumulation permeates the entire production chain but through soft elements in the ownership of patents, copyrights, brands and logistical systems by way of financialization capitalism that digitally routed neo-imperialism onto a monopoly-capital pathway.
In this kingdom of infrastructural platforms, the shining knights – lancing on behalf of the national ruling oligarchs – are penetrants in the digital commons of end-using surfing serfs.
Digital infrastructural platforms are not unlike colonial ‘forward movement’ activities where lands are waiting to be discovered and conquered. Whoever gets there first, and holds fast and tight, shall get their information server-riches. The infrastructural platform kings (colonial-feudal lords) positions themselves above users (the colonised), and their data surfing activities (serfs’ farm cultivation), thereby giving them overwhelming privileged access (lordship) to record and retrieve (dictate and dominate) endusers (the serfs) as and when demanded (as surplus value expropriation) under an information-commodity chained monopoly-capital environment (via routers and cloud servers) .
To gain, and accumulate, capital on behalf of the infrastructural platform kingdoms are the telecommunication intermediary knights riding on their Internet of Things to provide, partition and protect, information services to their surfing serfs. This new ecosystem of digital platforms is transforming the very domain of capitalism. It is the emergence of a new business model of large monopolistic firms on digital platforms that are capable of extracting immense amounts of data overwhelming legacy enterprises and suppressing labour empowerment, (Paul Langley and Andrew Leyshon, Platform capitalism: Theintermediation and capitalisation of digital economic circulation, 2020).
Some named this as “netarchical capitalism” , where infrastructure is “in the hands of centralized privately owned platforms”, (Nick Srnicek, Platform Capitalism, 2017).
2] KINGDOM OF INFRASTRUCTURAL PLATFORMS
In 2019, the largest 100 firms in the world had increased their total market capitalisation by US$12.7 trillion. A third of that increase (US$4.2 trillion) can be said to be accounted for by just seven firms: Facebook, Amazon, Apple, Alphabet, Microsoft (the quintet of ‘FAAAM’), Tencent and Alibaba. The aggressive rally of tech stocks during the COVID-19 pandemic had given due recognition that an entirely new model of value creation was enabled, and enhanced, by and with digital technologies.
A view of Google ecosystem shall give a better understanding of the wide breadth in span, spectrum and specialities of its activities in the digital marketsphere:
Other examples like Amazon’s marketplace or Apple’s Appstore cannot be treated as mere market players – instead, they are creating, and controlling, the entire marketspace: deciding which and when producers and consumers can access their respective markets, on what conditions, and – via algorithms – how the market operates. To be noted, too, is that new online business models like Facebook and Instagram increasingly merge social and commercial activity – and this trend is accelerating, (seeAnreesen Horiwitz (2020), Social Strikes Back).
Other facts shall show that Google has some 90 per cent of the market for Internet searches. Facebook accounts for two thirds of the global social media market, and is the top social media platform in more than 90 per cent of the world’s economies. Amazon boasts an almost 40 per cent share of the world’s online retail activity, and its Amazon Web Services accounts for a similar share of the global cloud infrastructure services market. In China, WeChat (owned by Tencent) has more than one billion active users and, together with Alipay (Alibaba), its payment solution has captured virtually the entire Chinese market for mobile payments; Alibaba estimated to have close to 60 per cent of the Chinese e-commerce market.
It is increasing clear that certain ‘super-platforms’ play a crucial role, through their online platform features, notably their capacity to benefit from networking efforts and (close to) zero marginal costs, which create ‘winner-take-all’ dynamics that they have the profound ability to extract and leverage data from the commercial and social interactions that they facilitate, (Nick Srnicek (2017), Platform Capitalism, op.cit.). In fact, the last decades have seen the creation of a hierarchy yet organised platform ecosystem, characterised by a strong centralisation of power. For instance, by August 2020, the market capitalisation of tech firms Apple, Amazon, Microsoft, Facebook and Alphabet had reached over US$9 trillion. Together they own around 70 platforms, (seeSergei Klebnikov, US Tech Stocks Are Now Worth More Than $9 Trillion, Eclipsing The Entire European Stock Market, Forbes, 28 August 2020, and refer: Jean-Christophe Plantin (2016) Infrastructure studies meet platform studies in the age of Google and Facebook, New Media & Society).
Owing to their organisational size and financial endowments, enveloping overall the digital infrastructural ecosystem, it means that any user has to adapt to the logic of Google Search’s algorithm or to the conditions set by Apple’s Appstore. While the biggest firms compete with each other in certain marketplaces and dedicated marketspace, they can also strategically be global co-ompetitive partners, competing yet collaborating at the same time. For instance, in the past 15 years, Alphabet has been paying Apple to ensure Google Search remains the default search engine on Apple devices.
According to the US Justice Department, these annual payments now total between US$8 billion and US$12 billion a year.
Therefore, the biggest online platforms pursue strategies of vertical integration, meaning that they aim to control multiple aspects of a particular value chain. They can also leverage their power in one market to gain a foothold in adjacent markets, increase control over customers and suppliers, and make it impossible for potential competitive rivals to enter existing dominated markets; on their respective expanded activities, see examples in Foundation for European Progressive Studies, Governing Online Gatekeepers: Taking Power Seriously, 2021.
With ongoing surge in demand for infrastructural platforms’ services, now and in the near future, this means that cloud-based services across the world, and in SE Asia region in particular, are expanding, too. This demand for Big Data storage, massive processing and critical risk management of installed systems has prompted big corporates such as Google, Alibaba Group, Amazon Web Services (AWS) to expand their cloud infrastructure footprint widely in Malaysia during the last few years, (ChannelAsia 08 October, 2018; Nikkei 04 May, 2019; The Star 09 June, 2020).
Some of the input to the local Digital Infrastructure or DI is the physical medium, the infrastructure through which the traffic generated by the internet flows. This includes everything from telephone wires, cables (including optic fiber and submarine cables) to microwaves, satellites, and mobile technology such as fifth-generation (5G) mobile networks, IoT, and servers as well. On the server-side, major companies like Amazon or Microsoft stepped in to build and provide this growing digital infrastructure known as “the cloud”. Besides cables, cloud, and other things mentioned above, the data centers (hardware and software) and their administration is also a part of wide digital infrastructure work.
Therefore, the Digital Infrastructure growth would ensure, especially after the introduction of the 12th. Malaysia Plan (12MP) by end of next quarter 2021, the country’s datacenter business to grow towards new and greater heights.
Not only the porting of software into hardware installations has taken a significant importance, but the resultant change in doing business. The subset of business marketing in promotion of products and services has changed dramatically. The digital advertising revenues, for example, have overtook broadcast television’s in 2013, having earlier overtaken satellite/cable television, indicating that digital advertising is rapidly replacing other media forms, (IAB Internet Advertising Revenue Report: 2013 Full Year Results, April 2014). It is forecasted, post-Covid19, that there will likely be a 5.8% recovery in global adspend by 2021:
Indeed, there are many surrealistic parallels between our current digital ecosystem and a medieval society that best describe the digital ecosystem, for instance, where the social media ecosystems (Facebook, WeChat, Tik-Tok, Zoom) feel like the air of a countryside faire of a de facto medieval society or a kampung pasar malam (village night market).
In 2013, Apple had about 80,000 employees worldwide, Google around 40,000, and Facebook about 4,600; when Facebook purchased WhatsApp – for US$19 billion – the mobile-messaging company had only fifty-five employees.
To the kingdoms of infrastructural platform thrones, their supreme reign is on royalty, and loyalty, to each economic imperial, yet digital, domination. Their surfing serfs are digital users participating in respective platforms (with Window, Apple, Unix, iOS, Android, KaiOS, Sailfish OS, Harmony OS) often with only the barest knowledge of the data they surrender, and that data is then used to generate value exclusively for these platform owners.
However, with introduction of the computer and networks, and the advent of smart phone, advanced robotics, artificial intelligence – all these existing and emerging industrial-tech models eliminated plenty of jobs (by replacing people directly or by sending them from their Global North businesses to offshore workplaces), and through the circuitry in monopoly-capital, most of the jobs directly created by their production are in other countries, predominatly in the Global South as call-centres, cloud-servers, systems integrators, routers distributors commonly. However, these types of jobs can be supported at by anyone in any place at any time under any computerised platform.
In short, these kingly thrones and their digital lords and digital knights as enablers are disrupting sectors from media and communications, to e-commerce and labour markets, cutting off middlemen but installing favoured intermediaries where the digital knights promote and push subtle channels between consumers (the digital serfs) and sellers (the digital lords) the surfing farm products (serfs’ data produce) through digital transactions, but all onboard the kingly thrones of the infrastructural platforms of Googles, Facebook et al.
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 seeFoundation for European Progressive Studies, Governing Online Gatekeepers: Taking Power Seriously, 2021).
This model is what technology expert Azeem Azhar calls the ‘AI lock in loop’ where, as the tech companies deploy products and services, they also collect data about their consumers’ use of those products and services. Through machine-learning processes performed on those collated data, these supra-business entities envisage in offering opportunities towards the development of better products and services. It is by integration of multiple data-rich digital assets into a single platform that gives such tech companies access to the entire vertical product chains (examples like Google or Grab siphoning off personal biodata and geographical locations) and the supply-chain capacity to expand horizontally into new products and services with relative ease and effectiveness.
Google, Facebook, WeChat or Grab becoming cloud-servers, WhatsApp communications and Instagram media aggregator, website-e-commerce internationally, investment data mining, respectively.
Capitalism is constantly inventing and reinventing its reserve army of labour. Often, it shall tap into assorted branches of society and sectors of industry where labour has been lying latent. Thus, alongside the stagnant and floating forms, Marx acknowledges another category of flexible labour, the “latent” category, a sort of reserve’s reserve army of labourers. “As soon as capitalist production takes possession of agriculture,” he says, (like FELDA’s FGV and corporate plantations owners like Sime Darby, Good Hope and Boustead), “and in proportion to the extent to which it does so, the demand for a rural working population falls absolutely,” (to be replaced by Indonesians, and later Bangladeshi migrant workers). “Part of the agricultural population,” says Marx, “is therefore constantly on the point of passing over into an urban population or manufacturing proletariat. There is a constant flow from this source of the relative surplus population. But the constant movement towards towns presupposes, in the countryside itself, a constant latent surplus population”, (see Zhun Xu’s two articles in the Monthly Review on depeasantrisation and industrialisation with capital accumulation in China; an exploratory study on the Malaysian experience is here).
In short, jobs are becoming more and more precarious, the stagnant category of the reserve army of labour or relative surplus population, characterized by low and static wages, low hours, and unregulated, unstable working conditions (Karl Marx, Capital, vol. 1 [Penguin, 1976], 796–98).
The new platform monopolies that are now being created use the help of venture/finance capital, the same ones that helped Google, Amazon and Facebook to build their initial monopolies. Their business models helps these platforms to enclose the informal sphere of the economy. Uber and Airbnb convert individual vehicle and house owners to what they believe as independent contractors, but in reality are glorified yet untitled serfs! This semblance of a ‘sharing economy’ is, in reality, the enclosure of personal property by digital monopolies and creating new forms of casual labour.
Forty percent of hourly paid workers in the United States between the ages of 26 and 32 do not know their work schedules a week in advance (Richard V. Reeves, “Capitalism Is Failing. People Want a Job with a Decent Wage. Why Is that So Hard?,” Guardian, April 24, 2019).
This suggests that the actual U.S. reserve army of labour in terms of working hours lost is far beyond what is indicated by the usual data on unemployment and underemployment. It is the same situation in many developing countries where there are available figures on employment and unemployment, but the underemployment statistical data is outstandingly not easily available, (DOSM, 2020).
With the diminishing share of high-quality jobs and the rapid growth in the skew toward low-quality jobs, more and more workers are faced with financial disincentives to working (with its added intended costs). This particular trend toward low-quality jobs reflects a “relative devaluation of U.S. domestic labor,” constituting a higher rate of exploitation of U.S. workers, through forced reductions in the historically determined value of labour power. Not only are wages and hours low, but many workers, such as those employed in expanding packing and freight warehouses, are subjected to relentless speedups and evermore sophisticated monitoring systems, besides masking socio-economic inequality by concealing the rich from public accountability – see a case-study by Christian Fuchs, An Alternative View of Privacy on Facebook.
Relationally, and increasingly, there is trend of local corporate capital forming businesses – supported by IT infrastructure equipments bought from Global North and assisted by highly experienced operational staff from developed core centres – that introduce irregular working hours which would materialised as zero-hour contract ( in the beginning, it was known as on-demand work ) that embraces employment without guaranteed working hours, introduction of online labour platforms, voucher-based work or the ‘gig’ economy emerges as the IT-initiated neo-Imperialism penetration spreads and widens with labour exploitation furrows in depth.
Monopoly-capital radiates to Global South in search of low unit labor costs worlwide to get higher profit margins whilst attaining overall profits. Data on unit labour costs show that countries with the highest participation in labour-value chains – the top three being China, India, and Indonesia – also have very low unit labour costs, seeIntan Suwandi, Labor-Value Commodity Chains – The Hidden Abode of Global Production, Monthly Review, July 2019 where the economic neo-imperialism is still relevant in today’s digital economy with the generation of, and by, “soft” intellectual elements, but higher, and with the immediate instancy of capital accumulation.
On top of this heap, that the wealthiest figures are tech capitalists are unsurprising. The top nine wealthiest people include : Elon Musk, Jeff Bezos, Bill Gates, Mark Zuckerberg, Larry Page, Pony Ma and Jack Ma (not related to each other). Their excessive wealth points to the tensions within private ownership of the means of production, where competition leads to monopolies and oligopolies. The infrastructural platforms have indeed became double-sided monopolies, a monopoly to their suppliers and monopoly to their buyers, for examples, Alibaba and Amazon not only holds inventories in their warehouses, but also sells goods that it does not store.
The Jeff Bezos Amazon factor The Bezos’ rate is equivalent to US$149,353 a minute. To put things in perspective, Bezos makes more than three times what the median U.S. worker makes in year – US$45,552, according to data by the Bureau of Labour Statistics – in one minute, source: Business Insider 2019.
Comparatively, at the centre of an Ecological-Epidemiological-Economic crisis, five captains of the corporate capital became the new millionaires in the country with 2020 ending while the income inequality in Malaysia persists to widen:
Telekom Malaysia Bhd (TM) has dismissed claims by certain quarters that the government-linked company (GLC) has been monopolising the country’s telecommunication industry, thus making it difficult for other telco players to grow.
The emergence of a new class of compradore capitalist under digital domain has to be narrated in a different perspective. With a post-industrialisation spectre of clientelism capitalism injecting into the digital supply chain intermediary, a fresh dialogue is needful. In a post-independence environment with an ardent economic nationalism inspiration, to cultivate support from their respective political bases, often ruling elites in alignment with economic oligarchs shall adopt rentier capitalism to retain and sustain their power. They may adopt this clientelism as solicitations for votes at the grassroots level, allowing ruling elites the party patronage, “effectively partisanizing them and ensuring ground-level officials with whom most voters interacted with ……are political party loyalists” (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).
It is part of the rent-seeking ethos surrounding the particular burden of privilege class in the community under clientelism capitalism. Under this format of clientelism, goverment-link companies are formulated to entice loyalty, and to retrieve the accumulation of surplus wealth generated. This GLC clientelism capital nowadays not only linked to Global North monopoly capital, but often inconspicuous is the GLC-SOE (state-owned enterprise) partnership whereby countries controlling very powerful enterprises could implement major projects, completely bypassing the privatesector, (Gomezet al, China in Malaysia: State-Business Relations and the New Order of Investment Flows), where SOEs endowed with development financial institutions (DFIs) they can play the dual prime role in financing development and project management.
Take the case of one such GLC entity resting as an intermediary on one side of infrastructural platform thrones of Global North monopoly-capital and at another corner as part of ruling elites’ corporate capital: Telekom Malaysia or TM as the digital knight. As a GLC, it is government-funded, financialisation capitalised from foreign banking institutions and provision of hardware and software by Global North monopoly-capital stakeholders.
Through the years, TM had spent some RM$20 billion in establishing fixed line telephony, over RM$4.4 billion on copper broadband, RM$16 billion for fibre broadband and another RM$2.2 billion on mobile infrastructure in the country excludingother financial outlays that likely obtained healthy returns of investment from over 40 major projects including such real estates development as the Empire City and Emira Residence, Selangor and the Bayu Creek Precinct 7 in Johor state, besides the development of smart cities in the states of Sabah and Sarawak that encompass a broad range of digital transformation activities, including as the Cloud Service Provider to government services, education, and transportation – all beneficiaries to crony capitalism.
As being the “last-mile” controller to the internet world, all other telecommunication broadband providers like Digi, Maxis, Time, P1, Yes, Celcom, etc. have to be dependent upon accessibility to the fibre optics and wireless connecting hubs to reach their eventual site destinations for respective end users. In a sense, TM is the shining knight intermediary controller dictating, and dominating, all the surfing serfs of endusers data crunching and information gathering needs.
Telekom Malaysia control of the “Last-Mile”
According to the World Bank Group, Telekom Malaysia (TM) has such a strong market dominance which essentially stifled competition and led to poor coverage and high prices for broadband internet in the country.
While TM can be credited for playing an integral role in the development of the telecommunications sector in Malaysia, its dominance made it quite difficult for competitors to step in and thus, restraining market development. After all, TM is holding over 90% of the country’s broadband offering, which limits the choices in internet service providers for consumers.
Capital will use whatever it demands to create monopoly and extract surplus, not just directly from labour, but also as monopoly rent from land, industrial produce and lately, digital-generated production.
Foxconn, the company that manufactures the actual Apple products, gets a tiny fraction of what Apple receives. It has to invest in factories, carry inventory and pay the salaries of its workers. Apple’s monopoly is built on its monopoly brand and designs, and control over the entire supply chain.
Technological firms capture market power in the provision of, and production of intangible assets. This is where government protections of intellectual property have the effect of locking in the monopoly power from intangible asset creation. This process becomes an enclosure of human knowledge barricading its material contents disclosure to public knowledge. This assertion of digital monopolies is also definitively invading upon more and more areas of production, distribution and in the circulation of “soft material” goods. A simple example would be the Microsoft company when it became the key player in the software market, with DOS, later Windows, as the monopoly supplier of the operating system of the personal computers. With this monopoly, they also built a software monopoly over products that can only run on its operating system: the word processing, spreadsheets, databases. Since then, with TRIPs/WTO (Agreement on Trade-Related Aspects of Intellectual Property Rights is an international legal agreement between all the member nations of the World Trade Organization), the intellectual property regime has only strengthened, (Cédric Durand, William Milberg, Intellectual Monopoly in Global Value Chains, 2018).
As a result, intellectual monopoly reinforces the deepening of the smiley curve as illustrated below:
Instead of exerting downward pressure in the middle of the curve – the part on processes of production – intellectual monopoly has inadvertently points to an upward pressure at both ends of the smiley curve where the control over intangible assets (like R&D and design) is most concentrated. We shall express that this upward pressure on both left and right sides of the curve is a resultant outcome from dynamics arising from the growing role of intangible assets in the value chain processes, and also from tighter Intellectual Property Rights. This means that the market power of leading firms – the product/service initiators and front-runners – is often enhanced by intellectual monopoly endorsement which is fueled on one part by the dynamic advantages arising from global value chains network externalities, and on the other side, by the increasing returns on intangibles and legally-enforced proprietary control over standards, technologies and brands, (UNCTAD, The Digital Economy Report 2019: Value Creation and Capture: Implications for Developing Countries).
The implications for third world countries are that due to the monopoly-capital competition dynamics in the Global North, developing-country platforms that are trying to scale up typically face an uphill battle. The dominance of global digital platforms, their control of data, as well as their capacity to create and capture the ensuing value, tend to further accentuate concentration and consolidation rather than reduce inequalities between and within countries.
Secondly, in the global “data value chain”, many countries are already entrenched in subordinate positions, with value and data being concentrated in the few global platforms and other leading transnational corporations.
Thirdly, the surfing serfs of the world are increasing digitised into slavery to the triad of capitalism. monopoly-capitalism and financialization capitalism where labour is outsmarted by machines.
Surfing serfs are mere digital slaves of processed data to the kingly infrastructural platform thrones.
EPILOGUE
Veveonah’s villagers have since hoisted mobile phones on bamboo poles after turning on their “hotspot” function to allow every community members in the vicinity to piggyback on that phone’s coverage.
In his 1878 book, Anti-Dühring, Engels quotes Marx to describe the way machinery threatens and coerces workers. “Machinery becomes the most powerful weapon in the war of capital against the working class; that the instruments of labour constantly tear the means of subsistence out of the hands of the labourer, that the very product of the worker is turned into an instrument for his subjugation.”
The Malaysian Communications and Multimedia Commission (MCMC) recently installed telecommunication towers connecting to 4G in Kampung Sapatalang, district of Pitas, Sabah, where Veveonah lives.
BIBLIOGRAPHY
1) Deloitte,The Next Wave : Emerging Digital Life in South and Southeast Asia
2) Ursula Huw, Labor in the Global Digital Economy: The Cybertariat Comes of Age
3) Prabir Purkayastha and Rishab Bailey, U.S. Control of the Internet, Problems Facing the Movement to International Governance, Monthly Review, July-August 2014.
4) Dallas Smythe, Communications: Blindspot of Western Marxism, Canadian Journal of Political and Social Theory, Vol. 1, No. 3, 1977.
5) STORM, Platform of Thrones Digital Lords and Surfing Serfs.
Towards The Malaysia Narrative 
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