NEOLIBERALISM IS NEO-IMPERIALISM

PROLOGUE

1947, in the Swiss Resort named after: Mount Pelerin Society (MPS) held its first conference. The 39 members were economists, historians, philosophers, businessmen and where nine members later became Nobel Laureates — Hayek, George Stigler, Maurice Allais, Gary Becker, Milton Friedman, James Buchanan, Ronald Coase and Vernon Smith in Economics, and Mario Vargas Llosa in Literature.

1] INTRODUCTION

The MPS’s influence is to spread through opinion makers in journalism and think-tanks, supported by billionaire like Charles Koch. The think-tanks included the Institute of Economic Affairs (UK), Council on Foreign Relations, the Atlantic Economic Research Foundation, the Heritage Foundation and Ford Foundation, Hoover Institution, Foundation for Economic Education, American Enterprise Institute, Center for American Progress, Canadian Fraser Institute and Australian Institute of Public Affairs supported by plutonic billionaire families-like of George Soros, Michael Bloomberg, and Glenn Hutchins, (see Laurence H. Shoup, Monthly Review, May 2021 on key policy formulation and outcomes of major USA think-tanks).

However, much of the intellectual work was completed by University of Chicago’s Milton Friedman, Ronald Coase and George Stigler – working on free trade, the importance of property rights, political freedom and minimal state interference and low taxes.

These neo-liberal views were taken up by UK prime minister Margaret Thatcher (1925-2013) and US president Ronald Reagan (1911-2004), with nearly one third of latter economic advisers being MPS members. The neo-liberal philosophy and its application in economic policy eventually morphed into as the Washington Consensus, first articulated by World Bank economist John Williamson.

The concentration of neoliberal elites and circulation of neoliberal ideals amongst the political class.

2] NEO-IMPERIALISM AS NEW MONOPOLY IN PRODUCTION AND CIRCULATION

The internationalization of production and circulation, together with the intensified concentration of capital, monopolostic transnational corporations (TNCs) whose wealth is nearly as huge as that of many countries, for examples, in 2017 Walmart earned more than the whole of Belgium; Netflix had a greater revenue in 2017 than Malta’s GDP; Apple would be 47th in the world by GDP if it were a country.

The tendency towards the international concentration of capitalism is clearly reflected from Lenin’s contestaton (Imperialism, the Highest Stage of Capitalism, New York: International Publishers, 1939) which points out that imperialism is the monopoly stage of capitalism where markets became competitive stages for global and regional hegemony.

To broaden capital intrusion there is “competition” between firms to seek low labour cost (economic term: labour arbitrage) and low-cost production processes (lean to just-in-time and flexible production), competition for resources and markets (strategic competitive advantages) and marketing on product differentiation (varied products with many features and multi-functionalities at various price structures in different marketspheres).

By 2008, the top one hundred global corporations which had shifted their production foreign affiliates or subsidiaries accounted for 60 percent of their total assets and employment and more than 60 percent of their total sales. The foreign direct investment (FDI) to developing economies was US$694 billion in 2018 making up 58% global FDI share. By engaging in contractual relationships with partner firms but without equity involvement, mostly in the Global South, TNCs were generating about US$2 trillion in sales in 2010 (UNCTAD, World Investment Report: Non-Equity Modes of International Production and Development (Geneva: United Nations, 2011), 131).

Between 1980 and 2013, benefiting from the expansion of markets and the decline in production factor costs, the profits of the world’s largest 28,000 companies increased from US$2 trillion to US$7.2 trillion, representing an increase from 7.6 percent to approximately 10 percent of gross world product, (see Richard Dobbs et al., Playing to Win: The New Global Competition for Corporate Profits (New York: McKinsey & Company, 2015).

Under capitalism, the capitalists are dominant at each level of society, the working proletarians are dominated at each and every stage of labouring activities. When class exists at each economic, political, and ideological (or cultural) level, the understanding of class relationship is to identify where the controlling power ensues. As an instance, the stronghold in the Free Trade Zone (FTZ) or the Export Free Trade Zone (EFTZ) is that of monopoly-capitalism [place] that has aligned with the political elites and compradore capital of a developing country [positions], and by ownership and control of assembly workers [power] is able to extract the surplus value through their labouring tasks.

Those were the resultant outcomes of neoliberalism “free trade” ethos.

3] NEW MONOPOLY OF FINANCE CAPITAL

Secondly, the progress of capitalism to control and concentration generates a malformed development process towards economic financialization.

The international concentration of capital invertibly gives birth to international monopoly-finance capital that ensues the emergence of financialization capitalism (see John Bellamy Foster, The Financialization of Accumulation, Monthly Review vol:62, issue 05 October 2010). Financialization capitalism becomes prominent because the TNCs are unable to find sufficient investment outlets for their huge economic surpluses from production, increasingly turn to speculation within the global financial sphere, (see John Bellamy Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009). Even households had began to be financialized, too (see Costas Lapavitsas, The Era of Financialization, Part 3, TripleCrisis).

From the research of Cheng Enfu and Lu Baolin (Monthly Review May 2021), it is found that the proportion of overseas profits within total profits of U.S. corporations increased from 5 percent in 1950 to 35 percent in 2008. The proportion of overseas-retained profits increased from 2 percent in 1950 to 113 percent in 2000. The proportion of overseas profits within the total profits of Japanese corporations increased from 23.4 percent in 1997 to 52.5 percent in 2008, (Cui Xuedong, “Is the Contemporary Capitalist Crisis a Minsky-Type Crisis or a Marxist Crisis?” [in Chinese], Studies on Marxism 9 (2018).

By a slightly different accounting approach, it was acknowledged that the share of foreign profits of U.S. corporations as a percent of U.S. domestic corporate profits had increased from 4 percent in 1950 to 29 percent by 2019, (John Bellamy Foster, R. Jamil Jonna, and Brett Clark, “The Contagion of Capital,” Monthly Review 72, no. 8 (January 2021): 9).

Further, world wide, within twenty years since 1987, debt in the international credit market soared from just under $11 billion to $48 billion, with a rate of growth far exceeding that of the world economy as a whole, (Cheng Enfu and Hou Weimin, “The Root of the Western Financial Crisis Lies in the Intensification of the Basic Contradiction of Capitalism” [in Chinese], Hongqi Wengao 7 (2018).

4] MONOPOLY OF US$ DOLLAR AND INTELLECTUAL PROPERTY

Again, in Imperialism: The Highest Stage of Capitalism, Lenin stated: “Typical of the old capitalism, when free competition held undivided sway, was the export of goods. Typical of the latest stage of capitalism, when monopolies rule, is the export of capital.” (Lenin, Selected Works, 212).

July 1944, on the initiative of the U.S. and British governments, representatives of forty-four countries gathered in Bretton Woods, New Hampshire, to discuss plans for a postwar monetary system. The documents Final Act of the United Nations Monetary and Financial Conference, Articles of Agreement of the International Monetary Fund, and Articles of Agreement of the International Bank for Reconstruction and Development – collectively known as the Bretton Woods Agreements – were adopted. The Bretton Woods main focus was to construct an international monetary order centered on the U.S. dollar. Other currencies were to be pegged to the US dollar, which was in turn pegged to gold.

The U.S. dollar thus plays the prominent role in world currency, while replacing the British sterling pound but designating the U.S. a special position compared to the rest of the world. Henceforth, U.S. dollar makes up 70 percent of global currency reserves, accounting for 68 percent of international trade settlements, 80 percent of foreign exchange transactions, and 90 percent of international banking transactions. Owing to this financial dominance, the U.S. dollar becomes the internationally recognized reserve currency and trade settlement currency. On one aspect, not only the United States is able to exchange it for real commodities, resources, and labour, and thus to cover its long-term trade deficit and fiscal deficit, but can also make cross-border investments, mergers and acquisitions of enterprises using U.S. dollars.

In a sense, the U.S. dollar hegemony provides one good example of the predatory nature of neoimperialism. The United States can also obtain international seigniorage by exporting U.S. dollars. She can reduce its foreign debt by depreciating the U.S. dollar or assets that are priced in U.S. dollars. The hegemony of the U.S. dollar has also caused the transfer of wealth from debtor countries to creditor countries. This would, in fact, mean that poor countries would subsidize the rich, which is completely and utterly unfair.

The other related financial instrument is the Intellectual Property Rights (IPR) which is a monopoly property. Intellectual property includes product design, brand names, and symbols and images used in marketing. These are protected by rules and laws covering patents, copyrights, and trademarks. Figures from the UN Conference on Trade and Development show that royalties and licensing fees paid to multinational corporations increased from $31 billion in 1990 to $333 billion in 2017, (United Nations Conference on Trade and Development, World Investment Report 2018).

According to figures from Science and Engineering Indicators 2018 Digest, released by the National Science Council of America in January 2018, the total global cross-border licensing income from intellectual property in 2016 was $272 billion. The United States was the largest exporter of intellectual property, with such source income at 45 percent of the global total.

With the TRIPs/WTO (Agreement on Trade-Related Aspects of Intellectual Property Rights) as an international legal agreement between all the member nations of the World Trade Organization), the intellectual property regime has only strengthened, henceforth, (Cédric Durand, William Milberg, Intellectual Monopoly in Global Varlue Chains, 2018).

5] NEW MONOPOLY OF INTERNATIONAL OLIGARCHIC ALLIANCE

The fourth point is that with permeability of neoliberal thinkings prod a string of international monopoly alliance of oligarchic capitalism, featuring thereby a hegemonic ruler and several other great powers. This introduction is to provide the economic foundation for the money politics, vulgar culture, and military threats that exploit and oppress on the basis of the monopoly, as articulated by Cheng Enfu and Lu Baolin in Monthly Review May 2021, ibid).

Examples of international monopoly economic alliance as dominated by the United States are the 1975-formed G6 group with the United States, United Kingdom, Germany, France, Japan, and Italy, and became G7 when Canada joined the following year. G7 and its monopoly organizations are the coordination platforms, while the International Monetary Fund (IMF), the World Bank, and the World Trade Organization are the functional bodies of the new Bretton Woods global order of economic governance international capitalist monopoly alliance manipulated by the United States to serve its strategic economic and political interests, (Youzhi and Zha Junhong, “The Evolution and Influence of the G7 Group after the Cold War” [in Chinese], Chinese Journal of European Studies 6, 2002).

Other hegemony entities shall comprise the North Atlantic Treaty Organisation (NATO) and regional collections like ANZUS — the Australia, New Zealand and U.S. Security Treaty, Moroccan-American Treaty of Friendship, The US-Israel Strategic Partnership, The U.S.–Afghanistan Strategic Partnership Agreement, the QUAD in an India-Pacific coalition, PRISM and the Five-Eye program as part of multilateral UKUSA Agreement – a treaty for joint cooperation in signals intelligence.

6] ECONOMIC ESSENCE AND TREND

The final characteristic of neoliberalism is the globalized contradictions of capitalism and its various crises of the system creating contemporary capitalism as late imperialism (Patnaik 2016), where U.S. political scientist like Joseph Nye had articulated that soft power may be applied to accomplish one’s desires through attraction rather than force or purchase.

It is often presented that the soft power of a country is constituted mainly of three resources, namely, culture (which functions where it is attractive to the local population), political values (which function when they can actually be practiced both at home and abroad), and foreign policy (which functions when it is regarded as conforming to legality and as enhancing moral prestige), see Wang Yan, “Review of Research on the Index System of Cultural Soft Power” [in Chinese], Research on Marxist Culture 1 (2019).

The United States subjugates the cultural markets and information spaces of other countries, especially developing countries, by exporting to them U.S. values and Hollywood lifestyles, with the goal of making its culture the “mainstream culture” of the world, (see Hao Shucui, Research on Marxist Culture 1, 2018) from Ford Foundation, Rockefeller Foundation, Mont Pelerin Society, and Center for International Private Enterprise to promotion of “color revolutions” – through Albert Einstein Institute (AEI), National Endowment for Democracy (NED), International Republican Institute (IRI), National Democratic Institute (NDI) – by controlling the field of international public opinion via the promotion of neoliberal values by funding seminars and academic organizations, and through broadcasts by Voice of America and CNN or publications in Bloomberg, USAToday, New York Times, and increasingly since 2009, the US Agency for Inter-national Development (USAID)’s Interagency Counterinsurgency Initiative became official doctrine in the US. Now, USAID is the principal entity that promotes the economic and strategic interests of the US across the globe as part of its counterinsurgency operations.

7] IMPACT UPON MALAYSIA

The spectre of neoliberalism and neocolonial economic development surfaced after independence.

The British assisted in scripting an economic policy known as the Draft Development Plan that would became the Malaya Plans (1955-60); also implemented was the Second Malaya Plan 1961-65.

There seems to be a greater deference to foreign economic advisers who not only represent the neoliberal interests of international economic agencies but also enhancing the foreign business interests that successed in penetrating wholesomely the national economy.

a) Then, the subsequent three Malaysia Plans that followed were said to be crafty masterminded by foreigners from the United States of America. In fact, the earliest Malaysia Plan was drafted with the advice of Warren Hansbuger from USA; the second plan was completed by Prof. V.M. Bernett, Dr. D. Snodgrass and Prof. H.J. Bruton, all from the USA; though Snodgrass had pointedly admitted that these programmes were to gain “support from the rural Malays, if not indeed for the leadership of UMNO itself” rather than as a wholesome beneficiary to the rakyat-rakyat. The third plan had the advice of Prof. B. Higgins, also from the USA. The Development Advisory Service of Harvard (DASH) was heavily involved with the Prime Minister Economic Planning Unit (EPU) in drafting and promotion of this suite of development programmes.

Later in 2010, the government think-tank – Performance Management on Delivery Units (Pemandu) – even had allocated RM66 on “external consultants”, including American consultancy firm McKinsey and Co, which took the lion’s share of an estimated RM36 million; other foreign consultants included the Hay Group (which was paid RM11 million), Ethos & Co (RM1.5 million) and Alpha Platform (M) Sdn Bhd (RM1.5 million); an undisclosed “external consultant” named “Tarmidzi” had also received RM3 million for work done in setting up Pemandu as part of a neoliberalism economic development collaboration.

During 1997 currency crisis, and the eventual financial meltdown in 1998, the Malaysian government initial response was to rely on the International Monetary Fund consultancy response requiring expenditure reduction policies, that is, tighter fiscal and monetary control, which most unfortunately exacerbated the recessionary situation within the country concurrent with sharp portfolio capital outflow (see Athukorala 2000, “Capital Accounts Regime, Crisis, and Adjustments in Malaysia”, Asian Development Review 18, No:1 ,pp:17-48 and Bird & Rajan 2000, besides Kaplan and Rodrik 2001, “Did the Malaysian Capital Controls Work?”, NBER Working Paper No:8142).

b) TNCs deployment abroad is a manifestation towards capitalism late imperialism notation of labour arbitrage. On one side, the political economies of newly independent countries encourage foreign investment from Global North monopoly-capital. On the other perspective, 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 have since moved to nations where labour and the cost of doing business is with low-pay and operational costs are inexpensive, respectively. This approach, together with labour value commodity chains, contributes to the enlarged capital accumulation by the transnational corporations, deepening the extracting surplus value from the labouring class.

However the uneven labour employment was to 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).

c) Thirdly, without promulgated regulations, financial monopoly capital is very likely to work against the vision and goals set by country for her industrialisation initiatives. The insurgent of capital financialization in the late 1990s had already created an increased circulation of paper instruments and their associated debts :

*Government issuance of new debit papers: floated upward in the AFC1997, then another sitcom burst splurge 2001, followed by the GFC2018 spike* with “*helicopters’ monies” circulating in the market since AFC1997*; *see* **STORM 2020**

d) Forty-five years after the New Economic Policy (NEP) implementation, by 2002, Malaysia’s inequality remains 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 than those of China :

where it is deduced that the **top 1% of Bumiputera is way above the national income, and other communities incomes,** (as extracted from a decomposition of growth rate of real income per adult, 2002 to 2014 (pre-tax national income) : **Khalid** 2019

e) The unpleasantness on why many Malays had not attained parity despite +60 years of neo-liberal-enforced economic development is the emergence 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 our local businesses.

f) the emergence and ascendancy of ethnocapital clientel capitalism had witnessed the consolidation of ethnocratic clientel capitalism postcolonial affinity in the country as well as the constructed concentration of economic power in the banking, pharmaceutical and infrastructural platform sectors – all coexisting with neoliberalism economic developmental policies that aligned with late imperialism monopoly-capital and financial monopoly-capitalism.

g) benefits from “economic development” and growth did not trickle down to everyone, and that only the well-connected capital cronies who, through rentier capitalism and clientele corruption, had enjoyed the immense wealth of development. Everyone had seen a marked rise in absolute inequality through the years:

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.

h) That what is widely referred to as neoliberal globalization in the twenty-first century is in fact a historical product of the shift to global monopoly-finance capital.

The politico-economic stage the country is presently stationed confirms Amin’s imperialism of generalized-monopoly capitalism and Emmanuel’s unequal exchange under Neo-Imperialism.

Jason Hickel, Dylan Sullivan and Huzaifa Zoomkawala contended in the New Political Economy – published online: 30 Mar 2021 – that wealth drain from the Global South remains a significant feature of the world economy in the post-colonial era; rich countries continue to rely on imperial forms of appropriation to sustain their high levels of income and consumption. The Global North appropriated from the Global South commodities worth US$2.2 trillion in Northern prices that are enough to end extreme poverty 15 times over; and we are unfortunately one of the politico-economic victims in this neoliberalism niche.

8] CONCLUSI0N

The character of neoimperialism is that it is a monopolistic financial capitalism established on the business model of giant and expansive transborder multinationals. The production monopoly and financial monopoly of the transnational corporations have higher stage of production and capital concentration, whereby “nearly every industry is concentrated into fewer and fewer hands.” (see John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna, “Monopoly and Competition in Twenty-First Century Capitalism,” Monthly Review 62, no. 11, 2011 :1).

International monopolistic financial capital not only controls the world’s major industries, but also monopolizes almost all sources of raw materials, scientific and technological talent, and skilled physical labour in all fields, controlling the transportation hubs and infrastructural platforms by various modes and means of production. It owns, controls and dominates capital, global financial functions and associated derivatives and information technologies through vast culutural and military shareholding systems, (Li Shenming, “Finance, Technology, Culture, and Military Hegemony Are New Features of Today’s Capital Empire” [in Chinese], Hongqi Wengao 20, 2012).

October 1984, Deng Xiaoping stated: “There are two major problems in the world that are very prominent. One is the issue of peace and the other is the North-South issue. Deng emphasized that “peace and development” were the two major questions to be resolved, (Li Shenming, “An Analysis of the Age and Its Theme” [in Chinese], Hongqi Wengao 22, 2015), not perpetuating endless wars and destructive extractions upon Mother Earth.

EPILOGUE

Progressive nations working together to build a shared socialist community for the better future for humankind.

THE MALAYSIAN MANUSCRIPTS

LYNAS LIES GUBBISH IN GEBENG: AN ECOLOGICAL ECONOMCS IN EXPLOITATION

PROLOGUE

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 ECOLOGICAL DIMENSIONS

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.

**Mamut Mine**, Sabah – the **Lohan** tailing pond

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.

In Anti-Duhring, Engels had written that

“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 immediately to 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 Perspect 2006; 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, see APPENDIX

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 only later 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 developed after 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 conclusion, since implementation of the enthnocratically-administrative National Economic Policy in 1970, (Navaratnam 2020, Zainuddin 2019, Jomo 2005,) succeeding oligarchy regimes had continued maintaining a clientel ethnocapitalism domain over the working class rakyat2 with 1% of the bumiputera population of about 20,000 ethnocapital families running and looting – and ruining – the national economy in alliance with Global North monopoly-capital.

EPILOGUE

In truth, changes to strategic initiatives are transformational wherein monopoly-capital value-chaining Global South to the Earth with Rare excellence.

APPENDIX

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;

(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.

More MALAYSIAN MANUSCRIPTS

CAPITALISM

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, see STORM: 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.

_____________________

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

TRANSNATIONAL CORPORATIONS LABOUR EXPLOITATION

1] INTRODUCTION

The proliferation of corporations setting up assembly plants across borders in different nations, especially the developing countries – the Global South – enables world production to be increasingly dominated by a relatively few transnational corporations exercising tremendous monopoly power. The tendency towards the international concentration of capital clearly reflects on Lenin’s contestion (Imperialism, the Highest Stage of Capitalism, New York: International Publishers, 1939) which points imperialism is the monopoly stage of capitalism where markets became contest for global and regional hegemony.

To broaden capital intrusion there is “competition” between firms to seek low labour cost (economic term: labour arbitrage) and low-cost production processes (operations management from lean to just-in-time and flexible production), competition for resources and markets (strategic management term: competitive advantages) and marketing principles on product differentiation (varied products with many features and multi-functionalities at various price structures in different marketspheres).

By 2008, those top one hundred global corporations which had shifted their production foreign affiliates or subsidiaries accounted for 60 percent of their total assets and employment and more than 60 percent of their total sales. The foreign direct investment (FDI) to developing economies was US$694 billion in 2018 making up 58% global FDI share. By engaging in contractual relationships with partner firms without equity involvement, mostly in the Global South, TNCs were generating about US$2 trillion in sales in 2010 (UNCTAD, World Investment Report: Non-Equity Modes of International Production and Development (Geneva: United Nations, 2011), 131).

Between 1980 and 2013, benefiting from the expansion of markets and the decline in production factor costs, the profits of the world’s largest 28,000 companies increased from $2 trillion to $7.2 trillion, representing an increase from 7.6 percent to approximately 10 percent of gross world product.⁶

TNCs deployment abroad is a manifestation towards labour arbitrage. On one side, the political economies of newly independent countries encourage foreign investment from Global North monopoly-capital. On the other perspective, 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 have since moved to nations where labour and the cost of doing business is with low-pay and operational costs are inexpensive, respectively. This approach together with labour value commodity chains contribute to the enlarged capital accumulation by the transnational corporations, deepening the extracting surplus value from the labouring class:

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

Under capitalism, the capitalists are dominant at each level of society, the working proletarians are dominated at each and every sector of labouring activities. Where class existing at each economic, political, and ideological (or cultural) level, the understanding of class relationship is to identify where the controlling power ensues. As an instance, the stronghold in the Free Trade Zone (FTZ) or the Export Free Trade Zone (EFTZ) is that of monopoly-capitalism [place] that has aligned with the political elites and compradore capital of a developing country [positions] and by ownership and control of assembly workers [power] is able to extract the surplus value through their labouring tasks.

2] INDUSTRIALISED WORKERS

Often propogated in the 1970s is the presentation that foreign direct investment (FDI) would generate mass employment among the teeming reserve army of labour in the Global South.

This wasn’t the case.

For example, the uneven labour employment 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 that there was the often ‘stalling’ – temporarily or complete closure – of the many Malaysian industrial projects that weakened workers employment, (Jeffrey Henderson et. al., Capitalism and Industrialization in Malaysia in Economy and Society, Volume 36, 2007 – Issue 1).

Another often argument is that the textiles, electronics and ship-building industries are labour-intensive also does not necessary bear the fact, as a survey of the 1968 Manufacturing Industries Census revealed that the electrical appliances ranked 22nd, the textile 36th and ship-building 44th in a group totaling of 112 industries in terms of capital-intensity by sector, (W. Donald McTaggart, Industrialisation in West Malaysia, 1968, Center for Asian Studies, Arizona State University, January 1972, Table 4, p.32), and where instead of production, the surplus value is highest at the R&D design and development phases and in the marketing and post-sales support stages:

This **economic neo-imperialism** is relevant in today’s world economy, characterized by a new international division of labor linked to global commodity chains or global value chains, whether it is for the production of physical goods or the generation of, and by, “soft” intellectual elements.

Even in the much endowed electronic industry, implanted behind free-trade zones employing female workers at US 40 cents per hour, but created only 12,000 new jobs in 1973. Indeed, the labour intake in these run-away factories is reaching its maximum input for productive efficiency compared to other Southeast Asian countries.

On electronic assembly plant, Indonesia leads in cheap off-shore production; labour cost for a 1000-person plant is estimated at US$ 505,000 (assuming a semi-skilled is paid US$25 per month), Thailand at US$561,000 (labour cost US$42/month), and Hong Kong, the most expensive – US$1,815,000 (labour cost US$118 per month), (as referenced in Electronic International, April 4th. 1974, p.66). On electronic manufacturing, the profit margin for a firm like Apple – which has major outsourced units in Malaysia like Murata Manufacturing Co., Renesas Electronics Corp. and Ibiden Co., that make chips and circuit boards for the corporation -its surplus value on a particular product line is exemplified by it’s high profit margins versus its labour costs :

Apple’s high profit margins in USA
versus its labour costs in China

A former executive had described how the Apple company depended upon a Chinese factory to revamp the iPhone manufacturing just weeks before the device was due to be marketed. Apple had redesigned the iPhone’s screen at the last minute thereby enforcing an assembly line overhaul. New screens began arriving at the plant close to midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day (monthlyreview online February 08, 2021; STORM 2021).

Thus Apple, through its subcontractor Foxconn, switched assembly of its products to India after there was a mere 9-12% rise in labour costs in China and Indonesia. Companies like Apple are actually not real manufacturers, but merely merchandisers, yet they are able to absorb a great share of the surplus value created by subordinated manufacturers.

However, by late 1990s, manufacturing as a whole has began to register a slower wage growth, with labour markets characterized by heavy presence of low-skilled foreign workers, increased contract labour and/or outsourcing and the subsequent declining worker organization. The focus on sweat-based low-skilled foreign labour rather than on expanding professional and skilled labour locally has driven Malaysia down the low industrialization road as a result, (Rajah Rasiah,Vicki Crinis & Hwok-Aun Lee in Industrialization and Labour in Malaysia).

In fact, a number of Malaysian manufacturers have even relocated their research facilities and/or manufacturing plants to Cambodia and Vietnam to access more developed and expanding markets according to Rasiah, whereas the poverty of Malaysian industrial workers has persisted, and the precarious labour has continued, exacerbated by the dependency on migrant labour that had inadveribly reduced national labour surplus value tremendously. The concurrent continual enforcement of colonial industrial legislations had suppressed any broad or whatever marginal salary gained in the 1980s.

i) Regardless, TNCs exploitation of labour crosses borders to different parts of the world, and in Southeast Asia the surplus value expropriation is existentially heightened.

Indonesia, for instance, in the 1990s, where Nike manufactured seventy million pairs of shoes in 1996 alone, young girls were being paid as little as fifteen cents an hour for an eleven-hour day. Indonesian workers as a whole made an average of around $2.00 per day then, well below a living wage.

Another example, the Vietnam’s labour cost for a pair of US$149.50 basketball shoes was $1.50 – 1 percent of the final retail price in the United States.

Women workers employed in El Salvador by Singapore-based subcontractor Ocean Sky in 2010 sewn National Football League (NFL) T-shirts, commissioned by Reebok, were “paid just eight cents for every US$25 NFL T-shirt” they produced, that is, wage amounted to three-tenths of one percent of the NFL’s retail price, (Mujeres Transformando and Institute for Global Labour and Human Rights, The National Labor Committee, January 24, 2011); see also Bernard D’Mello, “Reebok and the Global Sweatshop” Monthly Review 54, no. 9 (February 2003): 26-40).

Control mechanisms through legislations – like gazetted laws on union busting are instituted, often to allow global capital to maintain a low unit labor cost by making sure that productivity can be increased.

In May 2014, one of Apple’s most important suppliers, NXP Semiconductors, dismissed all 24 elected union officials from IndustriALL affiliate MWAP at its plant in a special economic zone in Cabuyao, Philippines. NXP claimed the union’s peaceful industrial actions were illegal. It was clear that the company’s persistent acts of intimidation and harassment were aimed at weakening the bargaining power of the union.

Similarly, in Malaysia, there were industrial conflict cases encountered with AMD and Harris Semiconductor, (see Mhinder Bhopal, US Union Busting in Contemporary Malaysia: 1970-2000, University of North London). A recent change to the Labour Amendments law fragmentises the labour movement wider by creating multiple unions at workplaces and pitting them against one another in furtherance of consolidating the ruling class as part of a state-sponsored union busting in league with TNC monopoly capitalism expropriative gains in the country, (STORM, Zero Hour Underemployment – Surplus Value Exploitation).

The state-TNC-neo Imperialism collusion in union busting is clearly seen in November 1989, shortly after a meeting between Prime Minister Mahathir and Henry Kissinger (who was then an inward investment advisor to the Indonesian Government) and Jack Welsh of General Electric, premier Mahathir asserted, and agreed, that only in-house unions would be allowed since any “industry wide union, national or state based, will hamper efforts to develop the electronics industry further”, (Business Times 28/11/89 cited by Bhopal, ibid.).

ii) In the late 1970s, it was estimated that about 80,000 kampung (village) girls between the ages of 16 years and 24 years working in these electronics factories; there was an emerging rural bumiputera workers withn a subculture of growing proletarianized Malay workforce articulating class and non-class in confrontation with capitalism in The Malay Labourer as portraited by Suriani Suratman, 2002.

To compound the youth labour force precariousness, a Malaysian Census Report had estimated there were 40,000 child workers in 1990; past estimates had ranged from 70,000 to 200,000 (Charles Hirschman, “Ownership and Control in the Manufacturing Sector in West Malaysia”, UMBC Economic Review, United Malayan Banking Corporation, Kuala Lumpur, Vol.7 No.1, 1971, p.26).

There were 75,000 economically active children between the ages of 10-14, representing 3.16% of this age group; of these, 33,000 were girls and 42,000 were boys, during the industrialization period, (Mark Lindberg, a private communication to the AREAS Research Committee, London, 1970s; see also V. Kanapathy, “Foreign Investment in Malaysia”, in Multinational Corporations and their implications for Southeast Asia, ed. By Lim Poh Tin, Current Issues Seminar Series No.1, Institute of South East Asian Studies, Singapore, February 1973, pp.3-12).

iii) However, the urban proletariat is silenced in its demands for higher wages and better working conditions by repressive legislations, for instant, the Industrial Relations Act, 1967, forbids go-slow or wide-cat strike. Unjust measures like close supervision/surveillance and fragmentation of trade union organizations are used to perpetuate a neo-colonial law and order status, and consequently, the small membership size, splintered nature and different forms in registrations are the deliberate actions by the ruling regime to negate the formation of nation-wide, multi-racial, class-oriented trade unions. The present characteristic of Malaysian trade union is labeled “kachang puteh” (white peanuts), not only for its colonial connotation but also the size of organizational structure, (STORM, 2016, Precarious Labour in Industrialisation Capitalism.

According to the Trade Union Affairs Department, only 875,193, or six percent, of the 14.5 million workers in the country, are currently union members. Union membership in the private sector also shows a marked decrease, dropping from 433,702 in 2009 to 359,206 in 2017.

Another indirect employment is through undocumented exploited labour who are usually found in garment sweatshops operating in and around the federal capital of Kuala Lumpur, around the Pudu and Loke Yew communities (read the interviews with the Secretary, Selangor Textile Trade Union Crisis in Malaysia:Women, Labor Activism and Unions, University of Wollonggong, 2008; see also N. Yamada, “Migrant Workers as a Peripherality – Advocacy and organizaing Activities in Malaysia”, ILERA 2015 World Congress in Cape Town, South Africa, and Audrey Seah and Grace Lee, “Female Labour Force Participation, Infant Mortality and Fertility in Malaysia”, Journal of Asia Pacific Economy, Vol: 20, issue 4, 2015; Theedgemarkets, Plight of Migrant Workers).

3] THE GIG-WORKERS

The gig economy has disrupted the conventional businesses on a global scale and opened up new avenues to for TNC to widen scope of scorching labour.

Workers in the Gig-economy are alienated underemployed often as the reserve army of labour looking for unaffordable housing in dialectical urbanism or as unsettled owners of the FVG FELDA schemes. As job becomes divorced from physical presence at the work post, increasingly, in an urbanised environment, gig-workers need to have a Wi-Fi connection or subscribe to a broadband provider thus increasing his/her daily expenses.

Workers under capitalism are compelled by their lack of ownership of the means of production to sell their labour power to capitalists for less than the full value of the goods they produce. Capitalists, in turn, need not produce anything themselves but are able to live instead off the productive energies of each and every worker effort.

In Malaysia, the gig economy has grown by 31% in 2017 based on Employees’ Provident Fund’s (EPF) figures. This has surpassed the conventional workforce. Aside from that, the World Bank also shared that about 26% of the Malaysian workforce are freelancers and the number is growing. The Asean Post reported that some people assume freelancers work for free. Also, a study by PayPal in 2018 revealed that 58% of freelancers in four Southeast Asia markets (Singapore, Philippines, Indonesia, and Vietnam) have experienced not being paid because they are not being taken seriously by clients.

The gig labour works with inherent contradictions, without stringent legislative overlording support but wedged into different classes whether they are recruited cleaners, child-carers, DIY carpenters or deliver food in an e-economy that is bypassing legacy businesses. Thus, we can have GRAB being registered in Singapore, but operates as a car-hailing and food-delivery entity in selective Southeast Asia terrains, but providing limited freelancing workers’ social security.

Gig Economy Malaysia: Empowerment or Exploitation? — Basing on a TNC’s 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!

4] INFRASTRUCTURAL PLATFORM SERFS

By expanding the concept of international division of labour in the production of information and information technology today, we can express that digital labour, as the newest frontier of capitalist innovation and exploitation, is central to the structures of contemporary imperialism, and that is:

• the information industries are one of the most concentrated economic sectors;
• those hyper-industrialization, finance and information-based corporations like Amazon, Bloomberg and CNN belong together;
• multinational information-based corporations are located in nation-states like in Mumbai, India and Cyberjaya, Malaysia, but operate globally;

The introduction of infrastructural platforms has indeed expand and likely prolong the unemployment problems in the country because present education system (see Malaysian Education Policies) has not engender nor energise an IT ecosystem to support such high-technology system where the main gainers are the digital lords and a digital knight like TM gaining as a PLC-clientelship in collusion with a TNC monopoly capital infrastructural platform like Microsoft in the national Jendela digital economy project.

However, even if there are uptakes of a digital economic growth, the salary range for people working in Malaysia is typically only from RM$1,725 (minimum salary) to RM$5,638 (highest average) where the cost-of-living in the Federal capital for a single person monthly can be RM$2,106 without rent. It is this type of working situation where a youthful worker is just managing to stay afloat and be alive. Just to be reminded that the 50 richest Malaysians own a total wealth of US$80 billion; at one time, the nine richest men in Malaysia have a net worth of US$42 billion (Forbes 2016). According to Credit Suisse Group AG’s 2019 Global Wealth Report, 0.2% or 43,646 adult Malaysians were categorised in the over US$1 million (RM4.18 million) wealth bracket where the inequality is acute:

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.

5] LABOUR EXPLOITATION

In a way, the 21st. millennium has witnessed a big increase on the relocation of industry in the Global South – factory-produced and information-serviced – with the transferring of value to the Global North.

Early 1970s with rising oil prices brought about an economic situation of inflation and stagnation. To escape from the “stagflation” quagmire, monopoly capital transferred production industries overseas to maintain competitive edge over rivals. Monopoly-capital further accelerated its decoupling from their legacy industries and sought to open up new financial territory. Capitalist globalization and financialization synthesized in supporting each aspect, accelerating the “virtualization” of monopoly capital and the hollowing out of the real economy.

Comparing the data for the world’s 2,000 largest multinational corporations – in the years 2004 and 2014 – generated revenues accounted for more than 50% of worldwide Gross Domestic Product. Prominently, the share of FIRE (finance, insurance, real estate) in total assets was about 74% in 2014, contributing 33.5% in total profits. However, if one is to combine FIRE profits with those shares in the information communication industries and the telephony mobility industries – which have elements of financialization and digitized capitalism contents – then we have 70% which is absolutely higher than the 18.6% share of total profits in the manufacturing sector; (see Costas Lapavitsas, The Era of Financialization, Part 3, TripleCrisis).

And that information technology as emphasised by Fuchs – from cloud computing to artificial intelligence – could possibly become a means of starting geopolitical conflicts. Indeed, the role of transnational corporations could not be separated from the role of U.S. military bases spread across the planet or the need to control oil and other strategic resources, (Christian Fuchs, “New Imperialism: Information and Media Imperialism?” Global Media and Communication 6, no. 1 (2010): 33–60 and Christian Fuchs, “Digital Labor and Imperialism”, Monthly Review, Vol:67, Issue 08, January 2016, Table 1).

We shall argue by stating that technological companies – while generating physical products and data-rich services – as edifice of digital capitalism, they also collect data about their consumers’ use of their products and services because machine learning performed on those data would likely promote the development of better products and enhanced services, beside probably linking end-users to partners’ products or facilities; this model is what technology expert Azeem Azhar calls the ‘AI lock in loop’. Integration of multiple data-rich digital assets into a single platform gives many technological companies access to the entire vertical product chain with a capacity to expand horizontally into new products and services with relative ease and effectiveness; case examples like Google, Facebook or Tencent with multi-business ventures :

Behind such dirt wages in the periphery lies the whole history of imperialism and the fact that in 2011 the global reserve army of labor (adding up the unemployed, vulnerably employed, and economically inactive population) numbered some 2.4 billion people, compared to a global active labor army of only 1.4 billion. It is this global reserve army – predominantly in the Global South, but also growing in the Global North – which holds down the labour income in both center and periphery, keeping wages in the periphery well below the average value of labour power worldwide, as articulated well by John Bellamy Foster, Robert W. McChesney and R. Jamil Jonna in The Global Reserve Army of Labor and the New Imperialism, Monthly Review, November 01, 2011.

It is projected that by 2030, 60% of the world’s population is to be urban; an additional 590,000 square miles of the planet will be urbanised occupying a land surface more than twice the size of Texas, swelling an additional 1.47 billion urban dwellers; many of whom will bolster the ranks of a latent reserve army. They will thus, offer sustained nourishment for expanded capitalism accumulation anywhere and everywhere on planet earth.

Monopoly capital enforces these differences in labour costs through a variety of mechanisms, from their monopoly control either through technology (for example: infrastructural platform) or to their ability to use competition (by adopting Porter’s competitive advantages and/or levying hypercompetition or even adapting Noorda’s co-opetition approaches) to enforce ‘flexibility’ in manufacturing process (for instance on adopting and applying lean or just-in-time kanban production).

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

In fact, whenever there are violations of worker or trade union rights, many Malaysian unions still do not choose to struggle through pickets, strikes or campaigns against employers. Instead, oftentimes, industrial workers would prefer to lodge complaints with relevant government institutions, which leads to court actions, and possibly the appeal process, which can last for many years.

Even when workers and unions do win, the remedies are weak, having no real impact on employers nor instrumental in bringing about legislative changes. Employers are very happy with the state of affairs, for this method of industrial dispute resolution does not really impact its business and profits.

EPILOGUE

In the transnational corporations model of late imperialism, returns do not diminish as businesses cross borders and scale. Ratther, capital accumulation increases exponentially. Exploited workers as victims of late economic imperialism are disproportionately rising – significantly and substantially.

POLITICAL ECONOMY OF MALAYSIA brief survey on the development of underdevelopment, economic stagnation and socio-economic inequality under a Neo-Imperialism regime of monopoly-capital neoliberal policies towards financialization capital is available HERE

THE COVID19 COMMODITY SUPPLY CHANGE CHALLENGE

PROLOGUE

With multiple vaccines manufacturing in USA, Russia, China, India and Europe, there are now many options available for inoculating the global population. In fact, the producers of the seven US government-supported vaccine candidates have each announced the capacity to manufacture 1 billion to 3 billion doses by the end of 2021, totaling approximately 11 billion doses, of which 50% have already been contracted by various nations.

However, the widening landscape of production options is also increasing the complexity of the logistical process in distribution to different countries. Some manufacturers may need to receive regulatory approval from recipient countries before they can send ballets of vaccines abroad, and product wise, each vaccine has to show acceptable levels of efficacy and effectiveness, and the demanded standards will thus impact upon its own manufacturing and logistical requirements, with different implications upon respective clients.

The relationship between targetted country and vaccination recipients shall also depend on local clientelism and labour arbitrages in an monopoly-capital global supply chain environment.

1] INTRODUCTION

Pharmaniaga is given sole distribution rights on the Pfizer’s vaccine in Malaysia (Boustead Holdings owns 55.93% of Pharmaniaga, while Lembaga Tabung Angkatam (LTAT) owns 11.12%, and through a reverse ownership, the major owner of Boustead Holdings is LTAT).

Pharmaniaga also recently announced that its wholly-owned subsidiary Pharmaniaga LifeScience Sdn. Bhd. (PLS) had entered into a term sheet agreement with the Ministry of Health (MoH) for the purchase and distribution of 12 million doses of vaccine developed by Sinovac Life Sciences Co Ltd (Sinovac LS), a subsidiary of Sinovac Bi-otech Ltd., (theedge, 27/01/2021). The agreement will enable PLS to supply 12 million doses of finished Covid-19 CoronaVac, SARS-CoV-2 Vaccine (Vero Cell), Inactivated (developed by Sinovac LS), and filled and finished by PLS to be delivered to hospitals, clinics and any other facilities nationwide as instructed by MoH.

Duopharma, on the other hand, will be supplying 6.4 million doses of the Russian-developed “Sputnik V” Covid-19 vaccine.

There are other vaccine distributors such as Yong Tai Bhd, Bintai Kinden Corp Bhd and INIX Technologies Holdings Bhd.

Yong Tai had said that it had inked agreement with Shenzhen Kangtai Biological Products Co Ltd for the development and exclusive commercialisation of the latter’s inactivated Covid-19 vaccine in Malaysia. Under the deal, Yong Tai will supply 100 million doses of the vaccine over a five-year period.

Also, Bioalpha Holdings Bhd is the latest to jump on the bandwagon when it entered into a two-year procurement and distribution agreement with Shanghai Bukun Trading Co Ltd for the procurement and distribution of vaccines in Malaysia, including the Covid-19 vaccine developed by Sinovac Biotech.

Bintai Kinden, a mechanical and electrical engineering services company, has also said it is partnering US-based Generex Biotechnology Corp and its subsidiary NuGenerex Immuno-Oncology Inc to distribute and sell their Covid-19 vaccine in Southeast Asia.

Any supply of Covid-19 vaccine will be subject to the approval of NPRA, the National Pharmaceutical Regulatory Agency, Ministry of Health Malaysia and the Malaysia Drug Control Authority.

Special Vaccine Supply Access Guarantee Committee co-chairperson Khairy Jamaluddin assured that Malaysia will not go through with its Covid-19 vaccine procurement deals if the vaccine in question does not meet standards.

He reiterated that the agreements are subject to approval by the National Pharmaceutical Regulatory Agency, which would assess the vaccine candidates for its safety and efficacy.

2] THE VACCINE SUPPLY CHAINS

As these new vaccines gained approval, the global vaccine supply chains’ complexity and public concerns increase. The vaccination process involving millions of people is an arduous process, and questions arising as to what approach(es) private companies, government institutions, government-link companies shall be adopting in distributing their supplies of vaccines have become a public concern.

Are logistics companies ready? Is there enough air freight and cold-chain capacity? Will distribution be a major factor in vaccine costs?

*adopted from* **Boston Consultancy Group** 2021

Though there are complex issues surrounding the vaccine supply chain processes – from air freight capacity and the dry ice supply to cold chain resources and the cost of vaccine distribution – the findings from the Boston Consultancy Group were surprisingly reassuring. The overall costs of the vaccine will be relatively low vis-à-vis the toll of the virus on the global economy, and the supply chain costs will represent just a fraction of the total cost (distribution cost estimated for USA is US$ 0.07 per dose, including intermediate, short-term storage covering air freight, road transportation, warehousing including dry ice packing) . However, whether this would be the business reality in the country is debatable given that the politico-economy environment is strapped within a rentier capitalism edifice that is locked to the Global North monopoly-capital global value chain.

Even if the air freight capacity is in place, whether the cold chain requirements can be easily be met by existing dry ice production for the Pfizer’s vaccines that need such equipment and related distribution process is one of many outstanding questions to probe.

Dry ice, made by condensing carbon dioxide, is usually generated from captured CO2 emissions of large industrial or energy plants. There could properly of some concern about potential bottlenecks in the supply chain due to an insufficient supply of dry ice at the production site or along the vaccine delivery route. One company, Kelington Group Bhd (KGB) has a dry ice plant with an ultra high purity (UHP) installation located in Shah Alam, “positioning them well to benefit from this demand surge,” Kenanga research analyst Samuel Tan wrote. Currently, KGB’s outstanding order book has piled up to a record high of RM386 million versus RM258 million at end of FY19; KGB posted a net profit of RM24. 4 million in 2019, (nst.com 10 November 2020).

Storage related to the cold chain requirements is what type of new container solutions would be in place or would have to be specially developed: by whom (private or GLC or a Perikatan Nasional clientelism), at what cost, and how much the surplus value expropriation is expectedly therein.

Freezer farms are emerging priorities considered by logistics companies which are investing in premium facilities and specially designed containers, such as those produced by va-Q-tec, to ensure an uninterrupted cold chain at the necessary levels, including -80°C, -20°C, and 2° to 8°C. Though some countries are talking about expanding their warehouse solutions and “freezer farms” to support distribution activities as well, nothing had been announced as to indicate that we had such type of “farms” or any intention of owning such a high-tech facility.

In addition, does the country has the key stakeholders along the vaccine supply chain possessing the experience to take on the issues and have formulated contingency plans. If so, how much the process will entail in terms of advisory “consultancy fees” and deployment of human resources. These are appropriate queries to ponder under a rentier capitalism economy since the 1965s’ Bumiputera Congress initiatives (see Khoo Siew Mun, DOCUMENTING PAPERS ON BUMIPUTRA PARTICIPATION IN THE MALAYSIAN ECONOMY, Journals Library Review, Volume 36 Issue 2 and archives here) and the Guthrie Dawn Raid had prompted a wave of economic nationalism towards multiple generations of National Economic Policy directions that had fused local corporate capital with the imperial monopoly-capital in the Global North.

There are, of course, solutions to take, for instance, Kuehne+Nagel is a good case-firm example, that offers door-to-door services focusing on 32 vaccine–capable airports around the world, each of which has the required carrier capabilities and capacity, infrastructure, staff expertise, service levels, and quality support and is located near known manufacturing locations and vaccine destinations. These services have include dry ice, container, and packaging availability and airside service (tarmac visibility) and has been overseen by a team focused solely on COVID-19 customers.

Prior to commercial product release, Kuehne+Nagel’s QuickSTAT team is also providing logistical services at each stage of launch, from pre-clinical to Phase III clinical trials. This type of service will be essential to ensuring a smooth transition from clinical trials to the distribution of commercial products at scale.

The logistics providers are there, but would the private sector and or GLCs tap upon these logistical provisions or would there be alternative resources that complicate the global supply chain processes which shall inevitably be borne by the rakyat2 whether it is through government institutions or privatised enterprises.

In terms of logistics, many architectural network configurations are feasible. For example, companies may use a hub-and-spoke model, with central stock keeping in specially equipped warehouses to ensure greater control, and distribution dictated by demand. Others may choose point-to-point delivery, with some cooling and freezing infrastructure in place at the vaccination centers, but with no intermediate storage.

Note that shipments within the US will benefit from the extensive coordination capabilities of the US military likely in combination with regional delivery services such as UPS, FedEx, and DHL. In Europe, individual governments will organize their respective delivery approaches. Whether our private or military logistics would have the capability, and the ensuing capacity, time will tell. The daunting task is that the Flying Doctor Service had since privatised – much to the inability of MoH to service the interior hinterlands of Sabah and Sarawak adequately – and whether the military has the sizeable deployment of aircrafts and skilled manpower, at a moment of stagnant economy under an unreliable backdoor ruling regime governance, is another uncertainty in the national capability to rise to the dark winter ahead, (see Bridget Welsh, 2021).

Though the costs of producing and delivering the vaccine are expected to be low compared to the enormous toll that the virus is taking on global economy with GDP losses being estimated to have reached $4.1 billion per day in Europe and $3.7 billion per day in the US as of October 7, 2020 – equaling 12% and 25% of total EU and US vaccine costs, respectively, there is so far no official cost-and-benefit has been announced: who are the beneficiaries under a rentier capitalism economy, and how much (and, even how long a wait to get vaccination) would the costs to be borned by the rakyat2 and held up by the national economy which is already in great debt, (the Federal government debt and liabilities were RM$1. 2569 trillion, or 87.3% of GDP, as at end-September 2020, see STORM) and the 2021 Budget allocation to the healthcare sector is inadequately deficient in new equipment procurement and operational expenditure to critical MoH medical units.

Malaysia expected to suffer GDP loss of RM$300 million a day if the Conditional Mandatory Condition Order is maintained.

Then, there are other concerns that have been raised around the final point of vaccine delivery to the individual, including whether to have centralized or decentralized distribution, what the training requirements will be, and how the delivery of vital materials such as vials and syringes will be coordinated. These concerns will be augmented or reduced in each region by factors such as existing infrastructure, development levels, rate of urbanization, and affluence. We have a sizeable populace leaving in classified rural and interior hinterlands: rural Malaysia is still home to 7.3 million people – they live in 26,400 villages across the country. About 3.1 million of them reside in 46 remote districts in the peninsula, Sabah and Sarawak. The interior dwellers are spread across a vast rural landscape covering 52 per cent of the country’s land mass.

The coverage of vaccination initiatives is of importance given the bureaucracy the country had endured through the years, and the ethnocratic oligarchy that is dominant in the national governance, more so now under an unelected backdoor government, ruling under a Declaration of Emergency regime.

Whether a country can establish a decentralized vaccination campaign that reaches even the most isolated individuals or must we to execute a centralized campaign will be determined by the supply chain requirements of the vaccine, paired with the local infrastructure. Pfizer’s vaccine, for example, may be limited to centralized distribution in urban centers due to its cold-chain requirements, while Moderna’s vaccine may be more suitable to broader and decentralized distribution. Other vaccine candidates from companies such as Johnson & Johnson, AstraZeneca, and Novavax, and China’s Sinovac, in turn, have less-sensitive cooling requirements and may be suitable for broader and more rural deployment.

The first batch of Covid-19 vaccines – from Pfizer and BioNtech – will arrive in late February 2021, and is enough to cover 12.5 million Malaysians (two doses each) or 39 percent of the population.

Whether the vaccination plan can proceed smoothly will depend on whether Malaysia can finalise deals with other vaccine makers, including UK’s AstraZeneca-Oxford and China’s Sinovac, although both have their challenges.

The Covid19 vaccination campaign in 2021 for Phase 1 would be:

March: Frontline personnel
May: Elderly and sick
August: Everyone else aged above 18

whereby this phase will involve 500,000 medical and non-medical frontline personnel. It will include medical staff working at all government and government-linked hospitals; selected private hospitals fighting Covid-19 may also be included.

In terms of training, vaccination center staff must begin to learn to administer each type of vaccine correctly, to monitor which person received which vaccine if the center gives out more than one type, and to track the vaccinations of individuals in order to schedule potential booster shots correctly. For the mRNA vaccines, staff must also be trained to follow the correct thawing, dilution, and visual inspection protocols for each shot.

In response, vaccination centers need to organize the training of vaccination workers in a timely manner, strictly following the recommendations set by the manufacturer and approving authorities. Vaccination workers, in turn, must understand and implement protocols that will enable companies to track the long-term effectiveness of the vaccines that were administrated.

The availability of medical resources like the vaccine, syringes, and even personal protective equipment (PPE) must also be synchronized; do we have sufficience availability? Do we have enough of a strategic stockpile? How efficient is the bureaucracy in the public sector to allocate and re-distribute to different states’ agencies? Can the private performs similar efficiency process without taking a height in pricing?

It should be noted that already in China, Chinese and needle companies quadruple prices for their manufactured products amid surging demand. They are sending clear warnings that their capacity is fully accounted for despite production expansions, with some orders waiting until August 2021, (Global Times, 28/01/2021).

Material procurement will be critical to a successful vaccination campaign. Yet experiences in previous pandemics in other countries, including Ebola, SARS, and MERS, had shown that logistics companies have the capabilities and the knowledg in place to address these challenges. The pointed question is whether, despite the seemingly unprecedented scale of the current pandemic, and its sporadic surges, can the nation rises to the occasion again?

In developed countries, manufacturers have already put in place contingency plans to stock extra materials, and glass manufacturers such as Corning and Schott have begun preparing the necessary supplies of vials and syringes, which must be coordinated with evolving vaccine production to ensure that they are available at the right time and place, but whether we – missing already Vision 2020 as the “developed” nation status – can again face the challenges ahead, (see also Jomo K. Sundaram, 2020 and 2021).

The state of Selangor, through its task force on Covid (STFC), has been conducting its own C19-infection testings, focusing on groups in high risk areas and migrant workers using the rapid testing Ag method (instead of MoH’s preferred PCR method) – to speed up identification of Covid19-clusters quicky so that remedial steps are taken to isolate them before the infections spread to others.

Phase 2 will involve people aged 60 and above. Those suffering morbidities often seen in Covid-19 deaths will also be included. These include illnesses such as cancer, obesity, diabetes, high blood pressure, respiratory diseases and heart diseases. The disabled community will also be included in this phase.

This phase will run from May to July and shall involve 6.5 million people.

Phase 3 starts in August 2021, and will run until the end of the year. It will involve another 16 million Malaysians aged 18 and above.

It is interesting to acknowledge that not everyone would be vaccinated, but that the nation shall aim for a herd immunity with the vaccination campaign. The government believes that with more than 70 percent of the population vaccinated, it would be able to attain a herd immunity status. This means that with a large number of people vaccinated, the virus will have much fewer hosts to infect, thereby minimising the risk of further spread.

Another exception is that when Phase 2 starts, it is a planned understanding that there will be an additional supply of vaccines from other brands.

If the order is behind schedule, there could be a delay in the immunisation plan although the Health Ministry could possibly be able to scrape through Phase 2 with the Pfizer-BioNTech vaccines.

However, Pfizer’s alone would not be enough for the Phase 3 vaccination campaign; it would be interesting to know by then how much of financial allocation – and leakages- has been expended by then.

3] CLIENTELISM AND RENTIER CAPITALISM

Throughout Malaysia’s political history, over time, bumi rakyat2 had came to expect – and rely on – patron-client relationships, nested within the UMNO political party machines, carefully reinforced by structured distributive and development policies (Meredith Weiss), see also her Payoffs, Parties, or Policies: “Money Politics” and Electoral Authoritarian Resilience in Critical Asian Studies, Volume 48, 2016 – Issue 1, and
Duelling networks: relational clientelism in electoral-authoritarian Malaysia, Democratization, Volume 27, 2020, Issue 1.

This clientelism was enabled at the grassroots level, allowing ruling elites – already with the abolishment of direct local elections – in the UMNO political party in particular, to develop a system whereby welfare policies acted as through they were party patronage, “effectively partisanizing them and ensuring ground-level officials with whom most voters interacted were Alliance (BN) loyalists” (Weiss, op. cit., p74). UMNO built mosques, schools, and health facilities, and other village development projects, to solidify its political base built on clientelism. This feature of Malaysian politics, promoted and fostered forcefully under BN and UMNO in particular, but to certain extent that even opposition parties replicate that repugnant behaviour, too (Weiss, ibid., p.76).

Shaped by patronage and cronyism under the cover of affirmative action prerogatives, an added dimension is that monarchs appear to have gladly taken on their new role as parliamentary king-makers as ‘an astonishing royal revival’ by exercising their constitutional prerogatives to appoint prime ministers.

It is widely acknowledged, primarily those members in the political party Bersatu who are earnestly and directly in competition with UMNO for the Malay votes, this practice – and voter mentality – of the role of political parties and governance could not easily be changed. It is part of the rent-seeking ethos beset by politics of personalism, patronage and arbitrary rule, surrounding the particular burden of privilege class in the community under rentier capitalism.

Rentier capitalism – as an upgrade and enhancement by UMNO divisional-level heads of clientelism or the Singapore’s Group Representation Constituencies to bureaucrat-capitalist oligarchy – 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 monopoly-capital imperialism: the resurgent power of unproductive assets through financialisation capitalism that spans finance, housing 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 had incorporated 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 brought failures across our national health care systems – and the frontliners’ working conditions – medical products and related service supply chains, thereby exposing depth of much inequity across the healthcare provisions.

4] MONOPOLY-CAPITAL CHAININGS

With capitalism, it gives birth to monopoly-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 of profit 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 of accumulation.

It is under such consequential circumstances that the full spectrum on healthcare services, medical practice and the pharmaceutical provisions is being on display. On one side, the Global North monopoly-capital is leading and dictating the introduction, manufacturing and distribution of the Covid19 vaccines, and on the other side, the Global South under the onslaught of labour arbitrage and commodity chains realignment has to submit to whatever is produced – getting through the Big Pharma the global value chaining disadvantages in terms of pricing of finished product, logistics unevenness and the uncertainty on scheduled vaccination provisions.

5] GLOBAL VALUE CHAIN AND SURPLUS VALUE

The advent of globalization (with cross-border trade in goods and services, technology, and flows of investment, people, information – and diseases), there emerge the spectre 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:

Monopoly-capital in seeking cheaper production sites 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 including medical equipment and supplies. This core feature of economic imperialism cascading through an intensed transformative quality of organization structure and dominance of monopoly capital in all linked local corporate entities, the rampage of peripheral countries’ natural resources is intense and extensive.

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, 101).

With this change to a monopoly-capital enterprise environment, we are receiving today the army of reserve labour from subcontinents of India and Indochina and the archipelago of Indonesia. These cohorts of migrant workers need to be vaccinated, too. It is also a formidable task on part of the country – amidst a stagnated, and sickening economy, with new challenges even before the recent State of Emergency promulgation, ruled by an unelected regime playing pandemic power politics – having to care for its rakyat2 as well as the wellbeing of five million foreign registered and floating workers.

On January 6th. 2021, the government has ordered employers to bear the cost of administering Covid-19 vaccines, as well as screenings, for their foreign labourers under Section 11 of the Prevention and Control of Infectious Diseases Act 1988 with the Science, Technology and Innovation Minister Khairy Jamaluddin highlighting the possibility of vaccinating foreign workers against Covid-19 for free, as he expressed a concern over migrant workets’ refusal to get immunised if it is not provided free.

The seriousness of the pandemic situation is that the Covid-19 outbreak in Selangor involves many migrant workers, including the largest cluster reported in Malaysia, the Teratai cluster, which originated from the Top Glove Corp’s migrant workers’ dormitories in Meru, Klang.

The biggest manufacturer, Top Glove workers churn out 16,000 gloves per capita each day.
Malaysia is the world’s largest source of medical gloves, with a market share of about 65% according to the Malaysian Rubber Glove Manufacturers Association (MARGMA). In 2019, Malaysia exported about 182 billion glove pieces, accounting for $4.31 billion in revenue; in year 2020, according to MARGMA, the figure could go as high as 240 billion pieces.
Top Glove Corp Bhd has recorded its best-ever quarterly net profit at RM1.29 billion in the fourth quarter ended Aug 31, 2020 (4QFY20), which is almost 18 times the RM74.17 million posted last year, (theedgemarkets.com, September 17th. 2020).

As of January 5, the Teratai cluster has recorded 6,289 Covid-19 cases out of 9,353 people who have been screened. This shows that for every 100 people who undergo Covid-19 screening, more than 67 people are being infected with the coronavirus in this cluster.

This episode only shows that value chains are based upon, and deepen, the exploitation of labour by capitalism whereby the transnational corporations (TNCs as intermediaries to say respective US hospitals, old folks homes’ and the Federal Emergency Management Agency – FEMA) collude with local corporate capital to use global labour arbitrage to create “global labour value chains” to protect their profit margins, so that supposedly decentralised global production is associated with the growing concentration of profits and economic power in the Global North.

At Top Glove, say 16,000 single-glove @ price value of RM$1 each produced by one worker per day with a paid salary of RM$80/day including overtime, a single worker is basically generating RM$200 value worth out of his ringgit/dollar effort.

The central aspect is that the surplus value – the added value created by workers in excess of their own labour-cost – is being appropriated by the manufacturing producers and the new share-trading financial capitalists as source of profits, (Marx, The Capital, chapter 8); the percentage of surplus value gained by Top Glove is exactly similar to labour’s added value but expropriated by such TNCs like Apple, Nike, Swedish retailer Hennes & Mauritz and Spice Girl’s T-shirt under Global North monopoly-capital system.

Behind such dirt wages in the periphery lies the whole history of imperialism and the fact that in 2011 the global reserve army of labour (adding up the unemployed, vulnerably employed, and economically inactive population) numbered some 2.4 billion people, compared to a global active labor army of only 1.4 billion. It is this global reserve army – predominantly in the Global South, but also growing in the Global North – which holds down the labour income in both center and periphery, keeping wages in the periphery well below the average value of labour power worldwide, as articulated by John Bellamy Foster, Robert W. McChesney and R. Jamil Jonna in The Global Reserve Army of Labor and the New Imperialism, Monthly Review, 1st November 2011.

This global value chain is a simple analysis of the modus operandi of contemporary imperialism. The shifting of production activities to third world countries – the Global South – with lower wages entails an appropriation of surplus value from these countries which is camouflaged because the act of distribution of this surplus among the various claimants (say, to an American hospital: from port forwarders to warehouse distributors to sales agents to executives’ commissions and bonuses) in the metropolis appears in an inverted form as value addition by these different claimants, and our rentier capitalists as clientelism contractors and kaki bodek sycophants participated in this whole enterprise exercise.

6] THE STRATEGIC CHALLENGES

Defeating this novel enemy requires a novel strategy that can resolve the epidemiological and economic situations by undertaking an epinomics approach. This term epinomics is the fusing of findings in epidemiology to the application of economic principles and models to solve the Covid19 pandemic rationally.

Summarised, this strategic thrust shall entail:

I) Stage ONE is about balancing epidemiology and socioeconomics by adopting the epinomics strategic approach. An epinomic approach involves managing risk by recognizing that we cannot eliminate it entirely. We need targeted public health measures that decrease risk with the lowest socioeconomic cost.

These measures require an understanding that schools being of extreme importance and should be open, but to be operational yet reasonably safe with standard implemented health-safe equipments and standard operation procedures in school compound.

Dining out and traveling, however, come with much higher risk and are not as vital in the short term. These activities should be mostly curbed where Covid19 prevalence is higher.

This is where the Parliament must re-sit to pass urgent fiscal stimulus support to give rakyat2 the food, income, and employment security needed to make these measures bearable and compliance possible.

Instead of allocating SME businesses petty sums which never reach to workers and their families, the distribution of food coupons (the Cuban social model) to rakyat2 shall maintain many of the hospitality/food and beverage industries, maintaining agriculture production and the food-processing sectors besides sustaining the precarious labour in the Gig-economy of logistic deliveries, car-hailing and online transactional platforms.

II) Stage TWO is about scaling a robust monitoring system of testing and tracing to contain the virus – in particular, by undertaking more proactive screening testing of populations, rather than relying solely on reactive testing for likely cases.

This means community screening as advocated by much of the medical profession many a time, but never fully implemented due to lack of paramedics and financial endowments; the sizeable deployment of the existing unemployed college and university graduates together with the 7,000 MoH trained general practitioners (GP), are possible ways forward in assisting the community screening and tracing followups.

Once health measures flatten the virus, and as vaccine administration ramps up, civil servants and politicians will be under social-activist pressure from rakyat2 to broadly open society, and the economy shall be more than ready for looser restrictions by then.

The country has insufficient (because of inadequate equipment? leaked fundings from rentier capitalism?) rapid tests to randomly and broadly screen entire populations, such as nursing homes, schools, prisons, and importantly, migrant workers’ quarters, and targetted taman-taman in industrial estates.

A regular screening testing of about 3% of the national population would enable the country to relax restrictions to the same degree as if we are vaccinating about 40% of the population. This particular model adoption, and as an acceptable strategic approach, shall enable a broader testing regime while the country waits the initial vaccine rollout for the populace.

Malaysia has 150 active Covid-19 clusters with above 5 per cent positivity rates, comprising a whopping 82 per cent of the country’s total 183 active clusters.

Thirteen active clusters, or 7.1 per cent of the total 183 active clusters reported nationwide as of December 2, have a positivity rate of more than 50 per cent, which means that more than one out of two people tested in those 13 clusters are infected as on December 2nd. 2020.

III) Stage THREE is about completing the administration of vaccines.

Hopefully that most of the stipulated vaccines would be 95% efficacious. Now, this nation can begin the hard work of managing the greatest logistical challenge of our time.

While executing the multi-taskings ahead, always be conscious the need to prioritize the vaccination of populations that are most health- and exposure-vulnerable, while concurrently implementing robust strategies for administration, data collection, and communication.

We need to execute a flawless rollout and provide clear, transparent communications that drive uptake. At the same time, we need to motivate people to continue observing safety measures and maintain virus-monitoring systems until the supply of vaccine doses grows and we can build up to herd immunity by December 2021.

We have been limping on tongkat along the road to perdition – under a defunctioning regime in governance for a year. The road ahead is not because it is easy, but because it is hard. It is because the road is hard, we have to be keras to complete those difficult tasks in hand to berjuang to victory.

EPILOGUE

It must be firmly reiterated that prevention of a splurging pandemic cannot depend solely on a vaccine; it also requires reducing the social inequities in our health and health care, too.

This archaic administration has to be replaced with a new politico-economy governance geared to sustainable human development, ecological plenitude, and the cultivation of genuine human community willing in sharing welfare together.

We firmly believe that there is only one possible solution to this epidemiological crisis – replacing a weak political administration, pulsating a stagnant economy, eliminating a pandemic – and that is the demise of capitalism.

The sooner we reconstruct this qualitatively new system through our mass struggles, the better the long-term prospects for humanity and planet earth – and Malaysia – will be.

NEO-IMPERIALISM EXPLOITATION OF GLOBAL RESERVE ARMY OF LABOUR UNDER MONOPOLY-CAPITALISM

PROLOGUE

To understand twenty-first-century economic imperialism we must go beyond analysis of the nation-state to a comprehension of the increasing global reach of transnational corporations on global labour force. At issue is the way in which today’s global monopolies in the center of the world economy – the Global North – have captured value generated by labour in the periphery – the Global South – under a process of unequal exchange, thereby extracting more labour effort in exchange for less wages. The ramifications are a changing of the global structure of industrial (and, increasingly, infrastructural digital) production while maintaining, and often intensifying, the global means of exploitation and value transfer.

1] TRANSNATIONAL CORPORATIONS

The transnational corporation (TNC) is the product of a process of concentration and centralization of capital that had created monopoly capital itself where the accumulation of capita has meant wider, and in furtherance of, expansion. This very process of growing and spreading is global in scope and, most importantly, imperialistic in its characteristics accompanying a widening qualitative transformation in the forms of organizational structure, and deepening dominance of monopoly capital that can be based on capital financialization, the sacking of peripheral countries’ natural resources and the comparative advantages derived from global labor arbitrage, that is, the perpetuation of significant wage differentials between states, countries and regions. In essence, this is a restructuring of monopoly capital on a world scale, with a scope that has given contemporary imperialism a new facet (Suwandi and Foster, 2016).

By late twentieth century, industrial capitalism has not changed, but evolved into globalized capitalism that increasingly adopted the form of interlinked commodity chains controlled by transnational corporations, connecting diversified production zones, primarily in the Global South, with peak consumption, swirling finance, and capital accumulation mainly in the Global North. These commodity chains constitute primarily the circuits of capital globally that is identified as late imperialism with the rise of generalized monopoly-finance capital, (John Bellamy Foster, Late Imperialism, Monthly Review 71, no. 3 (July–August 2019): 1–19; Samir Amin, Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value).

Through a system of 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 mainly located in the Global South. These are the sites where the reserve army of labor is larger, unit labor 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 through transactional process in “profit by expropriation”.

2] GLOBAL LABOUR ARBITRAGE

Under this neo-imperialistic system, exorbitant imperial rents from the control of global production are obtained not only from the global labour arbitrage, through which transnational corporations with their headquarters in the Global North overexploit industrial labour, (and presently, digital labour in the gig-economy) in the periphery Global South, but also increasingly through the global land arbitrage, in which agribusiness transnationals expropriate cheap frontier land in the developing and emerging-developed countries so as to produce export edible crops mainly for consumption in the developed and post-industrialized countries, see Intan Suwandi, Value Chains: the New Economic Imperialism (New York: Monthly Review Press, 2019), 32–33, 53–54.

As Paul Sweezy argues, while “every class society is characterized by the necessary/surplus labor dichotomy, hence by an implicit rate of exploitation…only in capitalism does this take the value form, with the rate of exploitation expressing itself as a rate of surplus value.” (Paul Sweezy, “Marxian Value Theory and Crises,” in The Faltering Economy, ed. John Bellamy Foster and Henryk Szlajfer (New York: Monthly Review Press, 1984), 238).

It is impossible to examine the capitalist economy, and the class struggles central to it, without focusing on the issue of exploitation, analyzed through the labor theory of value. This remains equally true when examining the economy at a global level.

The framework is known as labor-value commodity chains, or labor-value chains for short. Unlike mainstream theories on this subject, this framework takes into account the questions of power, class, and control.

The concept of unit labor costs, in this sense, is an operationalization of the rate of exploitation, which considers not only the question of wages but also the question of productivity.

The labor-value chains framework, empirically operationalized through the examination of unit labour costs, thus allows us to see that, behind the complexities of global commodity chains, exploitation persists. Global capital (that is, the TNC transnational corporations) engages in the search for low unit labor costs around the globe to accrue higher profit margins and overall profits. Data on unit labour costs had shown those countries with the highest participation in labour-value chains, for examples, the top three being China, India, and Indonesia have very low unit labour costs.

The global capital’s goal is to make sure that unit labor costs are stably low, even in cases where wage costs are increasing (such as the increase in minimum wage issued through governmental policies). Control mechanisms through legislations – like gazetted laws on union busting and defuncting – are instituted to allow global capital to maintain a low unit labor cost by making sure that productivity can be increased.
In May 2014, one of Apple’s most important suppliers, NXP Semiconductors, dismissed all 24 elected union officials from IndustriALL affiliate MWAP at its plant in a special economic zone in Cabuyao, Philippines. NXP claimed the union’s peaceful industrial actions were illegal. It was clear that the company’s persistent acts of intimidation and harassment were aimed at weakening the bargaining power of the union.

Similarly, in Malaysia, there were industrial conflict cases encountered with AMD and Harris Semiconductor, see Mhinder Bhopal, US Union Busting in Contemporary Malaysia: 1970-2000, University of North London; and STORM, Zero Hour Underemployment – Surplus Value Exploitation.

3] LABOUR EXPLOITATION

In Marxian economics, the rate of exploitation is the ratio of the total amount of unpaid labor done (surplus-value) to the total amount of wages paid (the value of labour power). The rate of exploitation is known as the rate of surplus-value.

Workers under capitalism are compelled by their lack of ownership of the means of production to sell their labour power to capitalists for less than the full value of the goods they produce. Capitalists, in turn, need not produce anything themselves but are able to live instead off the productive energies of each and every worker effort.

Monopoly capital enforces these differences in labour costs through a variety of mechanisms, from their monopoly control either through technology (for example: infrastructural platform) or to their ability to use competition (by adopting Porter’s competitive advantages and/or levying hypercompetition or even adapting Noorda’s co-opetition approaches) to enforce ‘flexibility’ in manufacturing process (for instance on accepting lean production). Thus Apple, through its subcontractor Foxconn, switched assembly of its products to India after there was a mere 9-12% rise in labour costs in China and Indonesia. Companies like Apple are actually not real manufacturers, but merely merchandisers, yet they are able to absorb a great share of the surplus value created by subordinated manufacturers.

Behind such dirt wages in the periphery lies the whole history of imperialism and the fact that in 2011 the global reserve army of labor (adding up the unemployed, vulnerably employed, and economically inactive population) numbered some 2.4 billion people, compared to a global active labor army of only 1.4 billion. It is this global reserve army – predominantly in the Global South, but also growing in the Global North – which holds down the labour income in both center and periphery, keeping wages in the periphery well below the average value of labour power worldwide, as articulated by John Bellamy Foster, Robert W. McChesney and R. Jamil Jonna in The Global Reserve Army of Labor and the New Imperialism, Monthly Review, November 01, 2011.

Thus, what has FELDA gone through – indebted settlers in search of industrial works – is, but a microcosm what had occurred in China during the 1980s when the latter undertook a massive reform that dismantled its social rural collectives – the communes – and divided the land among millions of small peasant families. This decollectivation campaign (Monthly Review: From Commune to Capitalism) ushered the consequential politico-economic foundation of China neoliberal labour reforms to feed the newly industrial sites along the banks of Yellow River and the South China Sea seaport enclaves.

Similarly, after 1989, with the tumbling of the Berlin Wall, another reservoir of latent labour flooded the capitalist marketplace in Europe. A freshly-proletarianised workforce initiated a primitive accumulation of capital, transforming former Eastern European state employees into freelance wage-labourers, set free to pit their wits on the flexible European labour market. The Eastern bloc’s headlong embrace of Western-style neoliberalism prised open a whole new array of market niches, together with a rojak latent labour reserve: both at home, in some newly-formed nation-states, and in the European Economic Area (EEA).

Emerging was an ideology of dictatorial personality morphed into an ideological dictatorship of the free market, with its attendant rights of consumerist man, see Andy Merrifield, Dialectical Urbanism: Social Struggles in the Capitalist City, and alienated, residue labour in industrial estates in Malaysia, see STORM, The Struggle for Shelter – the Class Struggle in Housing.
Stimulated by the European Union’s freedom of labour movement (2004), labour found low-grade jobs in powerhouses like Britain, Germany and France. Pay is better than before, yet a lot less than homegrown workers’. For instance, British businesses have prospered enormously from this influx of Eastern European labour, especially the Polish migrant workers.

In fact, there are a lot of British enterprises that have been able to valorise a cheap labour they had not had since the 1950s when many Caribbean immigrants landed on her East Dockland shore.

In many cases, the British agricultural sector has been a big gainer. Prior to 2004, crops like asparagus, cherries, raspberries and strawberries were suffering long-term decline. The pay in these sectors was little: the hard work backbreaking; few locals accepted these jobs. Yet since 2004, rather than invest in expensive new berry-picking technology, growers have exploited Eastern European labour reserves, latent labour-power, which has rekindled agricultural capital.

The modern day slavery as experienced by the Caribbean Afros, Pakistanis, east African Indians or Eastern Europeans is no different from the British ‘ forward movement ‘ during colonial political intervention into then Malaya.

The British plantation system was based on the super-exploitation of labour so much so that migrant South Indian workers became “orphans of the empire”. The wages were so low that the English assistant Leopold Ainsworth once wondered how the Tamil workers and their families could “possibly exist as ordinary human beings” on the boss’s pays in a Malayan plantation. In 1926, the cost of a Papuan indentured laborer was 20 percent of that of a white worker, 25 percent of that of an employed estate manager, and 10 percent of that of a white unskilled laborer. Racist humiliation, insult, and cruelty were part of the everyday lives of the coolies (a degorating term given to the local inhabitants), while the pale-skin estate owner sipped on a stengah (whisky and sodas) clad in sweatstained khakis, summoning a “boy” with a teapot or gin bottle to the veranda at the end of another hot and humid day with the topee on his head – a surreal scene of a Somerset Maugham novel of the Orient.

Consequently, big winners are the transnational corporations. Apple subcontracts the production of the component parts of its iPhones in a number of countries with the final assembly in China subcontracted to Foxconn. Owing to low-end wages paid for labour-intensive assembly operations, Apple’s profits on its iPhone 4 in 2010 were found to be 59 percent of the final sales price.

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), http://pcic.merage.uci.edu, 5, 11.

In the context of the Marxian labour theory of value, the global labor arbitrage is quest for valorization. It is a strategy for both reducing socially necessary labour costs and maximizing the appropriation of surplus value. It extracts, as stated, more out of workers through various means, including repressive work environments in periphery-economy factories, state-enforced bans on unionization or union-busting by the TNCs themselves, and quota systems or by means of unfair piece-rate work payments.

The global labor arbitrage is a fact because the industrial reserve army of the unemployed which, on a global scale, is the a global reserve army of labour. Central to the creation of this reserve army is the depeasantization of a large portion of the global periphery through the spread of agribusiness like, as stated in, our FELDA schemes. The resettlement of rural communities had indebted the peasantry contributing a movement from the rural areas to the growth of urban povert, see STORM, op.cit. Marx connected the “freeing” of peasants (the “latent” part of the reserve army) from the land to the process of “so-called primitive accumulation.”

Reproducing the global reserve army of labor not only serves to increase shorter-term profits; it serves as a divide-and-rule approach to labor on a global scale in the interest of long-term accumulation by transnationals corporations and the state structures like government-linked companies (GLCs) aligning, and colluding, with them. The consequent competition among industrial workers in the Global South is greatly intensified by increasing the relative surplus population. This divide-and-rule strategy serves to integrate “disparate labour surpluses, ensuring a constant and growing supply of recruits to the global reserve army” who are “made less recalcitrant by insecure employment and the continual threat of unemployment.”

The extreme system of imperialist exploitation unleashed by the linkages in the global commodity chains, (Intan Suwandi, Value Chains: The New Economic Imperialism, Monthly Review, 2019).

Suwandi shows how transnational corporations use global labour arbitrage to create “global labour value chains” to protect their profit margins, so that supposedly decentralised global production is associated with the growing concentration of profits and economic power.

Another way of putting it is that with the difference in average wages between advanced economies and the rest being very much greater than differences in productivity. This points to higher rates of surplus value being created in the economic ‘periphery’, compared to the imperialist ‘core’. Suwandi’s argument is that it is the structural power of multinationals which enable them to enforce a regime upon production in dependent economies which propel the transfer of very significant quantities of value into their hands, through ‘labour-value commodity chains’ (p.17).

On the global labor arbitrage and commodity chains, Suwandi in Value Chains, ibid. stated whereby “the shifting of production activities to third world countries with lower wages entails an appropriation of surplus value from these countries which is camouflaged because the act of distribution of this surplus among the various claimants in the metropolis appears in an inverted form as value addition by these different claimants.“

(The analysis of unit labour costs is by R. Jamil Jonna, as published in “Global Commodity Chains and the New Imperialism,” Monthly Review 70, no. 10 (March 2019): 1–24.)

4] LABOUR SURPLUS VALUE

Some notable aspects of manufactured products assembled in Global South sites are presented here.

For instance, when the Apple’s California plant is compared with overseas factories, the fact is that the cost, excluding the materials, of building a $1,500 computer in Elk Grove was US$22 a machine. In Singapore, it was US$6; in Taiwan, US$4.85; see figure below on costs of production, capital accumulation and the surplus value extracted from the production of a typical iPad in the 2010s:

Companies like Apple are not the real manufacturers, but merely merchandisers, and through image-product branding they are able to absorb a huge share of the surplus value created by subcontractors and component manufacturers.

It is not the ordinary workers in the Global South, but the Gobal North executives and corporate capital who are benefiting from the structural power of the global commodity supply chains. While Apple’s iPod is made entirely overseas, but ‘52 percent of the final sale price is counted as value added in the United States and is added to U.S. GDP‘ (Suwandi, op. cit. p.158). The surplus value, the source of profit, entirely comes from in the production process, and therefore originates completely outside the USA. However, the finance and administrative procedures take place in the core centre of Global North. In a capitalist society, under a capitalistic accounting method, the ‘surplus-value’ is regarded as ‘value added’, while in Marxist terms, these activities add no value at all (Suwandi, ibid.,p.160). With all this value accruing in the imperial centre, it is the middle-class professionals ‘including the outsized “compensation” of corporate executives – [who capture] more than two-thirds of the total wage bill associated with iPod production’, (Suwandi, ibid., p.158).

Similarly, in the international garment industry, in which production takes place almost exclusively in the Global South, direct labor cost per garment is typically around 1–3 percent of the final retail price, according to senior World Bank economist Zahid Hussain. Wage costs for an embroidered logo sweatshirt produced in the Dominican Republic run at around 1.3 percent of the final retail price in the United States, while the labor cost (including the wages of floor supervisors) of a knit shirt produced in the Philippines is 1.6 percent. Labor costs in countries such as China, India, Indonesia, Vietnam, Cambodia, and Bangladesh were even considerably lower than in the above cases. The surplus value captured from such workers is thus enormous, while being disguised by the fact that the lion’s share of so-called “value added” is attributed to activities (marketing, distribution, corporate salaries) in the wealthy importing country, removed from direct production costs.

In 2010, the Swedish retailer Hennes & Mauritz was purchasing T-shirts from subcontractors in Bangladesh, paying the workers on the order of 2–5 cents (euro) per shirt produced.

Nike, a pioneer in Non-Equity Modes of International Production, outsources all of its production to subcontractors in countries such as South Korea, China, Indonesia, Thailand, and Vietnam. In 1996, a single Nike shoe consisting of fifty-two components was manufactured by subcontractors in five different countries. The entire direct labour cost for the production of a pair of Nike basketball shoes retailing for $149.50 in the United States in the late 1990s was 1 percent, or $1.50.

Similarly, in Top Glove, Malaysia, a migrant worker is paid RM$80/day, including overtime, a single worker is basically generating RM$200 value worth of production out of his single ringgit-dollar labour effort. In the case of a crew staff at McDonald’s, paid RM$70/day in the Melawati-Setiawangsa-Ulu Kelang precinct, may promote 100 servings per day at an average RM$14 worth/serving is generating the company’s revenue of RM$20 per single ringgit-dollar of a crew member’s daily work effort, see APPENDIX A: Production Cost and Surplus Value in STORM, The Top Gloves and the Bottom Doves – Capital and Labour during Covid-19.

It would be interesting to note that Apple’s official list of its top 200 suppliers, accounting for 97 per cent of materials and manufacturing costs, includes just two companies in Brazil: Foxconn and fellow Taiwanese electronics company Lite-On Technology Corp. Foxconn currently have five facilities in the country that make products under contract for various technology companies, including just one unit producing Apple devices in Jundiai, about 30 miles east of Itu.

A worker testing iPhones earn about US$80 per week, just US$15 above the minimum wage, and a fourth strike in as many years had since been brewing again.

5] INFRASTRUCTURAL IMPERIALISM

With the advent of technology, improvements in telecommunications, introduction of computers and associated network topologies, the emergence of infrastructural platforms with seamless routers and cloud servers have taken new dimensions in prevalence of monopoly-capital, and the ensuing and deepening exploitation of digital labour.

Corporate capital solidified respective infrastructural platforms they acquired and through IT/IS competitive endowment, they have undue advantages over labour: labour control and supervision, labour harvest and deployment, maximal labour usage and exclusive exploitation thereon.

Digital technology has already transformed the world economy; the decade leading up to 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 famous quintet ‘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 by digital technology.

In 2019, even Business Insider reported with a note of horror 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 medianU.S. worker makes in year – US$45,552, according to data by the Bureau of Labour Statistics – in one minute.”

That the wealthiest figures tend to be tech capitalists are not unsurprising. The top nine wealthiest people include in their ranks: Elon Musk, Jeff Bezos, Bill Gates, Mark Zuckerberg and Larry Page. Their obscene, excessive wealth points to the tensions within private ownership of the means of production, where competition leads to monopolies and oligopolies.

Digital technology has a profound effect on workers during COVID-19. From Amazon warehouses and Top Grove living quarters with unsafe and unhygienic conditions to an increased workload that comes from working from home or GRABing a hail-car for a living, we see that it is the capitalist elite that benefits from digital accumulation.

The fact is that those who harvest our data and profit from surveilling us are rewarded, while many lives and much Gig-economy livelihoods have been lost.

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, entities would present 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 Amazon or Grab) and the supply-chain capacity to expand horizontally into new products and services with relative ease and effectiveness (examples: Google, Facebook, WeChat or Grab becoming cloud-servers, WhatsApp communications, website-e-commerce internationally, investment data mining, respectively).

Already in Capital, Marx notes how technology does not necessarily make life easier for workers. He quoted John Stuart Mill’s observation that “It is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being”, with a disagreement.

Marx writes that “like every other increase in the productiveness of labour, machinery is intended to cheapen commodities and, by shortening that portion of the working day, in which the labourer works for himself, to lengthen the other portion that he gives, without an equivalent, to the capitalist”.

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.”

It’s not capitalism, it’s not neoliberalism – what is then?

In a radical departure from neoliberalism analysis, in a visionary new book, McKenzie Wark‘s Capitalism is Dead, argues that information has empowered a new kind of ruling class. Through the ownership and control of information, this emergent class dominates not only labour but capital as traditionally understood as well. And it’s not just tech companies like Amazon and Google. Even Walmart and Nike can now dominate the entire production chain through the ownership of not much more than brands, patents, copyrights, and logistical systems – all “soft” elements than physical products, all accumulated through financialization capitalism.

Some techno-utopian may praise these innovations as an improvement on capitalism, but for workers – the global labour of the world – monopoly-capital has a new model in the guise of digital imperialism. The emergence of a new ruling class will use the pulsating powers of information to route around any obstacle labour and social movements may like to erect.

The emerging ruling class shall be the digital feudal lords overseeing a landscape of digital infrastructure over a peasantry as digital gig-slaves, (Nick Srnicek, author of Platform Capitalism).

EPILOGUE

In this digitalized business mode, returns do not diminish as businesses scale up. Rather, they increase exponentially; only that the accumulation of capital would be geared towards the exploitation of digital-dehumanised workers where they are mere interfacing intermediaries as conduits to big data storage and retrieval – and the consequential manipulation of raw data into timely, accurate, relevant and complete information – by such infrastructural capitalism platforms that are so overwhelmingly powerful in exploiting surplus value of labour but also the accumulation of capital relentlessly, and brutally.

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