Get out of the rot: Think system

To move forward in turbulent times, Malaysia needs to end silos and band-aid, piecemeal solutions in our reform efforts. We have to think system. It means getting all the acts together.  

In the years to come, unprecedented uncertainties will be the norms, not exceptions. Nations will have to grapple with inequality, Covid-19, and other health crises, climate and environmental challenges, and geopolitical rivalries.

How we do things

However, Malaysia seems unprepared for any of these systemic challenges. Being a lucky country well-endowed with natural resources and strategically located in globally critical waterways, Malaysia muddles through many past problems.

Hence, there has never been a proper political or civic tradition of asking tough strategic questions at the systemic level. It has always been a piecemeal solution for each calamity that would later reemerge as a new problem.

Often, thinking is outsourced at all levels to consultants or business lobbying.

For instance, cities are mostly planned by private developers with passive government authorities reactively approve or disapprove, sometimes motivated by bribery or other non-technical considerations.

The recent floods in the Klang Valley are Exhibit No 1 that the sprawling over the past 50 years which saw rubber and palm oil plantations being turned into housing estates is not only costly when it comes to provision of infrastructure (water supply, sewerage, roads, broadband etc.) but very bad from the point of view of emission/climate.

Major military procurements, such as the RM9 billion Littoral Combat Ship (LCS) project, are often vendor-driven and not necessarily a reflection of defence and military priorities.        

Silos are prevalent within the government and across the society. Agencies within a particular ministry do not coordinate with each other, not to mention across ministries and with government-linked corporations (GLCs), private businesses and with non-profit organisations.

A case in point is that there are more than 50 large-scale shopping malls within 10-kilometer radius in Kuala Lumpur and Petaling Jaya, mostly not doing well, and some of which built by GLCs, theoretically public money.

A massive addition to the glut of office spaces in Kuala Lumpur, especially after the completion of the Permodalan Nasional Berhad (PNB)-funded Merdeka 118 and 1MDB-related Tun Razak Exchange (TRX), is another lamentable case which will have long-term adverse effects on the urban fabric as well as the financial sector in Malaysia.

We rarely pay attention to the nearly 7,000 deaths each year caused by road carnages, and the tens of thousands who are severely injured. The economic costs and the strains on the overall healthcare system are enormous, not to mention the emotional traumas experienced by many.

Motorcyclists accounted for two-thirds of these deaths and injuries for a simple reason: the poor who can’t afford to own a car are forced to use motorcycles as the main mode of transport due to the sad state of public transit across the nation.

How we should do things

The fundamental shift of mindset needed in this new era of uncertainty is to “think system”.

In simple language, Malaysia must get its acts together as a nation. The government must coordinate actions across the broad and act as one, not left hand fighting right hand or blaming each other. Those who own capitals must take into consideration the interests of all stakeholders, including workers, consumers, and the environment, beyond quarterly profits.    

Political leadership is required to build societal-wide consensus on overarching common purposes or what economist Mariana Mazzucato calls “missions”.  

The first and most important mission is to build a middle class society that looks like a diamond-shape when it comes to income and wealth. A society that puts economic security of its citizens at the centre. A society which has a strong middle class and less poor at the bottom. A strong middle class can only be created if there are efforts to grow wages, skills, technology, and productivity at once.

Only a diamond-shape society can ensure high collection of taxes based on higher wages and higher incomes. I hope those who campaign for the revival of Goods and Services Tax (GST) understands this point. There is no point to say that most poor do not pay tax and let’s tax them for their consumption to expand the tax base.

The year 2022 is both a threat and an opportunity. Bottlenecks in global supply chain has caused inflation to rise. Social tensions rise with inflationary pressure.

Politicians and well-wishers can give out free food to the poor and governments can give welfare, to limited utility. The real solution is to combine higher wages with rapid productivity gains through adoption of technology at a quicker pace.

Herein lies the opportunity. As Covid-19 also disrupted foreign labour influx, and as the United States and many other countries discovered painfully, not everyone wants to work the lousy jobs like they did pre-pandemic. Wages are already on the rise anyway due to shortage of supply.

What the society needs is a consensus: rising wages that comes with reduction of the use of manual labour cum adoption of technology/automation is a win-win for the society. 

With a concerted effort to move wages, skills, technology, and productivity to increase at once, Malaysia may reach a stage of a diamond-shape society within a reasonable timeframe, say a decade. 

The second systemic mission is to avoid population turning diamond-shape, i.e. rapidly aging. Only if we can manage to create a middle-class society with social supports that do not find childbirth and bringing up children a costly affair, the aging population can somehow be halted.

China found it in the hard way and now attempted to push “common prosperity” to dismantle concentration of wealth. The Biden Administration is attempting to fund childcare and other care work for the same reason.

Fundamentally, as economists Paul Collier and John Kay argued in Greed is Dead: Politics After Individualism, forty years after the Thatcher revolution, the world found out that societies do exist, and individuals exist within the context of a society. Therefore, solidarity is the cornerstone of any society.

A system that provides adequate social supports such as healthcare, aged care, education etc. to families and communities are key to keeping population growing and not declining too fast.   

Malaysia needs to build a health system that is sufficiently resilient if challenged by further Covid-19 variants or other pandemics, and to deal with the aging society that is to come. As a nation, Malaysia needs to spend a higher proportion of its GDP on healthcare.

At the same time, more money doesn’t mean better healthcare, the state of healthcare in the United States is a sorry reminder. Malaysia needs to bridge the gap between private and public healthcare via taxation and insurance, as well as more coordination and collaborations.   

The third mission is to build climate-friendly cities and environment. The recent floods are not going to be the last.

Malaysia needs to reverse the last 50 years of sprawling to bring people back to the inner cities, build affordable and efficient public transits everywhere in the country, and deal with deforestation with greatest urgency possible.

Individual building owners can make their structures as “green” as possible but if people are still stuck in the jam for hours to get to work and go home in single passenger cars, nothing will change. We will still be emitting unnecessarily. 

It’s time to move away from this “garden city” thinking that segregates workplace from home and recreational spaces. I wish more policy makers will read Jane Jacobs’s classic The Death and Life of Great American Cities.

The fourth mission is to think about security and defence systematically and strategically. Malaysia the lucky country did not see many wars or conflicts especially since the Hatyai Accord in 1989 with the Malayan Communist Party.

We are resting on our laurels in many ways. Silos abound in the security sector. And we are not ready for cyber warfare, urban warfare, chemical warfare etc.

Malaysia used to be at the forefront of regional security architecture and often punching above our weight in global affairs. Now that the world’s attention is on South China Sea and that geopolitical rivalry between United States and China is happening at our doorstep, Malaysia appears hapless.

Across Malaysian society, among governments and even among my colleagues in the opposition, security and foreign affairs are taken too lightly. This must change.  

The fifth mission for Malaysians is to update the system for the 2020s. The Malaysian state is ossified. It is stuck in the 1990s if not earlier.

As I have argued elsewhere, the 2018 general election has caused the UMNO hegemony to fall but the new political order is yet to emerge. There is no more presidential premiership, yet many have not come to the realisation that prime ministers are just first among equals.

The parliament, the judiciary and other institutions need to be allowed to carry out their constitutional functions without fear or favour. The general civil service needs more technical expertise and competence. There is no more Big Brother in Putrajaya watching over the states but a new equilibrium between the centre and the states have yet to emerge.

2022 is the time to think system. Any piecemeal or band-aid solutions are not going to help much because we will continue to be trapped in the same vicious circle.

This article was first published in The Edge and Reuters’ special edition BREAKINGVIEWS 2022: Predictions and Prescriptions

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Get out of the rot: Think system

To move forward in turbulent times, Malaysia needs to end silos and band-aid, piecemeal solutions in our reform efforts. We have to think system. It means getting all the acts…
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