INTRODUCTION

Progressive and selective trade liberalization over time has enabled international trade to become a key component of the Malaysian economy. Malaysia in fact took advantage of economic globalization in the electrical and electronics sector by creating free trade zones in the early 1970s. This provided a liberal environment for multinational companies and gave Malaysia a headstart in the region's integration into the production networks that subsequently evolved with a high degree of multinational participation in the ASEAN economies. Exports and imports as a percentage of Gross Domestic Product (GDP) of Malaysia thus grew from 55 per cent and 42 per cent in 1960 to 107.9 per cent and 87.8 per cent respectively in 2005.

Malaysia's relatively open and outward looking trade and investment policies coincided with the global trend in trade liberalization, beginning with tariff reduction following the establishment of the General Agreement of Tariffs and Trade (GATT) in 1957. The conclusion of the Uruguay Round negotiations in 1994 and the establishment of the World Trade Organization (WTO) in January 1995 introduced three new dimensions at the multilateral level. First, unlike the GATT, the WTO is a full-fledged international organization with a binding dispute settlement mechanism. Second, WTO has an expanded mandate and membership, of which the majority is the developing and transition economies. Third, WTO agreements provide for review within five years of ratification, thereby introducing a dynamic element in the construction and enforcement of rules for the conduct of international trade.

The expanded mandate has led to major agreements ratified during the Uruguay Round that address non-tariff barriers, dumping and subsidies, trade related investment measures, intellectual property rights and government procurement. The inclusion of economic rules in the WTO agreements has changed the face of trade liberalization from the mere removal of cross border trade barriers alone.

INTRODUCTION

This chapter turns to the National Culture Policy which is little remembered today outside of circles involved in cultural production in Malaysia, especially the arts community. A survey of relevant and significant publications of the past several decades shows no mention at all of the policy (Vorys 1976, Nagata 1979, Andaya and Andaya 1982, Crouch 1996, Hooker 2003, Abdul Rahman 2006). Laws passed in the areas of language and education as well as the Rukunegara [National Credo] are typically raised in discussions of culture in Malaysia but not the National Culture Policy (henceforth NCP). One of the reasons for the relative neglect of the NCP is that it was not enacted and therefore did not have the force of law. Rather, it was formulated and gained power largely due to the efforts of an exclusionary Malay cultural leadership. In addition, the NCP's influence did not last beyond the 1980s when it met with strong social protest as well as the intensification of globalizing policies. Furthermore, the NCP has been overshadowed by the formulation and implementation of the New Economic Policy (NEP). As a consequence, the cultural restructuring attempted in the 1970s has not drawn as much attention as the social and economic reorientation. The framework of the NCP remains in place but its force is much diminished today.

Why study a policy that has apparently had such a lacklustre history? The NCP was, in the 1970s and 1980s, a site of contestation over vital questions such as the culture and identity of the country. Although initiated by the government as one of the measures to encourage national unity following the racialized political crisis of 1969, the NCP became the source of a great deal of contention. Bodies representing the respective cultural interests of different ethnic groups claimed that the policy equated national culture with Malay culture to the exclusion of others. Meanwhile, the exclusionary Malay cultural leadership felt that the NCP provided an opportunity to address the historical marginalization of the Malay language and culture in the colonial era. Lloyd Fernando, then Professor of English at the University of Malaya, made the telling observation in 1969 that Malaysians who were not Malay, with a few exceptions, could speak only a smattering of Malay purely for utilitarian purposes (Fernando 1986, p. 86).

Among the fears and concerns generated by recent globalization, the most basic is the perception that globalization progressively circumscribes the autonomy of governments, nations and peoples. Relentless global market pressures and the ever more pervasive influence and requirements of multilateral organizations and agreements limit the capacity of governments to pursue their own national priorities and their citizens’ preferences. This perception is shared by bitter critics of globalization and by many of those who argue that its potential benefits outweigh its risks.

The charge that globalization reduces national autonomy underpins many other fears and criticisms, since it implies that governments and peoples cannot take countervailing actions to prevent, dilute or compensate for adverse effects. There is now widespread agreement, even among enthusiastic proponents of globalization, that it carries many risks. High on the lists of threats are environmental damage, erosion of workers’ rights, and growing inequality within as well as between nations. In principle, governments could adopt policies to regulate firms and groups that damage the environment, design programmes that promote workers’ welfare, or pursue strategies to reduce inequality. Many governments do attempt such corrective measures. But to the extent that their autonomy is indeed constrained, such countervailing measures cannot be carried far without incurring heavy costs. Globalization's threats to the environment, labour rights, equality, and a range of other goals are severe in part because nations’ autonomy to counter the threats is limited.

Globalization also generates threats that cannot be effectively addressed at the level of action by individual nations. International financial crises, climate change, the cross-border spread of diseases and many other problems largely or partly caused by globalization can only be effectively addressed through international collaboration. Nevertheless, many impacts within nations could be eased by national policies and programs, if governments could take those actions without incurring large costs such as reduced trade, aid or investment; disapproval in regional or global organizations; or possibly even sanctions.

A dissenting strand in the discourse regarding globalization challenges the “loss of autonomy” hypothesis. Since the mid-1990s, a growing number of analysts suggest that the impacts of globalization are filtered through the circumstances, policies and capabilities of each country's society, economy and political system. Hence similar pressures and opportunities have different effects in different countries. This is particularly clear with regard to links between globalization and growth.

INTRODUCTION

One strand of the globalization debate focuses on the negative impact of globalization on the autonomy of a nation state, where autonomy is defined as the ability to exercise self-determination in economic affairs. For example, Yu (2005, p. 2) summarized the views of Chinese scholars, whereby many believe that “globalization brings Westernization, and above all, Americanization of China. Such a development is equated with the loss of autonomy.” Webb and Sinclair (n.d., p. 1) note that “Economic globalization is often blamed for forcing governments to cut or alter social welfare programmes, and thereby also for limiting the autonomy of the political institutions (that is, nation-states) that are primarily responsible for achieving social welfare goals.”

In Malaysia, Tun Dr Mahathir, former prime minister of Malaysia, argued that “…for most of the developing countries, globalisation means not more freedom but less freedom from rules, regulations, laws and policies. Worse still, these uniform rules, regulations, laws and policies disregard their particular weaknesses and problems” (Mahathir 2002, p. 14). Similarly, Dato’ Mustapa Mohamed, currently minister of higher education, notes that “Globalisation is encroaching into national sovereignty and eroding the role of the State in national policy making functions.” Moreover,

This chapter considers how and if globalization forces have affected Malaysia's drive to eliminate poverty over the last three and a half decades. More specifically:

1. i. What were the trends and patterns of poverty incidence in Malaysia between 1970 and 2004? To what extent were poverty goals achieved by 2005?

2. ii. How have globalization forces affected Malaysia's persistent and long-term drive to eliminate poverty?

3. iii. What additional factors limit policy space or autonomy with regard to poverty reduction in Malaysia?

NTRODUCTION

The unifying theme in this chapter is the crucial role of the state in Malaysia's economic development and the effects of that role on interethnic income inequality. The story begins with a discussion of the state's policy role in generating the Malaysian success story, that is, the simultaneous achievement of rapid growth and social restructuring, and the ways in which social goals both underpinned and yet attenuated economic growth. A subsidiary theme is the mixed impact of globalization on the government's autonomy: while imposing constraints on specific social policies, the country's rapid integration into the world economy greatly accelerated growth and generated revenues that supported an ambitious social transformation strategy.

In part because of the crucial role of the state in this success story, the chapter also conceptualizes the public sector as one of three basic sectors of the Malaysian economy (the other two being the national private sector and the foreign-controlled export sector). It then explores how the three interacting sectors have affected inter-ethnic differences in occupations and incomes. The chapter closes with a discussion of the government's measurement of inter-ethnic income inequality in an economy where the bumiputera (Malays and other indigenous peoples) are so closely associated with government and its works. The analysis concludes that the current official indicator of ethnic inequality is misleading; alternatives would be more constructive.

When this essay was started, Malaysia's recent growth history seemed like a paradox. How could a country grow at more than 6 per cent annually for over three decades (1970–2006) despite three recessions, while investing a sizeable proportion of its resources in redressing ethnic disparity? Seen from another perspective, how was it possible to evolve in one generation from a largely rural (70 per cent in 1970) primary producer to a partially industrialized, urban (64 per cent in 2006), middle-class country, while implementing a deep, invasive, and costly social policy? Malaysia did not make any fatal mistakes and, for reasons both fortuitous and deliberate, made some very good decisions, including the policy introduced in 1968 to encourage export-oriented foreign investment.

This chapter puts forth the argument that the Look East Policy (LEP) launched in 1982 was essentially a rationale by the then Prime Minister Dr Mahathir Mohamad, to justify his vision of the New Economic Policy (NEP), a rationale greatly influenced by developments in both the international and domestic arenas. The perceived need for such a rationale illustrates an aspect of globalization affecting other countries as well as Malaysia: international currents of opinion and ideology influence investors’ decisions regarding attractive investment opportunities. Countries seeking autonomy in their choice of growth strategies, yet also desiring to attract foreign investment, may need to find ways to justify their choices that are acceptable to international investors.

Two aspects of the international situation had a great bearing on Malaysian policy: the ascendancy of the Thatcher-Reagan school advocating reduction of state involvement in the economy in order to promote economic growth, and the dazzling success of the Japanese model. These influences interacted with a domestic factor: the belief by Dr Mahathir that the NEP, which had been in existence for more than a decade, should enter a new stage. Dr Mahathir's formulation of the LEP essentially consisted of the introduction of Malaysia Incorporated, along the lines of his perception of Japan Incorporated. The LEP was actually quite a clever response to these international and domestic developments. Malaysia Incorporated was presented as a system where a particular form of state intervention could not only bring about social stability but also great economic growth. It seemed a plausible alternative to the Thatcher-Reagan approach. On a domestic level, the LEP put the priority on the development of private Malay entrepreneurs. This was a departure from the previous emphasis on the use of state enterprises, which served mainly to expand Malay employment and were not efficient, to implement the ends of the NEP.

Fifteen years later, the Asian crisis (AFC) in 1997 greatly eroded the Malaysia Incorporated rationale, because it brought about a contraction of the Malaysian economy (which should have been expanding according to the LEP rationale) and exposed the indebtedness of many high profile bumiputera businessmen created and developed as part of the LEP.

INTRODUCTION

Much of the literature on the fast growth economies of East and Southeast Asia in the last two decades has focused on the role of the state in development, and advanced the notion of what is known as the “developmentalist state” model. With Chalmers Johnson (1982) taking the lead in the early 1980s to expound the role of the developmentalist state in creating the Japanese “miracle”, a number of others have also taken up the same theme several years later. These included such scholars as Deyo (1987), Amsden (1989), Wade (1990), Appelbaum and Henderson (1992), Castells (1992), Fitzgerald (1994) and Weiss and Hobson (1995) who examined the rapid economic growth of the region by focusing, among other topics, on the role of the state in promoting industrialization and social transformation. On Malaysia, quite a number of works have also been written, mainly by economists, sociologists and political scientists, on the state's involvement in the economy and industrialization (see especially Toh 1982, Jomo 1986, Jesudason 1990, Lubeck 1992, Faaland, Parkinson and Rais Saniman 2003, Gomez 1997, Ishak 2002) as well as the role of the state in creating the new middle class (Abdul Rahman 1996, 2002, 2004, Kahn 1996a, 1996b). The state's role in the economy is considered especially crucial in ensuring the implementation of the objectives of the New Economic Policy, viz. the eradication of poverty and the restructuring of society. Although the literature is quite extensive especially on the New Economic Policy and the state's involvement and its consequences, the question of the Malaysian state as a developmentalist state, its origins and nature, state capacity and its transformation over time has not been directly addressed except in an unpublished doctoral study submitted to Universiti Kebangsaan Malaysia by Sity Daud (2003). Sity deals with certain aspects of the question by examining it through the implementation of the NEP (1971–90) and the National Development Plan (1991–2000).

This chapter is a modest attempt to deal with the question of the Malaysian state as a developmentalist state, its origins and nature, as well as the transformation of its capacity and autonomy in engaging with globalization from the 1970s to the present. It first seeks to explain the origins and nature of the Malaysian developmentalist state, and then examine some components of state capacity that enable the state to undertake development and advance the public good.

The preceding chapters survey globalization's multiple impacts on Malaysian policies in the economic, social, cultural and religious realms. This concluding discussion summarizes the findings and also addresses some further questions. What factors or circumstances helped to preserve substantial autonomy with regard to economic and social policies? Are these factors likely to have similar effects in the future, or is Malaysia at a turning point? What broader reflections on globalization and autonomy can be drawn from Malaysia's experience?

Globalization's impacts extend far beyond the selection and implementation of government policies. Market pressures, for instance, may depress industrial wages. That impact may be heightened or diminished by government action; it may be consistent or in conflict with government goals. A different illustration: globalization's cultural influences may profoundly affect local tastes, values, and artistic expression, yet these influences operate largely independently of government policies. It is often difficult to disentangle effects on policy space from direct impact on outcomes. Insofar as possible, however, this survey has focused on globalization's effects on policy space — that is, autonomy and capacity.

Globalization affects policies both through constraints and through influence, although much of the discourse on globalization and autonomy is framed solely in terms of constraints on policy. Governments are described as adopting specific policies because they are in some sense forced to do so — as explicit conditions in multilateral agreements or conditions for aid, or to avoid adverse effects (reduced foreign investment, reduced ability to compete in international trade), or because some actions are necessary to support already established strategic choices. Governments may also be constrained to adopt particular measures because globalization has created strong demands among the public or specific interest groups (the “bottom-up route”). In all such cases, policies are adopted to avoid negative outcomes or as the price of increased benefits or opportunities. Governments may also introduce policies because they are influenced by external ideas or examples that point to previously unimagined opportunities or new approaches. Some of the effects of globalization on Malaysia's policies are better described as responses to influence and opportunities, rather than constraints.

Well before Malaysia gained her independence, education policies were the focus of intense debates and considerable political conflict. Virtually all groups viewed expanded and improved education as a paramount factor driving the new nation's development, combating poverty, staffing and expanding vital government services, and creating a modern society. The education system was also regarded as a key means to three additional and equally important goals:

1. • As the Introduction to this volume briefly notes, during the period leading up to Independence, creating national unity while respecting diverse cultural legacies was a crucial challenge. Equally clearly, the education system potentially could play a central role in encouraging unity. But Malay and Chinese leaders held opposed views on how best to approach this goal.

2. • Implicitly before 1970, and explicitly under the New Economic Policy (NEP), education was also viewed as the main means to narrow the differences among ethnic groups in income and occupational structure.

3. • In Malay tradition reaching back to pre-colonial days, education was inextricably linked to Islamic religious instruction. This goal was given modest recognition at the time of independence, but from the late 1970s it became increasingly important.

The evolution of the education sector in Malaysia is in large part a story of interactions and changing priorities among these four goals, and of conflicting definitions of their meanings. External pressures and influences have changed over time, and bear differently on different goals. The searches for national unity and for means to narrow the ethnic gap spring from and respond to fundamental domestic concerns. In contrast, the role of education in generating knowledge and skills for an increasingly complex economy has always been influenced to some degree by the needs and demands of foreign investors and trading partners and the requirements for transferring technology. Initially, however, education was seen to serve Malaysia's internal development. As the economy became more complex and more integrated with the global economy, and as international economic competition intensified, the goal of providing human resources for development increasingly focused on building capacity to compete successfully in international markets.

The world is experiencing growing religious pluralism amidst rapid globalization. Religious pluralism has two faces: it can promise peace and harmony through mutual tolerance and understanding, but it can also pose challenges to social cohesion. Recent global and regional events and developments have shown how religion can be misused and misinterpreted to cause conflict among countries and peoples, be it through military intervention or incendiary words and actions of zealots. Yet, all religions teach love of humankind, peace and harmony, and share the same golden rules to treat others as one would like to be treated himself and forgive those who have wronged us. Such common religious teachings are now being actively harnessed to nurture harmonious personal and group behaviour for the larger common good of society.

Singapore has long been an example of religious pluralism. Our largely religious population adheres to the tenets of various faiths and an extensive range of religious traditions, customs, expressions and organizations. This overlaps with an equally impressive range of ethnic and cultural diversity. Adding yet another layer to this diversity is the Singapore state which is strongly secular in its administration and yet fully supportive of freedoms to adhere to one's faith. The state also engages with the different religious groups for the purpose of nation-building. I believe that Singapore's experience of religious pluralism, its record of peaceful inter-religious relations and its management of mutual religious recognition could be a useful reference as we deal with the challenges that are apt to influence our society from the growing impact of religious practices and preachings from around the world.

This book is the result of extensive research and a rare collaboration that cuts across religions, disciplines and interests. Its collection of reflective essays provides a range of information, illustrations and insights of Singapore's religious landscape, discusses candidly specific religious issues and developments, and offers suggestions for managing them. It will help to address, to a certain extent, the concern about the need for understanding both the intra-religious and inter-religious tensions that surround us.

I would like to congratulate IPS, especially Dr Lai Ah Eng, the editor of this book, for taking the initiative to address a difficult subject and delivering a seminal volume.

INTRODUCTION

As a network religion that spans the globe, evangelical Christianity is one of the most important social movements of the last two centuries. As a consequence of evangelism and missions, Christian communities exist in all parts of the world, and Christian leaders often pronounce their religion a universal brotherhood. But evangelical Christianity is highly diverse and plural, with networks that are multiple and overlapping.

The term “evangelical” does not describe any particular group or denomination, but rather tends to be applied to a variety of churches and organizations formed in the eighteenth century or later under the influence of widespread revivalist movements. As a religious movement, evangelical Christianity has changed over time, but nonetheless continues to have at its core a “remarkably constant” set of features (Bebbington 1989, p. 4). Scholars of evangelical Christianity commonly cite David Bebbington's formulation of these persistent features, which are: “conversionism, the belief that lives need to be changed; activism, the expression of the gospel in effort; Biblicism, a particular regard for the Bible; and what may be called crucicentrism, a stress on the sacrifice of Christ on the cross” (Bebbington 1989, p. 3). Mark Noll observes that these traits “have never by themselves yielded cohesive, institutionally compact, or clearly demarcated groups of Christians”, but they do identify “a large family of churches and religious enterprises” (Noll 2001, p. 13). One recent study estimates that out of two billion Christians in the world, 650 million are evangelical (Noll 2001, p. 278).

Evangelical Christians living in multi-cultural, post-modern North America and Europe are aware that attempts to convert others to their religion may cause offence or lead to the charge of intolerance. Indeed, some Christian theologians and historians now conclude that proselytism is based on absolutist assumptions of divine election that no longer have a place in a diverse, pluralistic world. Many Christians now participate in interdenominational and inter-religious dialogues, seeking to build unity rather than division, and theologians like Taiwanese Presbyterian Choan-Seng Song (1990 [1979]) have proposed alternatives to the exclusive Christian doctrine of salvation, emphasizing for example the development of an Asian theology contextualized in Asian philosophy and culture. But Song's views are not widely popular in Singapore, where most churches are evangelical and missionminded.