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Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts

Tuesday 12 March 2024

Why West misreads new development paradigm

 

A view of Beijing's CBD area. [Photo/VCG] - China Daily/ANN

IN all ancient civilisations, especially in Asia, material and socio-cultural-spiritual development progressed more or less hand-in-hand. Hence, there was generally balanced human progress, even though all the civilisations had their share of shortcomings.

A major disruption occurred with the Industrial Revolution in the late 18th and 19th centuries. Spurred by new productive forces, the Industrial Revolution facilitated epoch-changing discoveries in science and innovations in technology, which exponentially raised many European nations’ capability to generate material prosperity.

As a result, European countries became fabulously wealthy.

However, the European countries used, rather misused, the new productive forces to consolidate their hold on their colonies in Asia, Africa and Latin America. They ruthlessly exploited and pillaged the colonies’ resources, seeking to destroy native cultures and establish European civilisational superiority.

Their fierce internal rivalry, though, led to two horrific world wars, which claimed millions of lives and ruined the economies of both the victims and perpetrators.

Hence, Western nations, despite their superior material wealth, became culturally, morally and spiritually impoverished. Even the birth of the United States was an outcome of the sordid history of colonisation. European powers literally mass-annihilated almost all the Indigenous peoples in the Americas in their lust for land and riches.

The United States, in the last century, contributed to the further explosive growth of productive forces with revolutionary advances in science and technology, especially in computers and the Internet, heralding the “information age”.

Nevertheless, these productive forces, being at the service of an uncontrolled capitalist system, have been misused leading to the extreme concentration of wealth and power in the hands of a minority.

Moreover, US administrations have abjured neither the Western instinct for global domination nor the habit of using their country’s powerful productive forces to launch illegitimate wars.

The importance of the rise of “new quality productive forces” in China needs to be understood against this historical background. Many in the West have dismissed it as just another “buzzword” meant to divert the international community’s attention away from China’s economic slowdown.

However, the concept can be properly understood only in the context of the Chinese leadership’s goal of developing “China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious and beautiful”.

Seen from this perspective, the new quality productive forces, wedded to people-centric and planet-protective development, could be the harbinger of a significantly different kind of, and balanced, human development.

The rise of new quality productive forces in China will have both domestic and global impacts. It is accompanied by, and is contributing to, positive changes in the West-dominated world order.

For the first time in modern history, China is surging ahead of Europe and the United States in scientific research and innovations in technology, especially in deploying new technologies and innovations.

China’s new quality productive forces are primarily in the areas of new energy, new materials, new hi-tech manufacturing systems and new applications of artificial intelligence.

In terms of the production and use of solar photovoltaic panels and other clean and green energy products, China is far ahead of the rest of the world. In fact, China installed more solar panels in 2023 than the United States has ever built, setting new standards in low-carbon footprints.

Besides, there are more industrial robots in Chinese factories than in any other country. In space and ocean research, too, China is advancing at a pace faster than the West. For instance, it is developing the world’s first quantum communications satellite network. China now ranks No. 1 in science and technology innovation clusters in the world.

While China is making rapid strides in developing its strategic industries, its agriculture and traditional industries are also becoming smarter and more innovative. As a result of the huge innovation-led increases in productivity, quality and efficiency, the Chinese economy is sure to navigate its current challenges satisfactorily.

However, China’s new development paradigm differs from that of the West in the past in one crucial respect: Chinese leaders have time and again emphasised that China will never seek hegemony irrespective of how prosperous it becomes. China is not trying to replace the West in global domination. Instead, it aims to help improve the world order by making it equitable, fairer, more representative and more democratic.

Five features set apart China’s new quality productive forces from the Western template.

First, China has not become the world’s second-largest economy by colonising any other country or by exploiting or stealing other countries’ resources. On the contrary, it has made much of the self-reliant technological advances despite the unlawful sanctions imposed by the United States and other Western countries.

Second, China has not misused its technological prowess by waging deadly wars against far-off countries. As a matter of fact, it advocates resolving disputes through dialogue.

Third, China aims to use the scientific and technological breakthroughs primarily for boosting all-round development so its vast population can lead a high-quality life and the country can achieve common prosperity. It has already lifted about 800 million people out of extreme poverty within a short span of four decades – a feat unparalleled in history.

The fact that the common people are living much better lives, as I have seen during my travels across the country, shows China is committed to using its resources to enrich its human capital, an obligation many Western governments have nearly abandoned.

Fourth, China is sharing its development experiences with other countries so they can learn from them and apply them, if necessary, to boost their development. As a matter of fact, the Belt and Road Initiative shows China is committed to helping build a community with a shared future for mankind.

And fifth, in its 5,000-year history, China has achieved great feats in arts, culture and science and technology, while seeking harmony in society – and in the world at large – although it has suffered many setbacks and foreign aggressions.

Now that China has become a moderately prosperous society in all respects, it views its development propelled by new quality productive forces as a contributor to the rejuvenation of the Chinese nation and a driving force behind the creation of a better world order.

Most Western observers fail to understand this civilisational wisdom guiding China’s modernisation. — China Daily/ANN

By Sudheendra Kulkarni,  an advocate of India-China-Pakistan cooperation for a New South Asia and was an aide to former Indian prime minister Atal Bihari Vajpayee. The views expressed are the writer’s own.

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Sunday 10 March 2024

Overlooking principles

 


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Friday 8 March 2024

China: Democracy that Delivers

 

Thousands of NPC deputies & CPPCC members gather in Beijing with their proposals about national policies. In a one-hour special episode, CGTN's Liu Xin engages with experts about China's democratic practices, and one mystery guest appears to share insights! #2024ChinaAgenda


Whole-Process People's Democracy from a Global Comparative Perspective

A recent global survey by the Academy of Contemporary China and World Studies reveals that the value and practice of whole-process people’s democracy have won widespread plaudits throughout the international community.

Developing whole-process people’s democracy is one of the intrinsic requirements of China’s modernization. It is a creation of the Communist Party of China in the process of advancing democratic theories and practices through drawing on the historical lessons of China and the world in governance. Whole-process people’s democracy fits Chinese conditions, as manifested in China’s nationwide vibrant vitality. It also contributes Chinese wisdom to the global promotion of democratic practice.

In 2023, the Academy of Contemporary China and World Studies conducted a survey in 23 countries across five continents on practice and modern development of democracy in China. Results showed that the value and practice of whole-process people’s democracy has won widespread plaudits throughout the international community.

While “acting” as deputies to the people’s congress, foreigners from the Global Young Leaders Dialogue program experience the solemn exercise of state power on behalf of the people by pressing voting keys on the desks of the Standing Committee of the Beijing Municipal People’s Congress. (Photo: China Today)

While “acting” as deputies to the people’s congress, foreigners from the Global Young Leaders Dialogue program experience the solemn exercise of state power on behalf of the people by pressing voting keys on the desks of the Standing Committee of the Beijing Municipal People’s Congress. (Photo: China Today)

Democracy Takes Root in China

Democracy is a universal aspiration. In light of different social and political conditions, as well as historical and cultural traditions, however, different countries have followed different democratic paths. Upon the end of the Cold War came a call from the international community to follow the Western approach to democracy, which it regarded as “universal,” eternal, and humanity’s sole pathway to a happy life.

Western countries hence exported their particular vision of democracy, which certain developing countries aped. But the result, rather than peace and development, was turmoil. Former Dutch foreign minister Wopke Hoekstra once said that many countries had lost interest in Western democracy, rather preferring their own versions, and nor did they buy the Western interpretation of human rights. The loudly overt disinclination on the part of these countries to bow to Western democratic norms strikes a chord in the international community, Hoekstra said.

Results of the Academy of Contemporary China and World Studies survey showed that 95.7 percent of respondents endorsed the view whereby countries should choose the path to democracy and modernization that is best suited to their national conditions; moreover that variances in countries’ national conditions and stages of development make impossible the Western one-size-fits-all democratic model.

Whole-process people’s democracy has advanced and been formed on the basis of China’s historical traditions, culture, and economic and social development. It embodies the essence of fine traditional Chinese culture. As the world’s longest “continuous civilization,” China boasts more than 5,000 years of history, which embodies the Chinese nation’s most profound spiritual pursuit. It is also imbued with the Chinese nation’s specific world view, values, and conceptions of history, civilization, and democracy. Chinese traditional culture regards people as the foundation of a state which, when solid, endows stability and tranquility upon that state. The people are thus more important than the ruler. Traditional Chinese democratic ideas and aspirations regarding the common good so form the cultural basis whereon the values of whole-process people’s democracy are nurtured.

The survey also showed that the traditional values conveyed by whole-process people’s democracy have achieved recognition throughout the international community. More than 86 percent of those polled endorsed the values of harmony, benevolent government, rule of law, and rule of virtue as most precious and relevant to improving global democratic politics.

Democracy with People at the Center

Democracy is not a decorative ornament, but an instrument for addressing issues that are of concern to the people. Distinguished British journalist, academic and political commentator Martin Jacques has targeted Western democracy with a torrent of questions. Given that many in the West regard their governance system as the world’s best – hence one with which the Chinese system could not possibly hope to compete – why is it that the West is in such a rapid decline? And how has China managed to attain such upending changes over the last 40 years? Don’t the two respective governance systems have impact on such distinctly contrasting trajectories?

The Global Satisfaction with Democracy Report, published by Bennet Institute for Public Policy at the University of Cambridge, showed that people in more than 100 countries and regions are dissatisfied with Western democracy, and that 2019, the year the COVID-19 pandemic broke out, reflected the highest level of democratic discontent on record. The reason may be that the malfunctioning Western democracy has resulted in governance failure; hence that Western democracies are suffering a crisis of faith.

Whole-process people’s democracy, meanwhile, requires that the running of the country by the people is specifically reflected in governance policies and measures. Ronnie Lins, CEO of Center China & Brazil: Research and Business, said in 2017 at the BRICS Governance Seminar in Quanzhou that China’s governance model exhibits extremely high efficiency by virtue of the country’s remarkable achievements. China has indeed won the people’s support through state governance that emanates from democratic practice, which is tailored to the people’s interests and needs.

Results of the Academy of Contemporary China and World Studies survey showed a global belief on the part of respondents that China’s employment of whole-process people’s democracy to improve the state’s capacity for governance and modernize the state governance system stands as testament to the strong practical efficacy of the Chinese democratic system. An average 94 percent of respondents from 23 countries – a 7 percent increase over the previous year – praised China’s capacity for state governance, saying that the country’s highly efficient, stable, and sustainable policy decision-making embodies the modernization level of the country’s democratic governance. A substantial proportion of respondents from developed countries – almost 10 percent higher than that of the previous year – was particularly lavish in their plaudits.

Whole-process people’s democracy lays great store on resolving the contradiction between people’s ever-growing needs for a better life and unbalanced, inadequate development. It is committed to realizing sound, stable, high-quality development, and ensuring that development results bring the people ever greater benefits. Ong Tee Keat, chairman of the Center for New Inclusive Asia in Malaysia, said in an interview with Beijing Review that China’s democracy is for the people and realized through a goal-driven approach. Substantial improvements in people’s lives, large-scale poverty reduction, and a far higher standard of public health services provide solid evidence that the priorities of the Chinese government are fueled by its pursuit of the people’s wellbeing.

The practical efficacy of whole-process people’s democracy has won widespread approbation throughout the international community. The survey showed that respondents from 23 countries are optimistic about China’s economy. An average 93 percent of them believed that China’s economy shows resilience and high potential, and that it will sustain growth in the long run. They spoke highly also of China’s manufacturing and technological innovation, saying that whole-process people’s democracy has spurred social innovation. More than 90 percent of respondents praised China’s Internet technology, high-speed rail technology, 5G telecommunication technology, infrastructure, and super hybrid rice technology. They believe that China heads the world in technological innovation, and provides its people with high-quality products.

While “acting” as deputies to the people’s congress, foreigners from the Global Young Leaders Dialogue program experience the solemn exercise of state power on behalf of the people by pressing voting keys on the desks of the Standing Committee of the Beijing Municipal People’s Congress. (Photo: China Today)

Foreign young representatives from the Global Young Leaders Dialogue program visit an exhibition about the development history of the Beijing Municipal Committee of the Chinese People’s Political Consultative Conference. (Photo: China Today)

Holistic Approach to Democracy

Functionally, democracy is supposed to build consensus in society, rather than social division or confrontation. But today, political polarization is rampant in Western democracies. Disputes and confrontations prevail within organizations and communities, and also among different political parties, social classes, and ethnic groups. The State of Democracy in the United States: 2022, published by China’s Ministry of Foreign Affairs in March 2023, observed that the United States has fallen victim to the vicious cycle of democratic pretensions, dysfunctional politics, and a divided society. Such problems as money politics, identity politics, social rifts, and the gulf between rich and poor have worsened. A 2024 Gallup poll shows that only 28 percent of American adults are satisfied with U.S. democracy – lower even than the 35-percent satisfaction rate shortly after the Capitol riots on January 6, 2021. A record low indeed.

China, meanwhile, after more than 40 years of reform and opening-up, has created two miracles of rapid economic growth and long-term social stability. Whole-process people’s democracy has been instrumental in maintaining long-term social stability. It ensures that the people gain equal benefits from development achievements and enables them to express their demands and concerns in a timely manner. Favorable public opinion thus provides a stable foundation for China’s sustainable development. The Academy of Contemporary China and World Studies survey showed that 92 percent of respondents in 23 countries – almost 5 percent more than in 2022 – regard Chinese society as stable, solidary, safe, and orderly. Similarly positive opinions among respondents in developed countries rose by nearly 10 percent.

Practice has shown that the Chinese people fully recognize and support the role that whole-process people’s democracy plays in realizing the running of the country by the people, and building consensus. This demonstrates China’s institutional strength, as well as the vitality and bright future of whole-process people’s democracy, the latter of which (the survey showed) has greatly improved public confidence in and satisfaction with the government. More than 98 percent of Chinese respondents said that they trust the government, and are satisfied with the country’s democracy and clean government. Over 94 percent of the Chinese people polled expressed satisfaction with social fairness and the environment, and confidence in the Chinese culture. The effect of whole-process people’s democracy is obvious in having heightened the people’s sense of advancement, happiness, and security, as reflected in the opinions of more than 96 percent of Chinese respondents.

Since 2021, the Academy of Contemporary China and World Studies has organized the Global Young Leaders Dialogue program, under which it launched a global youth salon themed on observing whole-process people’s democracy through Beijing’s practice. Young people from more than 10 countries, including the United States, Italy, Pakistan, Nepal, and Colombia, had an immersive experience of China’s whole-process people’s democracy in the offices of the Standing Committee of the Beijing Municipal People’s Congress, and in the Beijing Municipal Committee of the Chinese People’s Political Consultative Conference, as well as in residential communities. In the event, these young representatives from foreign countries “acted” as deputies to the people’s congress where they pressed the voting key, so experiencing the solemn exercise of state power on behalf of the people. They also put into operation the Beijing Municipal People’s Congress online budget supervision system, and were awed at the extent to which big data empowers the people’s congress review of the government budget.

These young foreign representatives believe that China’s democracy consists in a process of building consensus, which entails collecting and fully discussing public opinions, and then reaching consensus. For both mundane matters, such as everyday life issues and transport, and more important ones, like urban planning and implementation of reform measures, the people can express their opinions and make suggestions through democratic channels, thus for administration, legislation and law enforcement to be more procedure-based, democratic, sound, and effective.

There is no one-size-fits-all political system. Each country presents its distinctive values in building democratic systems and advancing democracy. Whole-process people’s democracy is not about exporting Chinese democracy to other countries. Rather, it tells those that are pursuing democracy that each country is entitled to search out the political system and path to democracy best suited to their national conditions. In the future, countries should learn from each other while forging ahead. Both drawing on the experience gained from fine political civilizations and giving full consideration to their national conditions and political practice, countries should take a problem-oriented approach to seeking out a model of democracy that fits their national contexts. Countries should join hands in opening up new chapters in the politics of human civilization.  

By YU YUNQUAN                     

YU YUNQUAN is president of the Academy of Contemporary China and World Studies.


Two Sessions 2024

Check out our special coverage to explore more news on Two Sessions 2024

By Global Times | 2024/3/7 15:24:45

#GTGraphic: China's annual legislative and political consultative sessions, also known as the two sessions, will open next week. Take a look at the graphics to get some basic information.

Thursday 29 February 2024

What does Blinken's 'table and menu theory' signify?

US Secretary of State Antony Blinken takes part in a panel discussion at the Munich Security Conference (MSC) in Munich, southern Germany on February 17, 2024. Photo: VCG

Recently, during his participation in the Munich Security Conference (MSC), US Secretary of State Antony Blinken made a statement that offers significant room for interpretation and is worthy of in-depth analysis. When responding to a moderator's question concerning that "the US-China tensions are leading to greater fragmentation," he used an American slang phrase, stating that "if you're not at the table in the international system, you're going to be on the menu." Translated into Chinese, the meaning is akin to "if you're not the knife and the chopping board, you'll be the fish and meat on the board." As the chief diplomat of a superpower, Blinken's use of this phrase reveals a worldview characterized by a harsh and chilling perspective of a world where the strong prey on the weak.

This is not the first time Blinken has made such remarks. On January 24, 2022, during a forum, Blinken used this same phrase to elucidate the China-US relationship, emphasizing that in competition with China, they should make sure that the US is "at the table," but not on the menu. Going back further, this phrase appeared in a 1993 article in an American Middle East affairs journal, describing the situation in Lebanon at that time.

Subsequently, individuals of different backgrounds used it in various contexts. However, Washington politicians gradually found that it "vividly and accurately" encapsulates the US worldview and foreign strategy, making it resonate with their beliefs. Hence, Blinken reiterated the remarks.

The phrase "if you're not at the table, you'll probably be on the menu" is extremely straightforward, even blunt, representing a stark zero-sum game mentality. In plain language, if you have the strength, you devour others at the table; if you lack strength, you become the prey on the menu. It adheres completely to a jungle law where power and status, not ethical or legal norms, dictate actions.

Over 200 years ago, the massacre and land usurpation against the indigenous peoples living in North America were manifestations of this mind-set. World War I instigated by old European empires and, to some extent, the Cold War can also be seen as examples. However, with the progress of political civilization and the development of economic globalization, this mind-set and approach are increasingly unpopular.

In fact, even within the US, the use of this slang phrase is filled with criticism and reflection, because it implies that when privileges that can be enjoyed at the table appear, it is usually at the expense of sacrificing others. The corresponding Chinese phrase "if you're not at the table, you'll probably be on the menu" is even more filled with the humiliation of being at the mercy of others. Strictly speaking, Blinken, as the chief diplomat of the US and a professional diplomat, speaking such words can be considered a slip of the tongue and a loss of composure. However, his repeated blunt remarks in international public forums also indicate the unapologetic hegemonic thinking of current American diplomacy.

Washington's current official diplomatic rhetoric emphasizes the so-called "rules-based international order," but it is all used as tools to demand, restrain, and accuse others, or to cover up US own hegemonic intentions. Blinken's "table and menu" remarks indicate that the underlying logic that Washington truly believes in and follows in its foreign strategy has not fundamentally changed. He may also be intended to create a sensationalistic effect of intimidation. In the US Congress, there is a mobilization of public opinion on the strategy of containment against China, while internationally, the US is coercing other countries to take sides between it and China, or else they will end up on the menu.

Former US president Woodrow Wilson once said "the small states of the world have a right to enjoy the same respect for their sovereignty and for their territorial integrity that great and powerful nations expect and insist upon." The principle of sovereign equality of states established by the Westphalian system has long been one of the fundamental principles of international relations and international law. All countries, especially small ones, have a higher awareness and insistence on sovereign equality. However, centuries later, the chief diplomat of the US seems more convinced of power politics, and unashamedly uses the privilege of "sitting at the table with a Western knife and fork to prey on others" to pressure and entice other countries. It must be said that this is also the tragedy of American diplomacy.

Today's world is not a private restaurant monopolized and controlled by individual superpowers, but a broad stage where all countries should share prosperity, bear responsibilities, and compete fairly. The vast majority of countries in the international community share the common desire for peace over war, justice over hegemony, and cooperation over confrontation. No country is destined to become the fish on the menu. Going against this historical trend is bound to be criticized and opposed by the international community.

 
 
 
 

Monday 25 December 2023

How Malaysia is finding its way out of the middle-income trap

It has taken the slow but steady route while addressing an ethnic incongruity


. Kuala Lumpur's new landmark, Merdeka 118, is a symbol of the country's growing affluence. (Nikkei montage/Source photos by Hiroki Endo and Reuters) 

Malaysian Prime Minister Anwar Ibrahim vows to focus on achieving faster growth.

KUALA LUMPUR -- Asia's megacities often undergo surprising metamorphoses in short amounts of time. Kuala Lumpur is one such example. When I visited the city in late October, I was amazed at how much it had modernized since I visited nine years ago.

Urban rail lines now crisscross the city, with new shopping malls sprouting everywhere. Particularly eye-catching was Merdeka 118, a 118-story skyscraper completed earlier this year. The 678-meter tower -- the world's second-tallest after the Burj Khalifa in Dubai -- is a symbol of the country's growing affluence. Its spire was designed to evoke the image of Tunku Abdul Rahman, Malaysia's first prime minister, raising his hand as he proclaimed national independence in 1957.

Malaysia over the past few years has experienced a rapid turnover of prime ministers, though the political situation seems to have stabilized. On Dec. 5, about a year after the launch of his government, Prime Minister Anwar Ibrahim stressed his intention to push for faster economic growth. "It's time to focus on developing the economy," he said in an interview with a local broadcaster.

Anwar's government in July unveiled its 10-year Madani Economy plan and the National Energy Transition Roadmap. These were followed in September by the midterm review of the 12th Malaysia Plan and the New Industrial Master Plan 2030. In October, Anwar's government launched its Hydrogen Economy and Technology Roadmap.

"It is not clear how these relate to one another," a Japanese businessperson said. Still, it seems clear that the government's main goal is to achieve annual growth of over 5.5%, a target specified in the Madani plan.

A view of Kuala Lumpur's skyline. Given Malaysia's relatively young population, domestic demand is expected to keep expanding. © Reuters 

Malaysia's gross domestic product grew 8.7% last year, the highest in 22 years, and growth for this year is estimated at 4%, despite the global slowdown. Given its relatively young population, domestic demand is expected to further expand. The country's semiconductor and other sectors are also attracting foreign direct investment as alternative supply chain bases amid mounting U.S.-China tensions.

The country's per capita gross national income was $11,780 in 2022. If the economy grows 5.5% per year and there is no sharp depreciation of the ringgit against the dollar, it could shed its middle-income status, as defined by the World Bank, in two or three years, joining the ranks of high-income nations.

Graduation has been a long time coming.

Malaysia became an upper-middle-income country in 1996, according to a working paper that Jesus Felipe, a professor at De La Salle University in the Philippines, wrote in 2012, when he was with the Asian Development Bank. Felipe reasons that upper-middle-income nations become ensnared in the middle-income trap if they are unable to move up for more than 15 years. Once trapped, countries suffer stagnant growth, sandwiched between technologically advanced developed nations and developing countries abundant in cheap labor. The description fits Malaysia's situation.

To see why Malaysia could not extricate itself from the trap for so long, one needs to look at its history.

Twelve years after the country gained its independence in 1957, a racial riot engulfed the capital. Malays accounted for nearly 70% of the population, but ethnic Chinese, who made up less than 30%, controlled the economy. The strain of this incongruity led to the clash, resulting in about 200 deaths.

To prevent a recurrence of the tragedy, the government began to address the economic disparity and in 1971 adopted a policy called Bumiputera (sons of the soil) -- a type of affirmative action for ethnic Malays. The policy treats Malays favorably in all aspects of life, including school admissions, employment and even stockholding.

The country's ethnic Chinese are traditionally considered to be strong in commerce and industrial activities. "If we recruit people by ability alone, many could be Chinese," an executive at a Japanese company said.

By trying to fix the racial imbalance artificially, Bumiputera is often cited as a source of inefficiency, but it has its merits.

"If the government had not provided elementary and secondary education to Malay villagers and helped them migrate to cities and find jobs in the commercial and industrial sectors, the country would have suffered a serious labor shortage in the early stage of economic development," said Satoru Kumagai, director of the economic geography studies group at the Institute of Developing Economies of the Japan External Trade Organization. It can be said that Bumiputera's goal is to strike an optimal balance between distribution and growth.

A shopping mall in Kuala Lumpur. Malaysia's Bumiputera policy has helped educate young Malay villagers and bring them to cities hungry for workers. (Photo by Toru Takahashi)

Mahathir Mohamad, who in 1981 became Malaysia's fourth prime minister, shifted the national focus to growth by adopting the Look East policy, which sought to emulate Japan's economic success. The country also began to actively attract more foreign capital. In 1991, Mahathir launched Vision 2020, the goal of which was to become a high-income country in 30 years.

"His greatest achievement was to set a goal of becoming a high-income country," said Abdul Razak Ahmad, founding director of Bait Al Amanah, a private think tank. He "thus changed the people's mindset, encouraging them to have a can-do attitude."

Malaysia enjoyed annual growth of nearly 10% for 10 years before the Asian financial crisis hit it hard in 1997. Afterward, its growth slowed to around 5% to 6%. Anwar, then the deputy prime minister and finance minister, clashed with Mahathir over how to cope with the crisis and was dismissed.

When Anwar this year announced the Madani plan, he said the country had been "caught in a vicious cycle of high costs, low wages, low profits and a lack of competitiveness" since the 1997 crisis. Anwar clearly sees the plan as a roadmap to push the country into the high-income category during his tenure -- something his old enemy could not achieve.

The reason for Malaysia's inability to pull itself out of the middle-income trap becomes clear when looking at the economic development of Taiwan and South Korea.

In terms of population, Taiwan and South Korea are not much different from Malaysia. Taiwan is home to 23 million, South Korea to 51 million and Malaysia to 33 million.

In 1981, when Mahathir became prime minister, the three were not far apart in per capita GDP. Taiwan's was at $2,691, South Korea's at $1,883 and Malaysia's at $1,920.

Taiwan became an upper-middle-income economy in 1986, followed by South Korea two years later, according to Felipe. Taiwan stepped up to high-income status in 1993, with South Korea following in 1995. It took just seven years for the two to move from upper-middle-income to high-income status.



Unlike Malaysia, they did not fall into the trap. Last year, Malaysia's per capita GDP was $12,465, far below Taiwan's $32,687 and South Korea's $32,418. Several factors were at play here.

First, Taiwan and South Korea do not have complex ethnic problems that cause them to pursue difficult socioeconomic policies. Second, the two had no choice but to industrialize as they are not blessed with natural resources like Malaysia, which is rich in petroleum, natural gas and palm oil.

Third, democratization in Taiwan and South Korea began shortly before the end of the Cold War in 1989, allowing them to catch the waves of globalization and information technology. Taiwan democratized in 1986 and South Korea in 1987.

Malaysia has held democratic elections since it gained independence, but the country was under a "developmental dictatorship" that prioritized economic development while restricting political freedom. Malaysians had to wait until 2018 for their government to hand power to another party for the first time.

Fourth, internationally competitive businesses like Taiwan Semiconductor Manufacturing Co., Hyundai Motor and Samsung Electronics have driven growth in Taiwan and South Korea. Malaysia, meanwhile, has failed to nurture such companies with an economy that instead has been led by government-affiliated entities. Its automobile, electrical and electronics industries have depended on foreign businesses.

Grab Holdings, whose ride-hailing superapp is now ubiquitous across Southeast Asia, was founded in Malaysia but quickly relocated its head office to Singapore to facilitate fund-raising and other benefits.

On the whole, Malaysia's lack of economic dynamism was to blame for its lower growth curve.

Still, it should be noted that Malaysia has avoided the so-called resource trap, in which the presence of abundant resources holds back a country's industrialization. Malaysia's leading exports are electrical and electronic products, which account for 40% of its total exports. It tops the U.S. and Japan in terms of exports of semiconductor-related products by value.

A worker inspects chips at Unisem's semiconductor packaging plant in Ipoh, Malaysia, in October 2021. It is becoming imperative for Malaysia to boost investments in higher value-added upstream industries. © Reuters 

This trap can be seen in Saudi Arabia, which in 2016 drafted its Vision 2030 strategy to reduce its dependence on natural resources. Malaysia achieved 40 years ago the industrialization Saudi Arabia is now pursuing.

Said Kumagai: "Malaysia is different from East Asia's elite economies like Japan, Taiwan and South Korea, and from countries with unique strengths such as Singapore, Hong Kong and oil-producing Gulf states. If it achieves high-income status, it will be the first 'normal' country to do so."

Still, challenges abound. In chip manufacturing, Vietnam and India are catching up fast, making it imperative for Malaysia to boost investments in higher value-added upstream industries. Given the accelerating trend toward carbon neutrality, demand for its fossil fuels will likely decline.

Yet, while balancing growth and stability, the multiethnic country with an average age of 30 has succeeded in making slow but steady progress toward overcoming the middle-income trap. Its industrial success will certainly serve as a beacon for other emerging and developing countries in the Global South.


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