The longest year

Consumers Association of Penang (CAP)
Third World Network (TWN)

In 2012, the all-consuming question has been, “who will lead Malaysia after its 13th general elections?” So much so that questions of substance as to what policies and principles will be in place and how and in which direction the country will be governed after the polls, have been downgraded. Fears of losing electoral and political support by instituting – or championing – drastic changes have prevented crucial questions from being addressed. Even reformist-minded politicians have not been able to articulate a different development trajectory and model than that of the incumbent government. However, a bright spot has emerged: a nascent ‘green’ movement steered by grassroots civil society leaders but empowered by tens of thousands of ordinary citizens who have not been cowed from rallying onto the streets of Malaysia to make their concerns known about the world they want.

A middle income trap or a haves vs. have-nots divide?

Since Najib Razak took over as Prime Minister in 2009, the main narrative of his New Economic Model (NEM) focuses on what are perceived to be the main problems facing the Malaysian economy: governance and efficiency issues of transparency, accountability and institutional streamlining on the one hand, and the purported need to escape the ‘middle income trap’ and to become a ‘high-income’ (pegged at a per capita income of RM 48,000) nation by 2020, on the other.[1]  Malaysia’s inadequate financial, technological and market infrastructure and human capital have been pinpointed as reasons why it cannot compete in economically higher-value-added products and services. Coming out of the purported middle income trap and towards a high-income goal is supposed to embody the latest stage of Malaysia’s development trajectory.

Malaysia was significantly affected by the economic crisis in the United States and the European Union due to its dependence on export markets. In 2009, the Malaysian economy contracted 6.2% in the first quarter. The average annual GDP growth rate over that decade was 4.6%. Some quarters estimate that growth rates in 2013 will settle between 4.5% to 5.5%, while others have projected a lower 3.5%. Such figures compare poorly to the boom years of the last decades of the 20th century when Malaysia recorded growth of up to 8% yearly.[2]

The Malaysian government acted significantly later than several other governments on the financial crisis even when it hit its shores in 2008. When it did, it received criticism for acting too little too late. The first stimulus package was a mere US$2 billion. It was only in March 2009 that a second and bigger stimulus package (US$17 billion) was announced for distribution over the next two years to stave off a serious recession. The plan was to allocate money for fiscal injection, guarantee funds and other assistance for industry, equity investments and tax incentives.[3]

But while the four main goals of the package were purportedly to protect and create jobs, ease the burden of the crisis on the population, assist the private sector and build capacity for the future, critics of the stimulus plan not only cited the lack of transparency, but also the apparent use of the allocation to bail out the government’s business cronies while little was seen in the way of alleviating the impact of the crisis on lower-income earners. Almost half of the stimulus would have gone to the private sector; only 17% towards easing the burden of the ordinary people. A mere 1.4% was allocated for the less-fortunate.[4]

‘People First, Performance Now’?

According to government data, Malaysia is said to be on the way towards achieving all eight Millennium Development Goals (MDGs); commitment is reflected in the Tenth Malaysia Plan (2011-2015). But Malaysia’s development trajectory has hitherto primarily been driven by a combination of low worker wages amidst high revenues for petroleum, palm oil and rubber commodities and foreign direct investment in the manufacturing sector.[5] In other words, very little of the profits in the form of oil royalties, for example, have gone towards developing the states that produce a large bulk of the oil, such as Kelantan, Terengganu, Sabah and Sarawak, but which happen also to be the poorest states in Malaysia. And while the government announced its motto to be “People First, Performance Now” and its goals to (i) reduce crime; (ii) fight corruption; (iii) improve student outcomes; (iv) raise living standards of low-income households; (v) improving rural basic infrastructure; and (vi) improve urban public transport, it appears that while lip-service has been paid, little pertaining to the structural and systemic inequities, inequalities and injustices of the political or social economy have been dealt with or addressed with any substance.

Most Malaysians, in fact, would argue that being ‘trapped’ with a ‘middle income’ is a luxury they have not known: Malaysians on average earned less than RM2,400 per month in 2011. That year, 12,684,000 brought home an income of less than RM3,000 monthly.[6] When the government in 2012 distributed RM500 as aid to families that earned a total of less than RM3,000 per month, four million households qualifed for this aid.[7] Although Malaysia has narrowed the rural-urban poverty gap, the rural poor in 2009 still accounted for two-thirds of poor households. The Gini coefficient for 2009 was 0.441, little different from the previous 20 years. Malaysia has, in fact, the highest inequality in Southeast Asia.[8] The Tenth Malaysia Plan admits that there are 2.4 million vulnerable households which make up the bottom 40% of the population.[9]

The government touts the decrease in poverty rates from 16% in 1990 to 3.8 % in 2009,[10] but its definition of ‘poverty’ has been based on a minimum World Bank standard of US$2 per capita per day, which does not address such factors as the different cost of living in urban and rural areas nor inflation.[11] Instead of ‘absolute’ poverty, many NGOs have called for the use of ‘relative’ poverty which considers poverty to consist of earning less than 50% of the monthly household median income; if so, significantly higher figures would be obtained: since the national household median income is RM2,841 a month, the poverty line would be set at RM1,500 per household, moving 21.6% of total households in Malaysia under that threshold.[12]

Most young Malaysians (aged 7 to 12) receive a full primary education. Enrolment increased from 2.9 million students in 2005 to 3 million in 2010 against an estimated 2.5% decline in the birth rate. But while such progress is often highlighted in official reports, it is less publicised that 30% of 9,806 schools were allegedly without water or electricity.[13] In terms of gender equality and empowerment, the UNDP ranked Malaysia in 2011 43rd out of 145 countries because of poor showing in labour force participation (46.1% in 2010 for women, compared with 78.7% for men) and underrepresentation in decision-making bodies such as Parliament (14%), state legislative assemblies (8.2%) and in senior management positions in the private sector. Women-led urban households were found to have a much higher probability of being poor than those led by men.[14]

The Green Movement comes of age

Perhaps the most surprising development given the general apathy among most citizens to ‘environmental’ issues was the rise in 2012 of Malaysia’s own Green Movement, one that captured enough imagination, attention and commitment to have attracted tens of thousands to rally in support of a variety of environmental concerns. As IPS in a July 2012 report asked, how did this happen in a country where the green struggle was, until last year, very much in its infancy?

The Ministry of Natural Resources and Environment has not been indifferent or inactive. They have, in fact, given priority to biodiversity and climate change issues, and have introduced numerous policies, laws and regulations aimed at mainstreaming environment into national development planning. Climate-resilient growth strategies have been included in the Tenth Malaysia Plan for the nation as a whole. Rules, regulations and policies notwithstanding, however, serious problems have plagued Malaysia’s environmental track record. In addition to the need to plug loopholes in old laws, many new issues have arisen that highlight the need to review the laws; there have been problems in their implementation, enforcement and coherence; and an appropriate and comprehensive legislative framework is missing. Among institutions involved in environmental conservation and management, there is limited capacity to carry out coordination, monitoring and evaluation, insufficient technical capacities, inadequate science-policy interface and inadequate financing. Malaysia’s unique division of powers between the federal government and the states with respect to natural resource management and land ownership – affecting the National Biodiversity Policy, the National Forestry Policy and the National Land Policy – have also resulted in implementation problems.[15]

But while activism against logging, oil palm plantations and pollution and unsustainable exploitation of water and other resources had in the past intermittently received civil society backing, 2012 saw an unprecedented upsurge of citizens rallying in unseen-before numbers and the formation of a grassroots-based green movement that challenged the government’s development and policy-making system. Five issues, in particular, served as rallying points:

Nuclear plans: The government had in December 2010 announced plans to build two nuclear power plants to meet rising energy demand, by 2021/2022. A civil society campaign was launched to press the government into abandoning these plans out of concerns that they would be disastrous for public health, safety and the environment in Malaysia. Very recently, it was announced that the nuclear power plans would be delayed due to the negative press that the nuclear industry has received following Japan's atomic disaster in 2011, along with domestic anger at the controversial Lynas rare earth plant (discussed below).[16]

Mega-dams in Sarawak: Indigenous communities and activists have for years struggled against moves by the state and federal governments to build mammoth hydroelectric projects that posed immense environmental, economic and social issues.[17] A plan is underway to build 12 mega-dams under the Sarawak Corridor of Renewable Energy (SCORE) and thereby turn Sarawak into a “developed state” by 2020. Among the dams planned is the 944MW Murum Dam, which would resettle 1,400 people from the Penan and Kenyah communities. The 1,000MW Baram Dam, meanwhile, is slated to displace some 20,000 indigenous peoples and submerge 412km2 of forests. Critics have questioned the plan’s viability[18] and attacked it for the loss of native customary land, homes, livelihoods and natural biodiversity that it would cause.

Indigenous and activist groups set up blockades to prevent workers from reaching the sites of the dams; a Save Sarawak Rivers Network (Save Rivers) was set up in February 2012 to oppose the dams; foreign companies involved[19] were targeted; and considerable efforts were made to inform and mobilise people against the plan, such as through Radio Free Sarawak.[20]

Raub gold-mining: In the middle of the last decade, it was discovered that operations by a gold-mining company in Raub in Pahang did not comply with international standards and could cause long-term harm to local residents and the environment. The facility, only 200-300 meters away from the nearest village, used the 'carbon-in-leach' method and consumed 400 tonnes of sodium cyanide a year. Booklets to raise awareness were printed by local residents. In October 2011, Raub residents and activists participated in the massive Himpunan Hijau (Green Assembly) in Kuantan.[21]

Pengerang Integrated Petroleum Complex: An ambitious project to develop this complex in Johor has run afoul of the many fishing villages making up a significant proportion of the population. Critics argue that the plant will cause large-scale social and economic dislocation. It is expected that about 600 families from seven villages would have to be relocated without adequate compensation. In addition, there have also been questions related to public health concerns and the demands placed on land, water, energy resources and loss of livelihood. Local NGOs were consequently formed, memorandums were submitted and several protests were organised in 2012, including one on 30 September that saw more than 3,000 protesters against the project.[22]

Lynas rare earth refinery: One large group of people assembled at the first Himpunan Hijau gathering were residents of Gebeng in Pahang and activists opposed to a controversial rare earth refinery operated by Australian company Lynas. Rare earth minerals are often found in ores which contain small amounts of radioactive elements such as uranium and thorium, so extracting them raises a number of health and safety issues.[23] A second Himpunan Hijau focusing on the Lynas issue saw an even more impressive number – 15,000 people – gathering to express their opposition to the plant. That gathering’s thunder was topped six months later when about 20,000 ‘green shirts’ joined a mammoth rally for electoral reform.[24]

Free trade agreements a serious threat

Looking at the aggregate data, Malaysia is on track to achieve most of the MDGs by 2015. But when the achievements are disaggregated and examined more closely, it is apparent that much more needs to be done. In addition, a serious problem has arisen in the regional and international arena that poses a risk to all efforts at improving the socio-economic welfare and future of all Malaysians.

The U.S.-led Trans-Pacific Partnership Agreement (TPPA), which Malaysia is negotiating with eleven other countries, as well as the proposed European Union-Malaysia free trade agreement (FTA) pose a larger spectre of corporate-driven liberalisation than previously seen or attempted. These agreements threaten great risks and irreversible changes to the fabric of Malaysian public life by putting in place legally-binding mechanisms to tip the balance of policies, laws and regulations in favour of the protection of corporate interests. Slated to be signed at the end of 2013, growing intensive public protests, especially against the TPPA, have led to delays in the conclusion of these agreements.

The TPPA, in particular, would not only do away with nearly all tariffs among TPPA countries, but would also commit their governments to reforms and protections for foreign investors, such as enhanced safeguards for intellectual property (IP) holders which will impact on agriculture, technology-related industries, health,[25] education,[26] etc., freedom to carry out profit-making operations with minimal restrictions which raise environmental concerns,[27] and limitations on state-owned enterprises, with implications for government-linked companies with socio-economic prerogatives.[28] In addition, the TPPA’s investor-to-state dispute settlement (ISDS) mechanism would allow private foreign corporations to sue governments in international arbitration tribunals for any act, policy or law – including those put in place to protect the environment or public health – that the corporations argue have “expropriated”, or threaten to expropriate, their investments, profits and even expected profits.[29] This can happen due to the typically broad definition of “investment” contained in such agreements. Signing the TPPA and EU-Malaysia FTA, would therefore pose a tremendous challenge and threatens to undo government actions to address social, economic and environmental issues.

The historic scale of the green movement has demonstrated that environmental issues, among other public interest concerns, can no longer be dismissed by invoking ‘Malaysia’s development’ aspirations as trumping over socio-economic, political and civic rights. The government must address them straight on as a systemic problem of lack of transparency, and disregard for people's rights and the environment.

Yet, the overall tenure of Malaysian public life and the actions of its leaders suggest most have been so engrossed with partisan politics that questions and issues of what and how – as opposed to merely who – have been set aside. It remains to be seen whether the changes promised by leaders on both sides of the political divide will meet the hopes and aspirations of ordinary Malaysians, and whether real changes to the socio-economic and political-economic fabric of the country will take place for the betterment of its people to attain the future they want.

Notes:

[1] On 1 December 2009, Minister of Finance II Ahmad Husni Hanadzlah said in a speech at the “National Economic Outlook Conference 2010-2011” that among the top economic concerns in Malaysia were the state of education, corruption, government over-reach in economic affairs, public institutions, the brain-drain, and low domestic investments. See also Wong Chun Wai, “From the Heart and Refreshing”, The Sunday Star, 13 December, 2009.

[2] United Nations Development Program (UNDP), Country Programme for Malaysia, 2013-2015, 27 July 2012.

[3] Social Watch, Country Report: Malaysia, 2012.

[4] Social Watch, Country Report: Malaysia,  2009.

[5] UNDP Country Programme for Malaysia, 2013-2015.

[6]  It was RM1,916 in 2009. See Prime Minister Najib Abdul Razak’s 2012 Budget Speech Introducing the Supply Bill (2012), 7 October 2011; Prime Minister’s Department, Economic Transformation Program: A Roadmap for Malaysia, October 2010; Malay Economic Action Council, “The Bumiputera Transformation Roadmap: The Hopes of the Bumiputera,” 24 November, 2011.

[8] Yusuf Bangura, Combating Poverty and Inequality: Structural Change, Social Policy and Politics, (Geneva: United Nations Research Institute for Social Development, 2010), p 93.

[9] UNDP Country Programme for Malaysia, 2013-2015.

[10]  “No poverty in Malaysia by 2015,” The New Straits Times, 3 November, 2012.

[11] UNDP, The Millennium Goals at 2010: Malaysia, 2011; Elizabeth Gimbad, ”Rethinking poverty in Sabah,“ Malaysian Insider, December 13, 2012, http://www.themalaysianinsider.com/sideviews/article/rethinking-poverty-....

[12] G Vinod, ‘Review unrealistic poverty benchmark’, 22 August, Free Malaysia Today, http://www.freemalaysiatoday.com/category/nation/2012/08/22/review unrealistic poverty benchmark/

[13] AFP report, 6 June, 2008.

[14] UNDP Country Programme for Malaysia, 2013-2015.

[15] UNDP Country Programme for Malaysia, 2013-2015.

[16] AFP/xqEnvironment, Malaysia nuclear plan delayed, 15 January 2013.

[17] The most controversial was the 2,400MW Bakun Dam where 695 km2 (equivalent to the size of Singapore) was to be flooded. Critics pointed out that in both East Malaysia and Peninsular Malaysia there is an over-supply of electricity, which made the hydroelectric project unnecessary. After two failed starts, the privatisation of the project to a logging company with no experience in dam construction, two postponed completion targets, eventual takeover by the government with “compensation” to the logging company, which had completed only 50% of the engineering work, the flooding process was initiated on 13 October, 2010. Vast tropical rainforests and its biodiversity, as well as 15 indigenous communities, suffered as a result. There was much discontent among the local population, along with unresolved compensation claims, loss of livelihood and other social problems.

[20] Gan Pei Ling, “Environmental “hot potatoes” in 2013,” The Nut Graph, 28 January 2013, available at http://www.thenutgraph.com/environmental-hot-potatoes-in-2013/

[22] Thomas Fann, “10 big questions about Pengerang,” Harakah Daily, 25 September 2012; Debra Chong, “Questions over New Year deaths of Pengerang family, 2 January, 2013, http://www.themalaysianinsider.com/litee/malaysia/article/questions-over-new-year-deaths-of-pengerang-family/.

[25] Medecins Sans Frontieres, “Trading Away Health: How the U.S.’s Intellectual Property Demands for the Trans-Pacific Partnership Agreement Threaten Access to Medicines,” MSF Access Campaign Issue Brief, July 2012.

[26] E.g. International Federation of Library Associations and Institutions statement on the TPP on 4 July, 2012, and statement by the Library Information Association of New Zealand Aotearoa on 5 July, 2012.

[27] See  http://www.citizenstrade.org/ctc/wp-content/uploads/2012/03/TransPacificEnvironment.pdf

[28] E.g. Jane Kelsey, Investment Developments in the Trans-Pacific Partnership Agreement, Investment Treaty News, January 12, 2012.

[29] Martin Khor, “Global Trends: Investment treaties come under fire,” The Star, 19 November, 2012.

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