OVERVIEW
The
innovation and creativity is the essence of survival in this century and will
become the matter of life and dead of the nation especially Malaysia and
Thailand if the natural resources and raw material has been depleted or substituted.
The dependency of technology between the core and the developing state can be
seen as the big clog that arrest the birth national talent and innovation to
achieve knowledge base economy that potentially shift the regional to the next
stage. University should be the heart or the engine that could accelerate the
birth of the new “Einstein” of the east. However, many years have gone and
university not very successful in producing the inventors, and to make things
worst most of the University is producing the “consumer” and “workers” that
trap in the game of Core-periphery. There are a few reason on why the creation
of new investors and innovators cannot cope with developed nation. 1) Core
Dependency of Malaysia and Thailand in Technology
and innovation, (2) The barriers of
Political economy in Malaysia and Thailand) 3) The Triple Helix as tools to
Enhanced the knowledge based society.
Introduction
Mahathir
once mention that we as the developing
country are comfortable to become the consumer of whatever product that are
coming from the west. The developing country like Malaysia and Thailand
especially had become the loyal customer of western product and even in the
smallest and simple things like mineral water and beef. Some of the item that
we are using is actually we can made it by ourselves. Is Malaysian people are
lazy that we import even the simplest thing that we might can produce by our
self? There are a series of attempt that made by state to ensure that this
phenomena of dependency toward western product seems to be not going to the
right direction and in fact, it burden more to the citizens itself. For example
as we all know that the effort of government to create our own car like Proton
is example of result to the heavy taxation toward imported car in Malaysia.
Approximately each Malaysian has to pay double of what other consumer in other
countries to have our own car. The policy of government to protect Proton for
14 years and it seems to sustained for quite a long time in the future. This is
due to the technology and quality of the Proton car cannot compete with other
car producer such as Toyota, Nissan, Ford and others. In ensure the company or
industry survive, government have to do something.
However, on the other side it affects the
people. Therefore we can see that the dilemma that we are facing is that, if we become consumer, we are
dependent of the western product forever and trap in the core dependencies
game. If we initiate the industry in the technology or advancement, we trap in
the protection policy that burden the people. Is there any way to get out of
this class struggle?
1.0 Core Dependency of Malaysia and
Thailand in Knowledge and Technology.
As
developing country such as Malaysia and Thailand we cannot escape from the core
dependency trap that known as The World System Theory that in Immanuel Wallerstein
understanding on capitalism and how the core treat the periphery. In this
theory, the developed the understanding of Marxist capitalism idea into the
monopoly capitalism where its created the two-tier structure and the developed country dominated and
exploiting the less developed periphery.
Wallenstein proposed the notion of cyclical rhythm that mention the tendency of
the capitalist periods and their expansion will go through the recurrent period.
It is not easy to change the structure of the core periphery. In other words, Wallenstein
says that we as developing country will become the consumer and periphery
forever and ever. (Wallerstein Cited By Stephen
Hobden & Richard Wyn Jones pg. 244-256) .However this idea not goes without
critics. Some of the famous critics is Andre Gunder Frank, he mention that
actually the World System Theory had already begin thousand years ago actually not started in Europe. He describe that hoe
the core and periphery change from Mesapotamia where the raw materials and
knowledge came from Anatolia, Iran and Egypt. The centre of the world are
changing from Indus in certain period and its located between Central Asia and
southwestern Asia. When the Indus faded away and the decline of Harappan cities, it links with Mediteranean Italy, Central
Europe and Nubia to the South of Egypt become stronger.(Andre Gunder Frank pp.5)
. Western countries was a periphery of Asia in the early time. Frank argues
that the origin of the core is Middle East and Asia. However the advance of
civilization of Europe with knowledge that make this shift happen. Therefore we
can make assumption that the relation of core periphery relations is actually
not that stagnant. But it is dynamic and can be change? Whatever it is, it is not an easy task.
David Ricardo is equal to eternal
dependency
Sepcialization
theory of David Ricardo Theory will only lead the developing country depend on
the core forever.The situation that a countries like Malaysia and Thailand
facing right now can be describe from what Samir Amin (1973) has describe as the monopoly of capitalism in
every aspect of less developed life. He puts in that the process of
specialization of production of state led to the dependencies of state towards
developed nation. This is because they are some product that are more valuable
than others .It is also some product that are more profit to trade compare to
other production. (Samir Amin pp.133-136). For example, a cost of time to produce grain
is 500 hour, and the cost of time to produce flour is about an hour. The countries that are specialize in
producing flour have more advantages. Despite of have an opportunity to save
time, they also have change to sale the flour to the producer of the grain.
Usually, the one that producing less technology is less developed country and,
developed country will be producing more complex and added value item. The one
that have knowledge have this advantage. As most of us concern, we are actually buying back the item that originally the raw
materials comes from our own land. This is what being mention by Samir Amin as
five biggest monopoly sector by the Captalist which is ; ( 1) The monopoly of technology, supported
by military expenditures of the dominant nations. (2) the monopoly of control
over global finances and a strong position in the hierarchy of current account
balances. (3) the monopoly of access to natural resources.(4) the monopoly over
international communication and the media.(5) the monopoly of the military
means of mass destruction.
Therefore, as what being mention by Mahathir, a
resistance to change what we are producing, what he called as “mind set” , will
led our way become the consumer of developed country forever. Syed Farid Alatas
(2003) have accumulated all of the literature of social science that mentions
the problem of dependency of the west for the last 50 years that keeping the
Third World left behind. He cited various problem form various scholar such as
critique of colonialism (Cessaire,1955 ;Memmi 1957), academic imperialism
(Alatas,S.H.,1969, 2000) , decolonization (of knowledge) (Fanon, 1961),
critical pedagogy (Freire ,1970), imitation and captive mind
(Alatas,S.H.1972,1974), deschooling (Illich , 1973), academic dependency
(Altbach , 1977; Garreau, 1985; Altas, S.F.,1999,2000a), Orientalism
(Said,1979,1993) and Eurocentrism (Amin, 1979; Wallerstein ,1996). (Syed Farid
Alatas .2003.pp.599 ). All of these
concepts were related to the concept of core dependency theory and how we are
become peripherilizing by the west in this context United States, Britain and
France that once colonized us.
Sometimes
in my opinion we forget to look at ourselves. The reason Asian developing
region does not prosper actually not merely on the western capitalism or because
of the core capitalism.People sometimes put to much hope for the state to
handle the business and enshrined innovative capability. However, the law of
nature that might considered as half true is that, State cannot involve in
business. If this law is break, the illness of nation such as nepotism,
cronyism, patronage, rent seeking will prosper and become the poison to the
innovation of the nation. It is partly because of our own actions that
keep as behind the core. As what Gordon Tullock put in, one of the pioneers of
the public choice economy, suggested that the rent seeking “is one of the basic
reason for Asia’s backwardness. Asian Countries have been doing this for a very
long time. (Tullock 1980 :25 cited by Richard F.Donner and Ansil Ramsay 2000:145).
This is also true as
what the famous singer Maher Zain, in
his song title Awaken, inspired by the Egypt revolution, he mentions that “yes
it easy to blame everything is on the west, when in fact all the focus should be on
ourselves”.
2.0
What is the obstacle in realizing the knowledge based society in Malaysia and
Thailand?
Brain Drain
One of the major problem haunting
especially of developing country like Malaysia and Thailand is the phenomena of
brain drain. For example in Malaysia, since 1957 there are more than two millions
some of our best brain has flew or migrated to other countries because the
unsatisfaction of compensation and underemployment that they receive. World
bank have reported that Malaysia are the top nine country that are facing this problem after Ethiopia, Nigeria, Kenya,South Africa, Iran,
China, Mexico, Jamaica and Malaysia. The brain drain phenomena in Malaysia are
steadily getting worse and will intensify in the next few years. Currently,
there are two out of every ten Malaysians with higher education refuse to work
in Malaysia and prefer another country and about 305,000 of them in 2009. Some
of the factors that contribute to this illness are job opportunities, political
corruption and lack of religious freedom. (Fintan Ng,P.Gunasegaram in The star
Online, 30 April 2011) .
Some of the middle class find out
that the income they wanted is not as good as they can get abroad. The dependencies towards the core let
us poorer. As being put by Mitchell A. Seligson (2008) “the richer get richer
but the poorer get poorer”. She mentions that income gap between the poor and
rich are wider .Most of us believed that the underdeveloped is only a process
of becoming developed country. However according to the data that she finds out
cited from W.W Rostow, for example, average per capita income (in
1980 US Dollar) of low income countries was $ 164, whereas the per capita
income of the industrialized countries average $3,841. The gaps is $ 3,677.
After thirty years income of the poor country has arise to $245 but the income
of industrialized country had increase to $ 9,648.
In United States for example, peoples only need to pay for
approximately 4 years of their life time saving to buy a house. Compare with Malaysian,
we have to pay off the loan for about 28
years. Same goes to automobile. We are paying double of what United State have
paid to buy the car. Without much of us might notice actually because of this
dependency, the facts show that the national income of the developed countries
increase. To make things worst according to Fund For Peace, Malaysia is ranked
as 112 of warning failed state and Thailand is 100 out 177. On other word, we
might be able to interpret that we are half way there. We are selling the raw
materials to developed nation, and they
sale it back to us as added value item and we pay hundreds of times of the
price of what we sold to them before. We might notice all of these consequences
all along. However, it is a phenomenon that seems hard to be change. Do we have
a chance to closer the gap? According to John Passe’ Smith, taking example of
developing country, he puts in
even for Pakistan , it would take
152 million people and 1,152 years to close the gap. He also took example even
though for a “miracle countries” like China, it would take them 64 years to
close the gap within the current situation.( John Passe’ Smith ,pp.11) .
Malaysia
Dilemma in Ali-Baba Capitalism
Malaysia
has its own unique way in managing economic security and prosperity among
multiracial society that emerges after her independent in 1957. The effect
coloniliazation in the implementation or
“Divide and Rule” cause government to apply and affirmative action to help the
indigenous or Bumiputera in order to ensure their survival in Malaysia. New
Economic Policy (NEP) are use as a tool to restructure the society and to avoid
economic identification on the races basis.
There are some controversial act are implemented like Industrial
Coordination Act (ICA) are protested by Chinese Malaysia. In the year of 1947
government has passed the Oil development Act and that can control others oil
foreign companies under the control of PETRONAS. This act was also protested by
many foreign oil companies because it reduces their corporate benefit (Gomez and Jomo K.S 1997.41-42).
According to Jomo is his other writing mention that huge multinational company
like PETRONAS have a great reputation in international credit rating in 1980s.
However because of state intervention, Petronas has been
forced by federal government executive to support the property development of
the states. Some of the gigantic projects are overpriced Dayabumi projects in
mid 1980s and the Kuala Lumpur City Centre (KLCC) as the tallest twin tower in
the world. Beside projects, PETRONAS also been used to financially rescue Bank
Bumiputra twice in the 1980s and 1990s. (Jomo K.S & E.T Gomez.2000.p.280) .
However we can see how the state backup company or state capitalism now failed
to maintain the well run of the company their because of government
intervention that might open space for corruption or what mention by Jomo
remind as rent seeking or in other words Alibaba Capitalism. Ali baba
capitalism as usually existed when the government gave right to the Malays or
the son of the soil to have a special privileges in doing business, includes
licensing, easy loan and subsidizes to help the them in the name of eradication of poverty and restructure of society.
This effort seems to gradually increase after the May 1969 in
order transformed the class of Malay Bumiputera from the activities of
peasantry to middle class. In the issues of logging, the authorities actually
did not strictly enforce the taxes on the real cost of logging from the
company. He added that as the federal and state government is below what it
suppose to be ,they will raised the tax but this will led to further tax
evasion by the company. The inefficient of system discover by Jomo and Gomez
really effect the charisma and credibility of a state as economic decision
maker because the mistake affect nation in long term period. Therefore we can
see that how state runs a bad business in achieving national agenda. The
“unique” agendas are not to have maximizes profit but for political (unity,
restructuring society and many more) and sometimes for the sake of group
interest. State sometimes inconsistence of providing economic development
because of the constraint that had been discussed. States roles are to govern
and to protect the interest of its people. State roles are not for making
businesses.
Furthermore, by allowing state to involve in the business of
innovation and creativity, it is not possible that the “baggage” of Alibaba
Capitalism still will bring. Just taking example of how governments have to
deal with the ASEAN Free Trade Agreement. Governments still have to protect
Proton as the GLC because it affects national interest as Malaysia definition.
(Charles W.L.Hill.2010.pp.286)
Chinese Capitalism
Success
Despite the failure of State capitalism, the private
capitalism that are run by mostly Chinese achieved great success. Most of the
successful business in south East Asia is Chinese. Determining who is Chinese
are one question that need to be go deeper because there are Chinese that was
born in their country and have a status as a residence. Malaysia Forbes has
discovered much of the Billionaire in Malaysia is Chinese, and most probably
does not benefitted in affirmative action made by the government. Ironically,
without the special aid from government Chinese private capitalist success and but,
with help of government Bumiputera capitalism does not shine. For example the
between ten top richest man in Malaysia, eight of the person are Chinese
ethnics. Namely , Robert Kuok with worth
of USD 9 billion with multi business ,
Lee Shin Cheng Property worth USD 3.2 bill invested in palm oil, Lee Kim
Hua property worth USD 2.5 billion in
business of Gaming, 80, Teh Hong Piow USD 2.4 billion, in Banking, Quek Leng Chan
USD 2.3 billion invested in many sectors ,Yeoh Tiong Lay USD 1.8 billion, also
have diversified business, Tiong Hiew
King USD 1 billion, business in timber , and the last Vincent Tan property
worth USD 750 million, invested in
diversified capital. Many of this private capitalism successfully maintain
their wealth and property without major government intervention or government
aid. In this battle private capitalism won against state capitalist.
Thailand
with The Dilemma Of “Royal Capitalism”
Thailand is facing
quite the same unique condition on deciding how to manage their money
internally. According to Mauro cited by Richard and F. Doner recent empirical
studies find corruption and rent seeking to be extremely widespread in Thailand
(Richard & Ansil.2000.p.146) . This part will examine how success Thaksin
Shinawatra regenerate economic growth which is in serious corruption and
stagnant to the stage where the country successfully increase the GDP and
create a hundred thousand of job for the people, but in the end, the administration had been
toppled by the “voice of democracy” in the conspiracy involve to “Royal
Capitalism” and Military Institution that clearly have their own interest. This
becomes one of the major constraints on why states like Thailand are incapable
to involve in building knowledge based economic society and with innovation.
According to the report by Nicholas Farelly , extracted from the book “Who
Wants to be a Trillionaire?” written by Stephen Simpson, he wrote that ,current
Thai King (Bhumipol Adulyadej) have reported to have at least $30 billion USD
net worth in the royal investment in Thai business such as Siam Cement,
Christiani & Nielsen and Shin corps. He did mention that the possibility
that the Bhumipol not might not able to reach
$1 trillion in his life (due to his age which is 89 years old) however,
their heir (most probably 59-years old Prince Vajiralongkom) could
eventually reach that point (Stephen Simpson,2011).
Another report by Forbes also admit the same where
King Bumiphol is one of the richest king that are defeat the wealth of Sultan
Haji Hassanal Bolkiah the oil-rich Brunei that before was on the top of the
list. Some of the people mention that the monarch wealth is to help the people,
which is many other people doubts, the country that already have 27 Prime
Minister struggle to have a transparent and free corruption economic
development. Even thought Thaksin have involve in may “political crisis” ,in my
opinion the strongest reason of Coup de Tat in Thailand was because the
dissatisfaction of how the government would reduces the power of “royal”
capitalism and military institution in the effort of Thaksin to promote
democracy. Thaksin are to popular and with the winning of general election in
2005 and 2006 where the first time one party rule become a government it
because of this according to junta gave reason to coup that Thaksin had “caused
an unprecedented rift in society” which mean that extension of the gap between
the middle class and rural base are seriously in jeopardy.(Pasuk.P &
Baker.C.2008.p.62) That is how Military and Royal Justify the act of the
undemocratic coup. Even though they are strong empirical proves that Thaksin
have “privatize” Thailand and turn the country into rapid development growth.
In Thailand Royal are the most powerful institution and whatever effort of the
Prime Minister must have the “ratification” of the king. In Thailand, king is
like god or demi-god to the people. For the people Thailand, Kings are beyond
politics. Whoever insult the king is a serious offence and will be charge. Just
like happen to Darunee
Charnchoengsilpakul the red shirt and pro Thaksin
supporters. She has been sentence 18 years in prison for insulting the monarchy
. ( Dailymail,28th August,2009)
In my perception, King
in Thailand is nothing more than “Royal
Capitalism” that manipulate military institution to confront “Thaksin
Corporation”. Even though Thaksin is
implementing the poor pro policies but some people argue that he is
authoritarian because of his populism. Some people also mention that because of him,the democracy of Thailand have
less quality. Just like written by Michael K.Connors in his paper saying that,
Royal Thai is actually the Royal Liberalism that to ensure the democracy are in
place and it is their responsibility to support the people coup.
(M.K.Connors.2008.143-165). However we can see that, Thailand had been coup for
about 19 times and somehow that become the standard democracy of the region and
yet in Democrat party , Seni Pramoj said that “ The constitutional monarchy
offers us an effective tool in defense again dictatorship “ . So
long as the supreme powers remains with the monarch...there will not be a
desire among politicians to become a dictator” (cited by Kobkua, 1996 in
M.K Connors.2008.145).
Thailand also have
their unique character that justify states are not capable for it to involve in
Business and a matters of creating competition and innovation in business because
of the constraint of the “Royal” Capitalism. If government of the states like
Thailand involve in business involving industrial that demand knowledge based
economy, the “Royal” Capitalism might interrupt to ensure their dominant and to
protect their own industries and wealth.
3.0
Solution to core dependency and political economy challenge Malaysia and
Thailand: The Triple Helix Solution.
Core dependencies and domestic
political economy problem is some of the biggest obstacle that we have to face.
Furthermore added with the incapability of states of handling business, in what
way we should go? Do we need to create
more Proton to ensure that we are not
depending to the core countries?
In my opinion, the key on opening
the door to close the gap between the developing country and developed country
is the “Triple Helixing” of the industrial-government-university in Malaysia
and Thailand. Triple Helix is a concept that are long time discuss and it is a
model of a knowledge based regional development incorporated between three
important element which is University, State and Industry.
The Triple Helix will be more
effective if it is combined with the classical ideology of economic liberalism that
tells governments to “hands off” of the business. Adam Smith was write the
importance of competition that regulates economic activities and will benefit
the customer. The entrepreneurs or the enterprise will make themselves as
attractive as possible in order for them to survive, or else they will
shutdown. The classical liberal understanding of economy is a good way to
disciplines the industry. State intervention will only disturb the free market.
Henry Etzkowitz (2002) mention the
importance of cooperation and synchronization of University –Industry
–Government relation is in the process of knowledge capitalizations. The first
transformation that important according to him is ; the
transformation of each helix element such as the development of lateral ties
through mechanism such as strategic alliance or an assumption of an economic
development mission by university. (Henry Etzkowitz 2002 pp.2). According
to WTO regulation that state is forbidden from making its own company and they
must encouraged the free market. The problem of lack of innovation and
technology product lies between this three elements of relation. The innovation
is increasingly came from outside industrial and firm and sometimes from other institutional
such as University that have focus on this task. Innovation can come from
anywhere and across boundaries disregard which areas it is. The typical model
of State industrial and academia picture by Henry taking example of developing
country can be exemplifies in the Figure 1. It shows that States are
Predominant between these three element.
Figure
1
.
In this model States control the
relationship on industry with it regulatory, tax and other mechanism which
clearly unfavoured by the business. Because of the relation control by the
state, the industries are discourage to compete and might somehow affect the
innovation capabilities. University that suppose to provide this knowledge
might find their discovery are less useful and the findings hard to be utilizes
in optimum way. The model of Triple
Helix that state should apply with a little bit of modification of neo liberal
approach might look like the
Figure 2.
The implementation of this model
will ensure that government must enhance privatization of its state owned
company and abolish the Ali-baba capitalism policy in case of Malaysia and Royal
Capitalism policy in Thailand. The relationship between State Business which involves
state owned or state cronyism is forbidden. However the industrial and business
sector can contribute to the government to in the form of taxes and other legal
ways such as exercising Corporate Social Responsibility. State is responsible
to invest in the University to made research and the outcome of it can be used
by state itself or industrial sector to promote innovation and technology.
Some of the successful project that
apparently is an effort of Sweden government is called VINNOVA. The function of
the institutions is to promote the innovation and technology among researcher
and companies. It is a place where all research and innovation gather and
companies, industrial and government can access and utilizes it. The
institution as being mention by Charlotte Brogen the Director General of VINNOVA,
Swedish Governmental Agency for Innovation Systems, is a place where responsible for innovation and sustainable growth of Sweden
and she hope VINNOVA become the interest to innovation actors around the world.
Some of the interesting innovation that found out in their free e magazine
describe on how the future boats imitates dolphin Flipper that expected to
reduce noise and faster that ordinary boat. The Dolprop Industries that made it
research grand under VINNOVA are expected to launch its first product to the
market at 2012. ( VINNOVA Cutting Edge pp.2).Henry Etzkowitz and Magnus
Klofsten (2005) have develop a wide
range of strategy and method in creating the dimension of learning towards the
Innovating region by introducing a model that for a developing country can
follow. Other scholars that related to this study is Loet Leydesdorff (2001) by discussing further of the complex and
dynamic of innovation and cultural evolution.
Pre Condition of Triple Helix in
State.
In
ensure the triple helix strategy to workout they are few precondition that
developing state have to overcome first. Some of the key is state must ensure
that the firm can keep what they already earn. State cannot take over the
wealth that the company already earn that usually done by heavy taxation,
inflationary financing and interference of government in the company. Richard
F. Doner and Ansil Ramsay (2000) mention that lacking such commitment , firm
will fail to invest ex ante because of their knowledge that the insecure
environment reduces the benefits they accrue from investments ex post. Further
another thing that is important which is state must convince the industry and
private sector that they will not save the fail company that unable to operate
efficiently. All of the factor of interference of government will result the
Triple Helix strategy might not be working. This is because any effort that
will disturb the process of competitiveness will result in competiveness among
industry and cause of lack of commitment to do innovation. In short,
cooperation is needed to ensure competitiveness.
Conclusion
The
disappearance of innovators and Einstein from developing country in this case
Malaysia and Thailand could be analyzes in different level such as global level
, interstate level and domestic political economy of the nation itself. This phenomenon is a loophole that contains
us in the low income or moderate income class of state for more than a decade. The
dependence of the core is something that developing country cannot avoid but to
escape from the chain is a choice that the people, government and the
institution of the state can decide. The only way to escape from being
peripherilized is transparency and
competitiveness. This could only be achieved by allowing business sector to
prosper with the stimulant from the academia and the encouragement from the government.
University should play more role that what we are doing now. Knowledge is
power.
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