Malaysian Maverick: Mahathir Mohamad in Turbulent Times by Barry Wain (fantasy novels to read .TXT) 📕

was simple: Government and private business must cooperate closely to enable companies to flourish. He said Malaysia should be viewed as a company, in which "the government and the private sector are both owners and workers together". More efficient and prompt government services would increase prospects for company profits, he said, creating more jobs and related enterprises, paying more taxes and spreading income to people who would in turn purchase goods, some of which would also be taxed. His administration also encouraged the formation of docile in-house unions, as in Japan, which "appeared intended to further weaken the already weak trade union movement in the country".[37]

No undertaking gave Malaysians a better understanding of what Dr. Mahathir was all about than the country's head-long crash into heavy industry. With almost all commodity prices dipping on world markets simultaneously in the early 1980s, the weakness of Kuala Lumpur's diversification strategy was exposed. After a threefold increase in export earnings between 1975 and 1980, the country's economic planners had forecast exports to top RM63 billion by 1985. They failed to reach RM38 billion. Dr. Mahathir blamed rapidly advancing technology as well as manipulation by the developed countries for the collapse, and declared that "there is no future in commodities".

As trade and industry minister as well as deputy premier from 1978 to 1981, Dr. Mahathir had sold Malaysia to American, European and Japanese multinationals as a platform on which to manufacture industrial products for overseas markets. But as prime minister he argued that export-oriented manufacturing was insufficient. "We do not want to be grounded in the mediocrity of mere assembly operations," he said.

Although the world was entering a recession that would inevitably affect Malaysia, Dr. Mahathir pushed ahead with plans for a Malaysian car, steel and cement industries, motorcycle-engine factories, an oil refinery and a pulp and paper mill. The vehicle was the Heavy Industries Corporation of Malaysia (HICOM) that he had established in 1980 and taken with him to the prime minister's office. In quick order, HICOM negotiated joint ventures mostly with Japanese and South Korean companies, usually taking 70 per cent of the equity. By 1983, heavy industry plans were expected to require more than RM8 billion in investments.[38]

The arguments against the programme were formidable, though few businessmen, academics and officials expressed their doubts publicly for fear of offending the prime minister. Heavy industries would require massive amounts of capital and foreign borrowings over long gestation periods, diverting investments from other projects. Given Malaysia's small population — 14 million in 1983 — cars and steel especially were unlikely to be profitable in the domestic market unless sheltered behind protectionist walls or subsidized. Either way, it would be a burden on local consumers, who enjoyed easy access to imported manufactured goods. If Malaysia tried to export its output, it would find itself competing with established producers in fields already threatened by global over-capacity.

Dr. Mahathir would have none of it. He regarded heavy industries as an expression of nationalism that would show how Malays could advance beyond the economic limits previously set for them.[39] He was thinking beyond individual products, prices and market share to the next stage of industrialization, as in South Korea. Seoul had ignored conventional advice and refused the temptation to continue buying steel cheaply from Japan, Dr. Mahathir said, and now the South Koreans were selling steel to Japan. He was certain heavy industry would bring similar substantial benefits to the Malaysian economy through technology, skills and numerous spin-offs. Large manufacturing enterprises needed supporting industries and services, which must be provided mainly by locals. "The spillover is literally tremendous," Dr. Mahathir said, echoing his primary school teacher's message. "Whole new towns spring up where industries are located...new services and trades spring up."[40]

Dr. Mahathir conceded that cars, for example, could be imported cheaper, but insisted the capacity to produce vehicles was a necessary component of Malaysia's industrialization. He was frustrated that many Malaysians did not share his enthusiasm about building a great nation and, worse, some did not even believe it was possible. He urged them to "overcome the mental block which condemns us to being the producers of primary commodities to fuel the growth of the industrialized countries".[41] Just as "everybody" had said South Korea was "stupid", Dr. Mahathir disparaged his own critics, predominantly economists. "These people don't have the faintest notion of what they are talking about", because "what they say is purely academic based on theories learnt in universities".[42]

One theory that kept cropping up was economies of scale. Dr. Mahathir had a typically novel solution: Malaysia should increase its population by 400 per cent to 70 million by 2100 to create its own market. He recommended five children in a family. His pronouncements jolted the family planning authorities, who had been trying to hold down population growth, as was standard practice in most developing countries, to increase the per capita benefits of economic expansion. So the official target was set at 70 million people by the end of the twenty-first century, even though no serious thought was given to how they would be productively absorbed.

From Dr. Mahathir's standpoint, the government's lead in the heavy industry charge would also help it meet its NEP targets, by giving bumiputras the chance to train as industrial managers and skilled blue-collar workers. But in bypassing the Chinese who dominated domestic manufacturing, the government was forced to rely "almost exclusively on mostly inexperienced, often inept and sometimes corrupt elements from the Malay-dominated government apparatus" — and foreign companies.[43] Most of the business went to large Japanese and South Korean companies without any open, competitive tendering. Particularly lucrative were turnkey contracts that gave them total control over design, material and construction. The Malaysians found out later they had been ripped off by some of the foreign outfits, which overpriced imported technology and supplies.[44] Altogether, it was "a helluva expensive way to transfer technology to a few workers".[45]

Launched as the global recession gripped Malaysia, with projects run by bureaucrat-managers lacking appropriate training, Dr. Mahathir's