Policy Levers in Malaysia - Department of International ...
Policy Levers in Malaysia - Department of International ...
Policy Levers in Malaysia - Department of International ...
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CRISE <strong>Policy</strong> Context Paper 4, May 2004<br />
In terms <strong>of</strong> communal, rather than religious, organisations, Dongjiaozong, the comb<strong>in</strong>ed<br />
name for the United Ch<strong>in</strong>ese School Teachers’ Association and the United Ch<strong>in</strong>ese<br />
School Committees’ Association, is undoubtedly the most <strong>in</strong>fluential non-political<br />
Ch<strong>in</strong>ese lobby, and has <strong>in</strong> the past been successful <strong>in</strong> mobilis<strong>in</strong>g considerable sections<br />
<strong>of</strong> the Ch<strong>in</strong>ese community (Tan 1992). As education is an issue at the heart <strong>of</strong> ethnic<br />
relations <strong>in</strong> <strong>Malaysia</strong>, Dongjiaozong could provide an important resource <strong>of</strong> CRISE. The<br />
organisation has oscillated between close collaboration with the MCA and a more<br />
oppositional stance, but its <strong>in</strong>fluence <strong>in</strong> the community is such that the government<br />
cannot afford to ignore it completely. Traditionally, the most powerful Indian lobby group<br />
has been the National Union <strong>of</strong> Plantation Workers – represent<strong>in</strong>g a sector which is both<br />
dom<strong>in</strong>ated by Indians, and which constitutes a substantial proportion <strong>of</strong> rural Indian<br />
employment – although chang<strong>in</strong>g employment patterns and labour laws have seen its<br />
<strong>in</strong>fluence decl<strong>in</strong>e.<br />
Th<strong>in</strong>k tanks<br />
In recent years, the number <strong>of</strong> ‘th<strong>in</strong>k tanks’ <strong>in</strong> <strong>Malaysia</strong> has grown apace. Th<strong>in</strong>k Tanks<br />
<strong>in</strong> <strong>Malaysia</strong> tend to be l<strong>in</strong>ked with <strong>in</strong>dividual politicians, and <strong>of</strong>ten share their patron’s<br />
fortunes; the Institut Kajian Dasar (Institute for <strong>Policy</strong> Studies), l<strong>in</strong>ked to former Deputy<br />
Prime M<strong>in</strong>ister Anwar Ibrahim, has seen its <strong>in</strong>fluence evaporate after Anwar’s dismissal<br />
and imprisonment (for a discussion <strong>of</strong> the role <strong>of</strong> th<strong>in</strong>k tanks <strong>in</strong> the policy process, see<br />
Derichs 2004). As semi-autonomous <strong>in</strong>stitutions with close l<strong>in</strong>ks to elite politicians, these<br />
th<strong>in</strong>k tanks provide an potentially <strong>in</strong>fluential contact po<strong>in</strong>t for CRISE, although it is<br />
important to rema<strong>in</strong> cognisant <strong>of</strong> the limits under which they operate. Among the top<br />
rank <strong>of</strong> th<strong>in</strong>k tanks currently operative are the <strong>Malaysia</strong>n Institute for Economic Analysis<br />
(MIER), the Institute for Strategic and <strong>International</strong> Studies (ISIS) and the Socio-Economic<br />
Research Institute (SERI).<br />
6. The <strong>International</strong> Context<br />
<strong>Malaysia</strong> has low <strong>in</strong>ternational aid receipts and foreign borrow<strong>in</strong>g – the government<br />
ma<strong>in</strong>ta<strong>in</strong>s that it borrows <strong>in</strong>ternationally for ‘benchmark<strong>in</strong>g’ purposes only, although<br />
opposition groups allege that it has substantial hidden borrow<strong>in</strong>g for such projects as the<br />
construction <strong>of</strong> the new federal capital at Putrajaya. As environmentalists campaign<strong>in</strong>g<br />
aga<strong>in</strong>st <strong>Malaysia</strong>’s exploitation <strong>of</strong> its timber resources discovered <strong>in</strong> the early 1990s, this<br />
leaves the country relatively impervious to the k<strong>in</strong>d <strong>of</strong> ‘conditionalities’ that constitute a<br />
strong policy lever <strong>in</strong> other develop<strong>in</strong>g countries (Eccleston 1996).<br />
Historically, Foreign Direct Investment <strong>in</strong> <strong>Malaysia</strong> has been substantial, suggest<strong>in</strong>g that<br />
negotiation with foreign <strong>in</strong>vestors may be an effective policy lever. Investors have<br />
certa<strong>in</strong>ly had a visible impact on policy <strong>in</strong> the past, notably <strong>in</strong> the electronic sector, where<br />
pressure from <strong>in</strong>vestors contributed towards the government's refusal to allow a<br />
nationwide union <strong>in</strong> the sector. FDI <strong>in</strong> <strong>Malaysia</strong>, however, has not yet recovered from<br />
the shock <strong>of</strong> the 1997 f<strong>in</strong>ancial crisis and, <strong>in</strong> 2001, <strong>Malaysia</strong> dropped out <strong>of</strong> the top<br />
twenty-five FDI dest<strong>in</strong>ations. Prospects for future growth <strong>in</strong> FDI are underm<strong>in</strong>ed by the<br />
expansion <strong>of</strong> FDI <strong>in</strong> Ch<strong>in</strong>a, which is <strong>in</strong>creas<strong>in</strong>gly dom<strong>in</strong>at<strong>in</strong>g regional flows. Fall<strong>in</strong>g rates<br />
<strong>of</strong> FDI clearly hamper the potential <strong>of</strong> FDI <strong>in</strong>fluence as a policy lever.<br />
Whilst all the major <strong>in</strong>ternational organisations have <strong>of</strong>fices <strong>in</strong> <strong>Malaysia</strong>, the government<br />
rarely feels constra<strong>in</strong>ed by its <strong>in</strong>ternational obligations. It has refused to recognise the<br />
UNHCR and has only ratified the Convention on the Elim<strong>in</strong>ation <strong>of</strong> Discrim<strong>in</strong>ation aga<strong>in</strong>st<br />
Women by mak<strong>in</strong>g exceptions to some <strong>of</strong> its core sections. Of more <strong>in</strong>fluence <strong>in</strong><br />
<strong>Malaysia</strong> are the regional organisations, the Association <strong>of</strong> South-East Asian Nations<br />
(ASEAN) and the subsequent ASEAN Free Trade Agreement (AFTA). The ‘<strong>in</strong>formal<br />
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