Header of SEAD Episode titled "Managing Cost of Living in Malaysia"

Managing the Cost of Living in Malaysia

In this episode, Bonnibel Rambatan and Greg Lopez will discuss the top three issues in The Citizens’ Agenda 2022: cost of living, employment and wages, and the economy, along with how the Malaysian government may address them through inclusive economic growth and all-inclusive social protection.

INTRO

Welcome to New Naratif’s Southeast Asia Dispatches. I’m your host, Bonnibel Rambatan, Editorial Manager for New Naratif. New Naratif is a movement to democratise democracy in Southeast Asia, and this podcast is one of the ways we attempt to do just that.

Democracy goes beyond the ballot box, and not only that — sometimes the politicians we elect via the ballot box aren’t exactly talking about the issues that the citizens are concerned about. This was what we found out through one of our award-winning programmes, The Citizen’s Agenda. Basically, we ask people the question of what they think are the most pressing issues facing their country.

Our 2022 poll for The Citizens Agenda in Malaysia finds that economic issues rank among the topmost pressing issues facing the country. The top five issues were: 1. Cost of Living; 2. Jobs and Wages; 3. Economy; 4. Corruption; and 5. Education.

Photo by Thilipen Rave Kumar

This isn’t exactly surprising, as Malaysians did not have the best start of the decade. The quality of life for millions of Malaysians has been drastically lowered by the pandemic, political and economic crisis, and flood. All of those have stretched the social protection system to its limit, which many might argue isn’t that great to begin with.

The general well-being of people and families is harmed by these often impulsive approaches to controlling the cost of living, and especially by an economic model that doesn’t promote inclusivity. So, what do we do now?

SPEAKER INTRODUCTION

So my name is Greg. I’m a Malaysian, but working in Australia at the Murdoch University. I’m trained as an economist, but I teach in the area of management and research, political science, political economy.

That is Greg Lopez, a lecturer at the Murdoch Business School, Murdoch University. He is educated in Malaysia and Australia and holds a PhD in economics from the Australian National University. He has an eclectic interest in Malaysia and interrogates the interplay of its political regime, societies, and markets.

In this episode, the top three issues of The Citizens Agenda in Malaysia—cost of living, jobs and wages, and the economy—will be discussed, along with how the Malaysian government may address them through inclusive economic growth and all-inclusive social protection, as well as how ordinary citizens can push this ideal situation forward.

INTERVIEW

Malaysia’s Current Economy

Yeah, okay, so I think this is right up your alley then, this whole research, this thing that we’re doing, right? So there’s a lot of anxieties, as we can see from the Citizens Agenda results.

So people are anxious about the economy, the cost of living, jobs and wages and all those things, especially considering that people don’t know how to manage the cost of living in this kind of economy, in this kind of situation.

So for starters, maybe can you tell us a little bit about what is actually happening right now in Malaysia’s economy? What is the current situation here?

So what’s happening in Malaysia is actually something common happening sort of across the globe. The stability of the economic system globally has been there is increasing volatility in the global economy. So what they said, the golden age of capitalism after World War II, right up to the end of the 60s, where there was stable growth, came to an end with the oil crisis.

And since then, the 70s, almost every decade, there have been serious global economic shocks. And this volatility has continued to increase. And what has happened in this great lockdown, this COVID-19, has just taken that volatility to perhaps the end degree. Now, having said that, it is the most severe economic crisis Malaysia has experienced since the 1997-1998 East Asian financial crisis.

But something about Malaysia, we’re pretty good at managing crisis

So within a year, Malaysia recovered. So it contracted by 5.5% in 2020, but immediately rebounded. And in 2022, we recorded an 8.7% growth. So the recovery was remarkable, better than expected.

But that doesn’t mean the issues that Malaysians are facing, the anxiety that you mentioned has been resolved. In fact, the lockdown has only heightened the problems or brought to fore the serious issues Malaysia has with social protection.

Great Recession VS Great Lockdown

Yeah. So, as you mentioned, there has been a couple of times that obviously, as did the world, malaysia experienced some shocks before, prior to this one, right. As you mentioned, the economic crisis of 97 98.

Also, Malaysia did have an economic contraction, 2008-2009ish around the global financial crisis. But you also mentioned that there’s been an amazing rebound within a year in the economy and stuff like that.

But what is the difference, actually? Did Malaysia have new economic policies? Did Malaysia learn from the past economic shocks and then has new policies applied to it? So how is it?

For example, if we compare to the Great Recession, as they call it, the 2008-2009, this recession globally? So let’s just say the Great Recession and the Great Lockdown, what happened around COVID-19, so the difference could be perhaps source and scale at a very high level.

So this Great Recession was what we call a systemic problem that came out of the subprime the US. Housing market through the financial system. So the financialisation of the housing market and the derivatives, the products that they created, worked its way into the US economy.

And because contagion, because of a different type of contagion of how linked the financial system and the real economy is from the US. Globally. So that transmitted what was essentially a problem in the US. Globally. That’s the source.

Now, the Great Lockdown, we call it an exogenous shock, something that came out of nowhere, you know, so it was a health pandemic. It was a health issue, nothing to do with the economy. The economy was running fine here’s, a health issue.

But in order to address the health issue, we had to do something with the economy lockdown. So the economic activities collapsed and at greater depth because literally all sectors, we had to go into lockdown in all sectors across I think all economies to contain this health issue, to contain the contagion, so the source is different. And then the depth of the economic contraction was even deeper. So that’s at a high level.

Now, how did the government response? the government response was similar. So most governments there’s fiscal policies that they can do and the monetary policies, so it’s always in these two areas in 2008, so there was fiscal policy. So I think two stimulus packages, 7 billion and 60 billion, about 67 billion Malaysian ring it to resuscitate the economy.

In this one, because of how deep the the economy the the contraction was, there were nine stimulus packages, approximately $530,000,000,000. So just because of how deep the economic crises were, the scale of the response also had to be bigger. But the focus was reducing unemployment, increasing job opportunities, easing economic burden, supporting the private sector. So it’s similar.

A big difference at the great lockdown was that the Malaysian governments spent quite a bit on the health sector, given the nature of the source of the economic contraction, which was a public health crisis, and scale responses is the same. So governments essentially had fiscal and monetary levers, but then the response, given how deep the difference was, so the COVID lockdown was $530,000,000,000, dwarfs the 2008, 2000 and 967 billion dollars response.

Persistent Disparity

Yeah. How did it do though? I mean, it it definitely the the scale is like much a lot larger with with the whole like nine stimulus packages, as as you mentioned, but also on on the other hand, like, you know, it’s, it hasn’t been a great beginning of the decade for Malaysians, right.

There’s a COVID lockdown, but also there’s been political turmoil, there was been flooding and all of those things must have connected to really to affect the situation. But with the stimulus packages, one can say, yeah, there’s been success there since the economy bounced back relatively rapidly.

But on the other hand, you also mentioned, I quote, disparities between the top and bottom incomes persist, despite declining headline inequality in the last two decades.

So what is actually happening here? Like lots of stimulus packages, the economy bounced back, but there’s a lot of disparities, there’s a lot of gap between the rich and the poor.

Now, what I’m saying is not how do you say, not rocket science. And a lot of what I’m saying in fact, I base this research or the views that I have on mainstream publications, and it’s available out there, so I’m not saying anything controversial or radical. So if you look at World Bank publications, world bank in Malaysia in particular, they’ve done fantastic work. And then Khazanah Research Institute.

Khazanah is a Malaysian government sovereign wealth fund. They’ve been producing fantastic research in a whole bunch of areas, but especially around social protection. So that the research is out there and it’s quoted in the article and it’s public mainly synthesised it.

So the the crisis you could say it’s an anomaly. So crises are anomalies. Although it’s happening with greater frequency, there are anomalies the longer term issues.

The Malaysian growth story, to put it in a different way, as Khazanah Research Institute publication puts it, it’s been a good story, or even the World Bank, Malaysia is recognised as one of the world’s most successful developing countries.

Now, this success was premised on sort of a low cost economic model. So we competed on our human capital being productive at a low cost and in particular in export oriented industries, while we derive fantastic growth rates. It’s amazing.

Other than those crises, which I think are, I think four times over the since post independence, it’s been like above 5% growth almost every year, 6%, 7%. Just amazing.

But so what’s what’s happened is, and I’m quoting primarily Khazanah Research Institute and World Bank, but there are a whole bunch of other folks who have also said the same thing, is that paid employment or employment related income is the largest segment of household incomes. So more than 60%. So this is where most Malaysians derive their income, most Malaysian households.

Yet again, a Khazanah Research Institute study, the Malaysian labor market exhibits a generally suppressed and broadly regressive wage growth pattern. And this is across 2030 years.

And what does this mean? So there are lower growth in lower wage groups in relation to higher wage groups. So those with higher incomes, let say ten deciles those at the top end, their wage growth is growing faster than those at the lower end, which is the majority of Malaysians.

And this is linked to Malaysia’s economic growth model. While we have been successful in eradicating, absolute poverty is almost gone. Relative poverty is also declining. Growth is on the decline with some variations over different periods.

The disparity has continued persistent because of the economic nature that has made Malaysia successful. We haven’t figured out what to do next.

And hence this article and all this research that is coming through that.

Look, if you want to become a high income nation, which we will achieve a projected 2024, 2028 World Bank’s study, you got to change your economic model. You got to change let’s be more inclusive. And then the other pillar is you need comprehensive social protection because that’s the only way you’re going to solve these issues such as this.

Low Cost Model = Low Social Protection

Yeah. On that note, though, so the model here is, again, as you mentioned, with the improvement of moving forward with more inclusivity and better social protection. That’s obviously a good thing. But at the same time, what is the current approach of social protection? Right.

You cited Khazanah Research Institute, the report that I’ve noticed that it says that social assistance is driven by targeting the deserving. So is that something intentional or is that something like it’s just a lack of perspective, maybe a bit of ignorance.

What do you think is happening here?

So I think it’s intentional. And this is linked to the growth model. So if you look at the acts, the current legislation around social protection, I think one came in 51 on health pre independence, but the others came like late 60s, so 69, early seventies. And this time there was a global, the Cold War sort of the capitalist model versus the socialist model.

And in Malaysia it was perhaps the most troubled times, just after May 13, a lazy, fair approach under the first Prime Minister and then figuring out what to do by the new administration, Tun Razak’s administration. So I guess they were trying to strike a balance.

They recognised from the 60s since independence that it has to be a low economic, low cost model. They needed to bring about industrial transformation. So surplus labor from agriculture into manufacturing. But they needed to be competitive. So either import substitution or export oriented, they were figuring it out, but it was going to be premised on a low cost model.

So a low cost model requires you to have low social protection.

And so this deserving or need only the poor or the weak rather than a more comprehensive approach which more socialist economists took.

So there was also an ideological debate, but also an economic debate. That’s my view on why we have this deserve. Only the deserving should have access to social protection. So it was intentional in my view, right.

Social Protection

That kind of like backfires, right? I mean, yeah, in terms of growth and then how the economy can bounce back and stuff like that. But if this persists, it’s not exactly sustainable to have social protection for only they’re deserving without being more inclusive in it.

So you did mention that it’s not just an economic debate, but it’s also an ideological debate, as with a lot of economic debates, I suppose, relating to this.

Do you have any thoughts on whether there are models out there actually that have similar problems maybe or like countries, other economic models that could be like a reference point, a benchmark for Malaysia system where Malaysia can still continue to grow but also being more inclusive, like with better social protection, for example?

Yeah, there’s sort of the Scandinavian model, the continental European model. Malaysia is having those debates right now, especially after COVID-19 because COVID-19 really showed how vulnerable even middle class Malaysians can be. And again, thank goodness for Khazanah Research. But also many others since I think since 2010 there have been sort of more progressive thinking around social protection.

Middle class Malaysians are a heart attack away from bankruptcy because Malaysian savings are very low and with a lot of privatisation that has taken place, healthcare and so forth, we’ve not developed a comprehensive social protection mechanism.

And with all the political turmoils that has been happening since 97-98, we’ve not been able to focus on what does society need because of the constant problems among the political elite there will be philosophical debates, economic, political, social realities and so forth.

But one simple way that we can look at things is, okay, so Malaysia is on the cusp of becoming a high income nation. Now, high income nation means you also need to ensure that you have a particular approach to your citizens.

What’s the point of being high income if 80% of your citizens are one critical illness away from bankruptcy or if they lose their job that goes everything that they have worked hard for?

There are going to be deep debates. But a simple way that we can look at this is how much do we spend on social protection?So let’s remove the ideological debate but just how do we, how much do we spend?

So there is an ILO study that it’s 2017 but it gives an indication. So among ASEAN countries and this social expenditure includes health, which is a big portion. So Malaysia spends 3.8% of its GDP on social expenditure. Singapore spends 4.2%, Vietnam spends 6.3%.

That’s just comparison against others in ASEAN spending more than Malaysia. Now, if you look at upper middle income countries, which Malaysia currently is, Mexico spends 12% of its GDP, Turkey spends 13.5%. South Africa spends 10% of its GDP and that’s upper middle income.

Now, if you look at high income countries, which Malaysia will be somewhere between 2024 and 2028, South Korea spends 10%, Japan spends 23%, Netherlands spends 22%.

Now, irrespective of your ideological belief just from a social expenditure point, Malaysia is so far behind our neighbours, two of our neighbours, let alone upper middle income country, let alone high income country. So that alone says, look, we got to spend more on social protection.

Whether you have an Islamic approach, whether you have an ethno-racial approach, whether you’re a socialist, whether you’re a capitalist, we are just spending too little on social protection, full stop.

Protect the Person not the Job

Yeah, I mean, it is pretty drastic when you compare it to other countries, other countries like that. But why historically has that always been the case?

And also you did mention that currently Malaysia is having debates but also the political situation in Malaysia recently has been quite unique, right.

So do you see this as an opportunity actually that people, this change is actually beneficial and we can push for better social protection and all of these expenditures, like increased expenditures in terms of percentage in GDP and stuff or how do you look at the situation?

Yeah, this is great. That New Naratif did that survey, so that’s fantastic. There have been many medical center have done anywhere in the world and in Malaysia cost of living is always an issue. Cost of living is always an issue come election or any quarter of the year, cost of living is always an issue. So we address cost of living issue.

Two principles is if you have economic growth but an economic growth that makes your life better. So I have career progress, my entry level job, my salaries are increasing now. And here is the problem again. Thanks to Khazanah Research Institute, wage growth in Malaysia has been, you know, as I mentioned earlier, has been regressive now.

And a key reason for the key reason for the lower wage growth is that the labor market, labor is weak. Labor does not have bargaining powers. So there is an embedded feature in the Malaysian economy that penalizes labor, right?

And I think Malaysians are beginning to realise that the doctors going on strike, the Grab, the delivery riders going on strike, we haven’t seen this for a while, but doctors going on strike, this is a profession which and public sector doctors going on strike, it’s almost unheard of.

So there is a problem, or the economic model that worked for Malaysia all this while is no longer fit for purpose. And I believe the government knows this. And the fact that Khazanah is coming up with this publication, Khazanah is an insider is that the government realises this, but it’s trying to figure out what to do.

But because there’s also polarisation fragmentation in the political elite, perhaps the required attention is not being given. So there is an opportunity, a space, but it’s also needed. It’s needed. Militia cannot sustain this current approach in its labor market. And hence the labor market needs to be reformed. But there are also many other institutions.

So it needs a new economic model. And it needs a new economic model for several reasons. One, at a high income level, you cannot compete on low wages. That cannot be the way. So you need a different system, a different labor market. And also then because you’re at the frontier. So it’s very disruptive, it’s very risky.

So how do you protect your workers? And there’s this saying protect the person, not the job. So you compete, but you ensure there is a safety net in the event, the workers in Malaysia, whether they are citizens or non citizens or permanent resident, if something happens to them, there is a safety net.

So protect the person, the individual, not the work. So you compete.

Malaysia is currently trying to figure this out because there’s a lot of work in this area. In the government, there is efforts to look at social protection and there’s also efforts to look at the labor market.

The shared prosperity vision that I believe it may have come out under Pakatan Harapan, but it’s continued. So that term itself shed prosperity, I believe, suggests that the political elites are thinking about how will this shed prosperity look like? So certainly now is the time for a good discussion on this.

Unionisation

Yeah. And again, going back to wages, I mean, even speaking in purely economic, economic terms, even not in social terms, there’s like issues of brain drain. Then there’s issues like everything else. If we have wage problems, stuff like that.

So obviously, inclusive economics and then social protection but also setting the wages. Right? That’s an important issue. No matter, as you mentioned, no matter your ideological position, right?

Okay. We’ve laid out the problem here and what we need, the things that we need to aim for.

What do you think are the concrete steps that we need to take in order to move forward? What are the current debates like in Malaysia about centralised wage setting process, for example, or like other policy, certain policy recommendations?

What are the current steps that we can take and that are currently being discussed in Malaysia?

The government has minimum wage policy was sort of something amazing if you’ve been following the Malaysian context. Now, of course there are criticism about the level of the minimum wage, how it’s being implemented and so forth. But simply that the idea that the minimum wage has been set is an amazing step forward in Malaysia. So that’s already good.

So it’s a highly centralised tripartite system. But I think the union representation is perhaps not as strong in this current model. So it would be in the government’s interest and certainly in in the interest of Malaysians because the large number disproportionately a large number of Malaysians, as I mentioned earlier, derive their households, derive income from employment.

So when the union is strong, the ability to bargain is strong. But the government can also set up formulas, for example, that which should always rise above inflation and there will be debates and discussion that one view will be that if that could create a spiral of inflation and so forth. So there’s all those debates all there and they should be had.

What the government can immediately do and what Malaysians can immediately do is to ensure a higher level of unionisation.

So promote the unionization. So remove some of the current laws that hinder unionisation, provide education to recognize how important unions are in reforming the labor market because we already have enough research to say that this is one of the reason Malaysia has this regressive wage growth because it’s not unionized.

That certainly, but how you do it, you still want the labor market to be flexible. Okay, so perhaps not a very rigid so allow bargaining. So maybe different regions have different wages, different sectors perhaps. So allow for those debate.

But understand, central to all this is that you need strong union representation. That could be one.

And then secondly, the government can set the agenda for how the discussions continue. So it could say things like minimum wages will be reviewed every two years. So it’s a formula. It’s not dependent on whether the employers want it or not or if the union wants more.

So we come to an agreement that it will be reviewed every two years. So this is on the inclusive economic growth side and then also ensure that whatever that is negotiated, the benefits accrue to all workers, whether they are unionised, whether they are non unionised, whether they are in a formal or informal.

If you just work for a company that is five people and hence no union, you will benefit. If you are a migrant worker, you’re working in that industry, you will benefit. So all workers benefit. So then you set the standard across.

So this is genuinely inclusive growth. So that’s the one pillar that you need. Inclusive economic growth. And central to that will be ensuring unions right at the center of which bargaining. So an institutionalised wage bargaining system that accords proper rights to labor to union.

Authoritarian Regime

Where are we now in terms of that? In terms of are there anything like any laws that hinder the forming of unionisation that weaken unions and stuff like that? Because yeah, it’s a bit related to that.

Also, there are, you know, Khazanah Research Institute did recommend other policy changes such as like Universal Basic Income for children, establishing Social Security, social Insurance, pension for Old Age Financing and Progressive Realisation Strategy, and building a national Social Security institution and a unified registry.

So there are plenty of these recommendations. But also, as you mentioned, obviously we do need strong unionisation to push for all of these and to increase the bargaining position there.

But at the same time, I wanted to get a better idea of where are we now in terms of actually implementing those recommendations, but also strengthening unions.

Are there laws we need to be wary of?

Yeah, these are recommendations we’re not yet there in terms of so unions are represented in the current wage mechanism, but which union? They are government friendly unions. There are some, what the government would say, militant unions, and they are targeted at an even higher level.

Malaysia is still conceptualised as an authoritarian state in an electoral authoritarian state. So there are features, there are democratic features, but it is still an authoritarian state. The Home minister is very powerful. So there are laws that the Home minister can use. Nothing related to union, but they can come after you in many ways.

The recent raid on Swatch, I’m not sure if you’re familiar because of the colors of the watches. So national security is an all encompassing anything. As Hishammudin said, if the government doesn’t like the color of your hair or your haircut, and it can say this is national security and they can come after you, that’s an overarching issue.

And it’s any government. This is supposed to be a reformist government under Anwar Ibrahim. And it is this reformist government that has just done these things. And it was different.

It was the Perikatan Nasional, supposedly a more ethnocentric government that legislated the minimum wages in Malaysia after the coup, after they overthrew Pakatan Harapan, they legislated something that Pakatan Harapan had promised but didn’t do. Perikatan Nasional legislated minimum wages and introduced it.

At the higher level, we remain an authoritarian regime. So any government is still authoritarian. So that’s another issue or a different issue to address. But an authoritarian regime that wants to be credible will ensure that its supporters, who are most of them are the poor Malaysians on either side.

Whether Pakatan Harapan or Perikatan Nasional, it’s poor Malaysians who support them both. 80% of Malaysians earn less than 4000 ringgit a month. If they want to be credible and genuinely deliver inclusive economic growth, they would find ways to ensure their supporters derive the benefits of malicious economic growth.

And the best way, the most efficient way is to strengthen unions. So then their representatives will sit together with the employers union and the government and negotiate a wage and balancing the need for economic growth but also distributing that economic growth.

Now, if the government gets this side right, then the comprehensive social protection is strengthened also because higher wages would mean also higher taxes. Malaysia currently has a very narrow tax base, so it has to reform its its tax. But then higher wages will mean sort of broadening of the tax base but also raising the tax.

And then of course you include progressive taxation which the government is slowly starting the recent budget. So you tax the high income earners more, the owners of capital shares, you tax them more and then some malicious tax collection is also terrible lower than its competitors.

So you have more efficient ways of taxing people and also you introduce perhaps a more automatic ways of taxation for goods and the GST, which is more efficient. And you don’t have to worry about the regressive elements there because you have a progressive.

So GST may be regressive or is regressive because it taxes everyone for consumption, but you can compensate that through progressive taxation and a fantastic comprehensive social insurance. So it works out for everyone.

Labor Based Parties

Yeah, I want to go back to your very interesting, very interesting thing that you mentioned. Also quoted Shi Huang with authoritarian state, with electoral, authoritarian state with democratic features and stuff like that.

I mean, there are lots of lots of ways and lots of debates to be had. But as you just explained, it’s actually there. The path forward is actually there. It kind of got me thinking though, for regular Malaysians, for regular citizens, what political action can Malaysians actually take to improve the situation?

And I guess that’s also connected to other things like the Malaysian identity. Are you authoritarian? Do you want to be democratic?

And what’s the history like behind Malaysia itself? You want to speak a bit more about that and I believe you will be speaking more about that also, right?

So I’m part of the committee member of the Malaysia and Singapore Society of Australia, MASSA. So we are having this big conference on July 7 and 8th in Kajang at New Era College where we’re going to discuss. The theme of the conference is “Who are you, Malaysia?” This evolution of our identity and this issue. Such as this abroad will be.

We’ve got over 70 paper presenters discussing a whole range of issues. And you’re right, it’s all interconnected. It’s all interconnected. So the economist in me says, look, let’s find the most efficient and effective way to protect Malaysians or to protect anyone who is working in Malaysia or who is in Malaysia. Okay?

And that’s why I find Khazanah comprehensive social protection policies fantastic because they’ve, you know, they’ve really crunched the numbers on, on how this can be achieved. So they’ve provided the intellectual arguments.

World bank also has done similar studies on social protections. So it’s a global issue in Europe, the pension crisis, the aging society and in advanced economics in Australia, how do we pay for the aging society living longer, but also the health issues that are associated with living longer.

So how do we pay for all this? And then a shrinking population. So it was always the younger workers paying for the older workers, but it was a pyramid. So more younger workers, bigger base paying for a narrow older retired but that pyramid, it’s no longer a pyramid. It’s almost like a building.

Now we got to think about it. Every country is facing the same thing, including Malaysia. So how how do we think about this? And, and okay, and in Malaysia, identity politics is is important.

So I would, I would say to Malaysians of any persuasion, so let’s say if you are a supporter of the Islamic party, I would ask the leaders of the Islamic party to say, how does Islamic governance ensure social protection? How does Islamic governance promote inclusive growth? So can past articulate that?

Can members of past leadership, how will you ensure inclusive growth? How does Islamic justice, concepts of Islamic justice ensure comprehensive social protection? How does it the fruits of labor, how does it distribute the fruits of economic growth?

I would ask the Ethnocentric parties, okay, how do you ensure comprehensive social protection of all Malaysians, of everyone living in Malaysia, we have one of the largest foreign labor, 23 or 25%, formerly of migrant labours.

How do we ensure comprehensive social protection for all of labor? I would ask the state based parties. So you may be state, but your state, Sabah Sarawak, high migration population, working in the plant, poorest borders, how do you ensure social protection?

So just let’s start talking about comprehensive social protection, inclusive growth. There are intellectual there are papers that are how do I say, like KRI, World Bank papers. You could say ideology free. The World Bank might be growth, but inclusive growth.

I would say, look, let’s listen to parties that are based on labor. There are currently two in Malaysia. Party Socialist Malaysia and Party Rakyat Malaysia. The part that didn’t join PKR. So these are socialist parties. So labor based parties. So let’s listen to them.

They have a longer history of promoting labor rights. They do a lot of activities. Parti Socialist nation does a lot of activities pro bono to protect labor. So let’s listen to them on their views of sharing economic growth, protecting labor. So let’s mainstream the discuss the discussions around inclusive economic growth.

What would that mean and what would comprehensive social protection mean for Malaysians? This is the only way forward, in my view.

Solidarity Across Southeast Asia

Yes. As you mentioned, no matter what party you align yourself with, you mentioned Malaysians of any persuasion should really take this up for discussions and debates along with their political movements, political parties or even their circles and just really care more about the labor rights and unionisation push for those.

So I do think that’s very important. But I guess it also leads to my last question here. For listeners who are not Malaysian, for people who are like, who live in the rest of Southeast Asia, for example, are there still things that we can do to improve this situation? Because again, I’m sure while this certain situation, certain parts of action are unique to Malaysia, the problem itself is not right.

So what would you say? What would you tell the listeners who are not from Malaysia but who care about these issues, whether in their own home country or in Malaysia?

Yeah, thank you. And one of the reasons I’m very impressed with New Naratif, at the highest level, this is about global solidarity. If you look at the stats, the rich small percentage of people throughout the world, the amount of wealth they own bezos there is something fundamental.

As an economist, you learn there cannot be supernormal profit and that rent or there is justice. In an efficient economic system, everyone will get their due reward, the labor, the capital and government through taxation. Clearly, this is not true. Clearly this is not true.

How can there be concentration of wealth if the market is efficient?

So clearly there is something fundamentally wrong with our economic systems in our country, globally and our countries are Malaysia is an open economy. Most ASEAN countries are very open. So we are all part of a bigger problem.

This concentration of wealth which comes out from a dysfunctional economic system and this dysfunctional economic system is concentrating wealth while destroying the resource base. It’s a very environmentally damaging economic system. So it’s no longer just an issue around poverty or inequality. There’s an existential challenge now with this economic system. So it’s about solidarity.

Now we got to move. An issue I often see, especially between Malaysia and Indonesia, is how Malaysians treat Indonesian labor. But it’s also a problem Malaysians in Australia, in informal sectors. And Australia is a developed country being treated badly. So labor is vulnerable in so many ways. So developing solidarity is, I think, going to be crucial. And I know there are already solidarity networks around migrant labor or slave labor, but I would encourage that more.

So the focus is, while we think of inclusive growth and comprehensive social protection in any country that we are, we must say inclusive growth and comprehensive social protection for everyone in our country, not just citizens. And if we do this across all countries, let’s say, let’s use ASEAN as a bloc. There is an ASEAN community as we’re working towards an ASEAN community.

So we socialise the idea that ASEAN member states will protect ASEAN member citizens, perhaps that’s a start. And then as we push it, we ensure all foreign labor working in ASEAN countries will be accorded protection. Yes, from an economic perspective, that’s an efficient market. We are able to bring the most competitive labor, the most competent labor.

But wage is not the factor, it’s the competency, the capability of that labor. Wage will be paid equally at a decent level to all labor. So, yeah, that would be my sort of I would encourage anyone who’s listening to this podcast to promote this where they are the solidarity. Social protection for everyone in my country. Inclusive growth for everyone in my country.

Yeah, I love that. I love that. Building solidarity. Again, we are talking specifically about Malaysia, but the problem is global. And as you mentioned, touching upon global solidarity and being critical towards the economic system that has got us here in the first place, that really concentrates wealth on the hands of very few people, destroying the resource base, as you mentioned. Yeah, keep building solidarity and keep pushing for formulations. We did discuss about supporting unionisations and then talking to your friends, talking to your circles, talking to your political parties and representatives and all of that. I do think that can apply to not just Malaysians, but everyone. But I think it’s really important to just build that kind of solidarity for more inclusive economic growth. And I think that’s a great note to end on. Thank you so much, Greg.

Thank you, Bonni. I really appreciate this opportunity.

OUTRO

And that wraps up our discussion with Greg Lopez. It’s worth reiterating that there are many things you can do to improve your country’s economic system.

Engage your state and federal representatives to encourage them to champion inclusive growth and comprehensive inclusive social protection. Support, either financially or through other means like volunteering, civil society organisations that champion inclusive growth and comprehensive inclusive social protection. Support the trade union movement in Malaysia to achieve high unionisation rates, which would enable strong trade unions to take collective action on behalf of all workers.

Most importantly, keep building regional and global solidarity and maintain a critical eye on any economic system that concentrates wealth on the hands of few.

My name is Bonnibel Rambatan, and this has been Southeast Asia Dispatches. Brought to you by New Naratif, and produced by Dania Joedo. I’ll see you around.

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