Sukudhew (Sukhdave) Singh Former Deputy Governor, Central Bank of Malaysia | Former Independent Director, Khazanah Nasional Berhad

When there are few Chinese and Indians left in Malaysia A quasi-Malay ex-politician’s recent rant questioning the loyalty of Indians because they are not “Malay enough” in his bigoted perspective got me thinking. Not about bigots who, like snakes, only know how to spew poison and wag their forked tongues; but rather, whether the Malays would really be better off if there were a lot fewer Indians and Chinese in Malaysia?

The contributions of the Chinese and Indians to the Malaysian economy have never been appreciated by most of the Malay majority. Historical records and history books have been distorted to minimise the role of these communities in the country’s social and economic development. All this has been done to bolster the role of the Malay community and to justify its exorbitant privileges. Under the guise of addressing inequity, the Chinese and Indian communities have been subjected to a half-century of institutionalised discrimination.

Poorly educated Malay academics, religious scholars and politicians continue to make outlandish claims against these communities as an easy way to bolster their popularity within their own community. I will let the past lie where it is, since there is not much we can do about it. I will only say that people who do not understand their true history have little hope of understanding their future. And it is the future I am concerned about.

What type of country will Malaysia become?

In another 50 years, based on current trends, there will be far fewer Chinese and Indians living in Malaysia. The growth of these communities has been slowing. Between 1980 and 2020, the population of Chinese and Indians in Malaysia grew at an average annual rate of 0.8% and 0.9%, respectively. There is a clear decelerating trend in that growth over those years. Even though the growth rates were low, the Chinese and Indian communities were still growing, each almost doubling in size over the four decades.

This will change and the growth of both communities is likely to become negative. Lower birth rates are a factor. Both the Chinese and Indians now have birth rates that are below replacement levels. The Indians also have the highest mortality rate of the three major ethnic groups. The decline is being accelerated by another trend. After being treated as second class citizens for decades, many have left and many more will continue to leave. Increasingly, that trend is evolving into young Chinese and Indians preferring to stay abroad after completing their education.

The Malaysian diaspora is large, and it will continue to grow. I expect that beyond the next 20 years, if not sooner, the Chinese and Indian populations in Malaysia will start declining. And that trend will continue, leaving these communities much smaller. For the Chinese and Indians, the diminishment of their numbers would reduce their political and economic influence.

The Indians are already feeling it with some Malay politicians feeling very comfortable with taking potshots at the community. I also expect that the shrinking of these communities will lead to a shrinking of the dynamism of the Malaysian economy. When communities cannot rely on privilege but must compete to get ahead, it increases the overall competitiveness of the economy. That competitiveness is eroded when the numbers of the unprivileged shrinks relative to the privileged.

What will be the consequences of this long-term demographic trend for Malaysia and the Malays? Perhaps, when their Chinese and Indian neighbours are gone, the Malays will miss the multi-ethnic richness of Malaysia’s past. They may miss the fact that Chinese New Year, Christmas, Diwali, Wesak, and Thaipusam are no longer public holidays. Or perhaps, they will rejoice at their political and religious hegemony. They may celebrate the mono-religious nature of Malaysian society which many have craved for so long. No more worries about alcohol drinking, concerts, or short skirts. No more worries about non-halal food anywhere in Malaysia.

Where there were temples and churches, there will now be mosques. For the tens of thousands of Islamic scholars in the country, with fewer non-Malay targets to pillorize, they will now turn on their own community to remain relevant and employed. Sharia law will be the law of the land. Even if the Malays rejoice at the mono-religious nature of Malaysia, that would be about the only thing they have to cheer about. Other things happening around them will not give them much reason for celebration.

Let us start with the likely fate of the race-based discriminatory policies under the New Economic Policy. What the Malay leaders have essentially done under the New Economic Policy is to give their community a crutch, told them they can never survive without it, and that the non-Malays want to kick that crutch out from under them. It has been a successful strategy for their leaders to enrich themselves, but not so good for the future of the community. It has left them feeling entitled, but insecure.

This has been going on for a half-century. And it will try to continue for another half-century, as it is hard to give up privileges once bestowed. But the NEP is highly likely to sink under its own weight when the economy can no longer support this burden of privileges. Especially, when the non-Malays are no longer around to carry a large part of that burden. Privilege cannot exist unless there is a sufficiently large number on unprivileged. The narrative that had defined the NEP since its inception will also have to change. There will be too few Chinese and Indians left to be made scapegoats of this misguided and abused policy.

Who will be the new targets on which the Malay leaders will place the blame for the sad state of their community? The Bangladeshis? The Indonesians? The Rohingya? Perhaps. But perhaps it will finally dawn on the Malay community that their biggest enemy had always been within their own community. Those who claimed to be their champions have turned out to be traitors to their race and country. The infighting among the Malay elites for the economic spoils has already started. And as the population of non-Malays shrinks, it will get worse. With fewer Chinese and Indians, the need for vernacular schools will be considerably less, and there would be fewer of them, if any.

The Malay nationalist will have gotten their wish. Everybody would now be subject to the same mediocre public education. The poorly educated of one generation will become the teachers of the next generation. Hence, mediocrity will not only be perpetuated but will progressively become worse. The universities will continue to churn out thousands of Ph.Ds. with paper qualifications but not the intellectual skills or knowledge to contribute effectively to the economy. Most likely, the civil service would become bloated with these Ph.Ds., to the great disadvantage of the nation. Productivity will be abysmal, and wages will be low to reflect that. Losing the two communities with close cultural links with the two largest economies in the region will have negative economic consequences for Malaysia.

Economic ties with China and India are likely to greatly diminish and that deterioration will accelerate when other more dynamic regional economies provide more attractive destinations for trade and investment by these major economies. Even links between Malaysia and the Middle East countries, which are so highly valued now, are likely to become more frayed as those countries become increasingly focused on using their oil wealth into attracting expertise and investment from the developed countries to diversify and modernize their economies. Malaysia will have little to offer to attract the attention of these economies.

Public debt is likely to continue to climb given the lack of political will over decades to address the core issues undermining fiscal sustainability. If these continues, and the economy underperforms, that debt is likely to get much higher and more unsustainable. At some point, the rating agencies will start rounds of downgrades of Malaysia’s sovereign rating, which will have significant negative effects across the economy, particularly on the exchange rate and the financial system.

Inflation will spike while the economy goes into a prolonged downturn. That downward spiral will likely put the country under the IMF, and difficult policy decisions that severely affect the welfare of the country’s citizens will be introduced. Fiscal policy will be severely restrained.

The bloated civil service will have to shrink and even suffer pay cuts. Depending on how bad things have gotten, even these measures may fail to revive the economy, and economic instability will be the new reality for Malaysians. The millions of retired civil servants will find that the government pensions and medical benefits they were promised are now less than they were.

Daily necessities will be harder to afford and expensive new medications to treat their chronic diseases will be unavailable in government hospitals because the government does not have the money to pay for them. The standard of health they expected will not be available, and their life expectancy will be shorter.

The large population of elderly Malays will find that their privileges have become empty promises because the government can no longer support them in their old age. Their children are barely earning enough to make ends meet for their own families. Wide-spread destitution of the aged will be the reality.

University graduates will have a hard time finding good jobs and will face a lifetime of underemployment or misemployment. Parents will face the reality of their daughters, some with Ph.Ds. from local public universities, going to other countries to work as maids and housekeepers. Young Malays, whose forefathers had proudly proclaimed that they were “sons of the land”, will find they must look at other countries for jobs, because the land of their birth has become barren of opportunities.

With few Chinese and Indians left in the country, the major burden of servicing and paying the huge public debt will fall on the Malay community.

It is fair this community should bear this burden since they were the major beneficiaries of the government spending that led to that huge pile of public debt. Leaders from their community stole the most from public coffers. But, from the perspective of the Malay descendants, they may consider it very unfair that they must carry the impoverishing burden that is a legacy of the exorbitant benefits enjoyed by their forefathers.

The children will pay for the sins of their fathers. With the economy in shambles, daily life a constant struggle, many may ask questions about how it was possible that Malaysia could reached this dismal state. They will ask how a country that was once a land of opportunity could have become the economic ruin that is now their reality? How can a community that had so many people with titles, that occupied almost every senior government position, had so many ministers, and enjoyed so many privileges, reach this state of destitution?

What happened to the hundreds of plans and masterplans that every Malaysian government had launched since the birth of the nation? How many of those plans were implemented with success? They will ask how their forefathers could have thought it was a good idea to undermine the education system and sabotage the future of their own community?

How could such a decrepit education system have been allowed to persist for so long that generations of Malay youths have been left bereft of skills and knowledge? They will ask what happened to the trillions of ringgits in petroleum income? Where did it all go? Unlike other petroleum exporting countries, why was Malaysia unable to build up a reserve of savings to safeguard its financial future?

Why did their forefathers think that dignity and honour can be demanded from others? That these can be bestowed with titles? Why did they not understand that dignity and honour must be earned? They will wonder why their forefathers did not have the wisdom to choose leaders of merit, irrespective of race, who could have guided Malaysia into a brighter future?

Why did they keep choosing corrupt and incompetent leaders of their own race and religion, despite their obvious failings? They will wonder why so many Chinese and Indians, second-class citizens in Malaysia, have found success in their new homelands, while they, the privileged, who had all forms of government assistance from cradle to deathbed, are now facing a bleak future in a ruined economy.

There will be so many questions. However, the time to ask those questions will already have passed. Few in the community asked these questions when there was still an opportunity to change the course of history. The opportunity for reforms will be long gone and that missed opportunity will be part of history – as will be the community with the greatest responsibility for the sorry state of the country.

The dismal state of the economy, and the never-ending struggle to make a living, will be daily reminders to the Malays of the terrible consequences of being on the wrong side of history. As the author David Grann says, ¨History is a merciless judge¨. It may not take 50 years for the above scenario, or some elements of it, to play out. I am being generous with the timelines. Call it fiction if you wish, but the trends in our society and economy should give us reasons to pause and ask where we are heading as a country.

We tend to not appreciate something until it is gone. Let us not let that happen to our multiracial Malaysia. The Chinese and Indians came to Malaysia by an accident of history, as did the Malays.

The Chinese and Indians, through their blood and sweat, built the Malaysian economy, and the Malays have directly benefited from this. That is a fact even if the history books choose to not acknowledge it. Racial chauvinism rarely leads to good outcomes, and it will not for Malaysia. We still have an opportunity to come together to define the narrative for our collective future. Or we can leave it to self-interested bigots who have no interest in any future but their own, and suffer the consequences.

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