South-East Asian economies are still stuck in the old mindset, with family-owned businesses a symptom of a failed political-economic culture based on relationships forged in the colonial era.
Joe Studwell, editor of China Economic Quarterly, said Malaysia and other South-East Asian mations had fundamentally failed to escape from the shackles of colonialism because their political and economic elites continued to work together in a relationship that did not engender entrepreneurship and innovations.
In these countries, he said, the post-independent period saw a shift in the ties between indigenous political elites to the non-indigenous largely Chinese economic elites from largely European economic elites before.
"Indigenous elites, such as Suharto, Ferdinand Marcos and Mahathir Mohamed, have also perpetrated the Victorian belief that their non Chinese citizens do not possess this experience or entrepreneurial spirit to run successful businesses," he said, referring to tracts from Dr. Mahathir's The Malay Dillemma as examples.
Studwell said this had led to a lower growth trajectory compared with Japan, South Korea and Taiwan. "In South-East Asia, economic elites are distributed economic rents in which the conditionality is not there, such as how these rents can contribute to the meaningful development of a country's economy via export or the creation of global companies," he said.
Japan, South Korea and Taiwan, in which there were also family-run businesses, had done much better than South-East Asian economiess in terms of gross domestic product per capita due to their much clearer industrial policies and emphasis on export oriented industries.
"In instances where preferences or subsidises have been given, it was with conditions attached, such as building up industries that are export oriented or technologically innovative," he said, adding that Japan and South Korea had many companies whose name and products were well-known the world over, which was not the case in South-East Asia.
Studwell said the future for South-East Asia was bleak due to the entrenched interests and the way it had become an obstacle to the future growth of the region. "South-East Asia may just wallow in the lower to medium income bracket going forward due to this essentially political failure," he said. Extracted from The Star Perhaps i should continue where Mr Studwell left off. Then came the shift in the 80s where the indigenous political elites created their version of indigenous economic elites by professing the one-sided National Economic Policy and the Malay supremacy propagandas through the pretense of promoting entrepreneurship among the indigenous. What clearly happened was that there was a shift from Chinese economic elites to indigenous economic elites through suppression where the shift was confined to a small group of 'so-called' indigenous economic elites namely the 'umnoputra' elites. Most major contracts by the government were given to these elites. As Studwell put it, it became sort of family-owned in terms of collaboration between political elites and economic elites of the same kind. And this is the kind of relationship that bring about Corruption. So there was no promotion of real Entrepreneurship, only a false sense of entrepreneurship was created. That more or less explains the sorry state our country is in now despite being endowed with rich natural resources. The present administration (a by-product from previous administration) remains clueless on how to move away from these destructive acts. The true fact is that our country's future remains bleak with worrying consequences.