Thursday, 6 September 2007

Tunku is Malaysia’s most visionary PM

i Capital has always advised that besides knowing accounting and economics, an investor also needs to know history and philosophy well

THIS week, we take a walk down memory lane. i Capital will share with its readers some interesting but forgotten facts about the Malaysian Prime Minister who is or was the most visionary of all.

Most Malaysians, especially the younger ones, would give the wrong answer. As a socially responsible investment adviser, i Capital is duty bound to help set the record straight.

Malaysia’s most visionary Prime Minister is none other than the first Prime Minister, Tunku Abdul Rahman, who led the country from 1957 to 1970, when he was politically forced to step down.

Articles and history books will tell that he is known as the father of independence. There is no dispute about this. Based on this factor alone, Tunku should already be named as the most visionary Prime Minister. But there are more than this to justify giving him the title of the most visionary Malaysian Prime Minister.

Tunku was apparently forced out for giving too much to the non-Malays and neglecting the socio-economic interests of the Malays. Yet at the same time, the non-Malays were dissatisfied with the Government policies and attitude towards them under Tunku.

A giant poster showing the faces of the country’s five Prime Ministers being displayed at the Felda headquarters in Kuala Lumpur in conjunction with the 50th anniversary of independence. Felda, probably one of the most successful agricultural development schemes the world has seen, was created in 1956 under Tunku Abdul Rahman’s visionary economic policy – Bernama
This is usually what happens when a leader is a visionary and the voters cannot see that far or beyond their own narrow self-interest. Tunku was blamed for having economic policies that were too free market-oriented or too laissez faire. Again, the facts pointed the other way. Let us look at some of them:

·The Federal Land Development Authority (Felda), probably one of the most successful agricultural development schemes the world has seen, was created in 1956. In 1960, Felda opened up 10,500 acres of land.

By 1970, this grew to 308,400 acres and 20,700 families were settled on 90 schemes. One community has benefited a great deal from this scheme.

  • The Federal Agricultural Marketing Authority (Fama) was set up in 1965 to improve the marketing system and ensure that farmers obtain fair prices for their products.

  • Bank Pertanian Malaysia was formed in 1969 to provide credit facilities to farmers on reasonable terms.

  • The Malaysian Agricultural Research and Development Institute (Mardi) was established in 1968 to facilitate research into the potential of various agricultural crops.

  • Bank Bumiputra was set up as a commercial bank in 1965 with a focus on providing credit and banking facilities to the Malays and other indigenous people in commerce, industry and other economic activities.

  • Majlis Amanah Ra’ayat (Mara) was established in 1966.

  • Universiti Teknologi Mara started in 1956 as a rural training centre. It was renamed Mara College in 1965 with the mission of providing professional training for bumiputras. In 1967, it was renamed Mara Institute of Technology.

    All the above institutions are still around and were set up during Tunku’s time. Although the list is not exhaustive, it is obvious that Tunku was dead serious about improving the socio-economic conditions of the Malays and had the vision to launch the relevant institutions to achieve them.

    Four decades later, others are taking the credit for promoting the interest of the Malays.

    But the greatness of Tunku’s vision was not confined only to this as the Malaysian economy was already on the path of diversification and the economic base was broadening.

    The country’s dependence on rubber and tin was reduced quickly. Within six years, their share of total exports dropped to 53.8% in 1970 from 62.2% in 1965.

    Unknown to many Malaysians, the palm oil industry was already expanding rapidly in the 1960s. The area under palm oil surged to 665,000 acres in 1970 from 132,000 acres in 1960.

    Growth in timber production and exports during the 1960s exceeded all expectations. Production of plywood and crude petroleum also surged.

    In 1965, plywood production of plywood stood at 20.4 million sq ft. Two years later, it reached 93 million sq ft and by 1970, it ballooned to 304 million sq ft.

    Likewise, crude petroleum production surged to 845,000 tonnes in 1970 from 48,000 tonnes in 1960.

    Industrialisation was also beginning. Manufacturing output from 1961-65 grew 9.9% per annum and from 1966-70, it expanded 10.4% per annum. The share of manufacturing in gross domestic product (GDP) jumped to 13% by 1970 from 8.5% in 1960.

    At the same time, Malaysia’s trade balance was consistently in surplus. Inflation was hardly existent. Savings were able to finance investment. Even the Malaysian economy was ahead.

    To illustrate this, Malaysia's per capita income in 1968 was US$370 compared with US$190 in Thailand, US$60 in Indonesia, US$170 in South Korea and US$230 in the Philippines. Only Singapore achieved a higher per capita income of US$740.

  • In a fortnight, i Capital will continue with this topic by sharing Tunku’s great foresight.