Economic Sustainability

Okay. So I'm still sort of muddling through Anwar Ibrahim's script manifesto for a better Malaysia, and this effort is sort of hindered both by my own time restraints and by the continuous repetition of buzzwords in the text, makes it a little bit difficult for me to read. I mean, he says the word sustainable so many times that it's just unsustainable. But here is one thing that I liked. He says, we must recalibrate the markers of economic progress to focus more on the Gini coefficient than on GDP.

The Gini coefficient, if you don't know, sort of measures the wealth gap in a country. So he's suggesting that this rather than the GDP should be a marker of economic progress. Meaning, the more you reduce the disparity in incomes, the more progress you're making. Now the reason I like this is just mostly because I agree that more factors need to be considered in determining whether or not an economy is healthy more than just the GDP, which doesn't actually tell you anything about the economy's overall health. However, I would say that in my opinion, the disparity issue is kind of a phony issue.

There's always going to be disparities. There's always going to be income disparities in any society. There's no reason why there wouldn't be. Income equality is not a rational goal. That's sort of a communistic delusion.

The main issue for me is not how much more money do the rich have than the poor. The issue is are the poor able to survive? Are they able to subsist with health and dignity on the incomes that they have? And another issue is, are they trapped in poverty? Now in terms of income disparity, income inequality, to me that only matters within the context of any given company.

In other words, does the CEO of the company get paid 500 times more than the lowest paid worker. This actually matters because the wages of the lowest paid workers may be kept inappropriately low. The prices the consumer prices of the goods that are produced by that company may be kept inappropriately high, and the operational expenses of the company may be inappropriately channeled away from productive activities just so that the CEOs and the executive salaries can be kept inappropriately high. So you should apply the Gini coefficient to the salary structure of businesses. Like say for example, you could regulate that a CEO is not allowed to get paid more than say 50 times more than the lowest paid worker.

So you're not actually putting a cap on CEO salaries, you're putting a cap on the disparity ratio that any company can tolerate. But when you're talking about society in general, I don't think disparity is really the the right issue. Poverty is the issue. Let me just get back to this issue of sustainability because it appears time and time again in Anwar's manifesto and it's a buzzword that everybody uses. Now the the policies that I just mentioned, the regulations that I just mentioned about restraining the huge disparities in pay packages within a company, That's a sustainable policy.

That's a sustainable business policy. It's better for efficiency. It's better for, worker commitment and loyalty, and it's better for the overall productive use of earnings. That's a sustainable policy. But if you're talking about society in general, in my opinion, you have basically two fundamental pillars of sustainability for any society, food security and self sufficiency or economic independence.

Not much else matters, to be honest. Forget about carbon footprints. Take it from me. The minute they financialized carbon emissions, that meant no one is taking climate change seriously. It's just another game in the casino.

So, no, I wouldn't personally advise any government, certainly not in the developing world in the global South, to radically overhaul their whole societies just to make them green and in the process completely undermine your ability to industrialize and also go into debt so that you can finance ridiculous absurd renovations on existing buildings to make them more sustainable or whatever word you wanna use. That's just ridiculous in my opinion. I mean, gradual steps to incrementally wean yourself off of fossil fuels to start using renewables as you are able. That's fine. But again, I don't see that this should be an urgent issue for a country like Malaysia at all.

But here's the thing about food security and economic independence or self sufficiency. It's going to entail sacrifice and an inevitable economic slowdown, but the outcome will be real sustainability. Because what this means is delinking from the West as much as possible, reducing both imports and exports, and concentrating on production for domestic consumption. Let Malaysia produce what Malaysia needs. And if you export, then export only surplus.

And reduce as much as possible the importation of necessities by producing those necessities yourself. And if you have natural resources that you don't currently have the capacity to extract without foreign knowledge, know how, and technology, then those resources are just gonna have to stay in the ground until you get the knowledge and you have the know how and you have the technology to extract those resources yourself. They just have to stay in the ground. Now if foreign companies do want to help you with extraction, then you can just pay them for the service of extracting the resources, but that doesn't give them any ownership whatsoever of the resources that they help to extract. Did you know that in Egypt, Apache Energy, an oil company, automatically claims ownership of 50% of any oil that they extract.

That's outrageous. If I if I dig a well for you, does that give me ownership of 50% of the water that that well produces? No. That's absurd. You just pay them for the service.

You brought your machinery. You brought your equipment. You have the knowledge. You have the know how. You have the skills.

I will pay you for that, but that doesn't give you ownership of what of the resources that you're extracting. I mean, in Egypt, if you wanna buy the oil in Egypt, then buy the oil. We can you can sell it to them. That's fine. But you don't own it just because you helped to bring it out of the ground.

It's not yours. Not 50%, not 25%, not 10%, not 1%. You get paid for the work you did. That's fair. But it's unfair for you to now claim ownership of any of the resources that you extracted.

Just like if I if I build your house, do I get to live in it? Look. The reality is that for any country to achieve real economic sustainability, it basically has to operate as if it is under comprehensive economic sanctions with no access to or from global markets. Of course, I'm not suggesting that such a radical shift in the way you think about the economy is something that you should do all at once. It shouldn't be undertaken all at once, but it should be at least the guiding principle of how you manage the economy.

For example, forget the mantra that the solution is always to increase FDI, foreign direct investment. I mean, you understand that the logic of FDI is that more money flows out of the country than is ever invested into it. That's how investment works. Foreign investment is a tool of wealth extraction. No more, no less.

Now I'm not saying obviously that that means you should forbid all foreign investment. No. It just means that instead of placing conditions on the domestic business environment in order to make it more attractive to foreign investors, instead of doing that, you apply conditions upon foreign investors that will be beneficial for the domestic economy. And if they don't like it, if they don't wanna come, then they don't come. Look.

You have to understand that the global North, the West subsists on the resources, both natural and human resources of the global South. Whether you know it or not, you have the upper hand to negotiate the terms of trade and investment. They have nowhere else to go for what they need. But, like, say for example, in terms of manufacturing, if you if your country I'm not talking about Malaysia specifically now, just generally. If your country can only the only role that they can have in manufacturing is as a subcontractor for multinational corporations, then let someone else do it.

Let someone else let some other country suppress wages in order to meet the cheap labor needs of multinational corporations. Let some other country make their economy dependent upon unstable supply chains that can be withdrawn or shifted or changed at any moment. While instead of doing that, you concentrate on developing your industrial capacity so that you can become the main manufacturer instead of a subcontractor. Again, all of this takes time, it takes sacrifice, it takes patience, but this is how you can truly build a sustainable economy. Of course, none of this precludes, making trade deals and agreements and partnerships with other nations in the global South, with other developing countries, with other Muslim countries, as well as regional partnerships.

But the guiding principle really has to be to eliminate as much as possible the necessity of interconnectedness with other economies. The guiding principle has to be to reach the point where trade is not obligatory for your economic survival. You should be self sufficient producing what you consume, consuming what you produce. Look, the train of western neoliberal capitalism is speeding towards the side of a mountain. So don't be impressed by the speed.

Don't think that they must be going in the right direction because they're moving so fast. Decouple, detach your compartment, detach your country from that train. Yes. That means you will slow down, but ultimately, it will save you from destruction.