This article first appeared in The Edge Malaysia Weekly, on May 2 - 8, 2016.

The ongoing campaigning in the Sarawak state election revealed something that is rather familiar. Some politicians, being largely populists instead of statesmen, berated the state for being in the federation — of how Sarawak has been mistreated and how the agreement in forming Malaysia has not been honoured. And not forgetting the endless debate of when to celebrate Merdeka. It is not about the state of the federation but the pains of being in it.

I can understand the sentiment of not wanting the increasing racial and religious intolerance in parts of the peninsula to destabilise the situation in Sarawak, but such bigotry should be seen as a national issue that needs to be addressed, one where perhaps Sarawak can be a model to the nation.

Instead, the posture adopted does not reflect a sense of common destiny as a collective, but more like a disgruntled neighbour who is not pleased being in the neighbourhood and just wants to do his own thing. This sort of sentiment, emotional as it is, presumably has some mass appeal for politicians to use it at the appropriate times, but it reflects the incomplete state of this federation we call Malaysia.

The more damaging and seemingly un-Malaysian phenomenon is the increasing use of the provision in the Immigration Act by the state to prevent fellow Malaysians deemed undesirable from entering Sarawak. The fact that such a provision still exists and is enforced testifies to the deficient state of our union, and there seems to be a lack of leadership to sort this out, almost 60 years after we first formed this federation. What does it say about national integration and what sort of a federation do we have when there is no free movement of its citizens?

We are still debating whether Sabah and Sarawak joined the Federation of Malaya to form Malaysia or that 14 states came together to form Malaysia. In this process, it is sometimes ignored that the nine Malay states were themselves sovereign states when they initially formed the Federation of Malaya. Having decided on a federation, it is the interest of the federation that is supreme, above any particular state, and we should proceed on that basis.

These unresolved fundamental issues and the presence of many colonial-period legislation and institutions and vague “understandings” and “agreements” do not bode well for the preservation and, indeed, the future of the federation. These are preventing us from having a single narrative of being Malaysians; to bind us together while we are granted the freedom to individually pursue our interests and beliefs, and be different from each other.

In some significant ways, this disharmony can be traced to the lack of national institutions that developed collectively in the post-Merdeka period. We sort of postponed the necessary frank national conversation because there were always excuses for doing so — the perpetual threat to national security that started with the pre-Merdeka communist insurgency to international terrorists today. While the world has changed, many institutional psyches are still stuck in this sort of paradigm instead of embracing the new possibilities. The full promise of the constitution never materialised as we need the freedoms it guarantees to achieve it.

There are institutions that were created by Merdeka that have matured during the period since then. Bank Negara Malaysia is such an example. Its second governor, Tun Ismail Ali, was credited to have set the high standards of integrity and conduct that Bank Negara has upheld and built upon. Outgoing governor Tan Sri Dr Zeti Akhtar Aziz too has served with distinction, bringing the conduct of banking regulation and monetary policy to global standards during a period when monetary policy has gained prominence in macroeconomic management.

A class act, Zeti has also presided over the growth of the financial sector, both as an enterprise and as an economic sector, and in so doing, developed a more resilient economy. She will leave a lasting legacy through some key initiatives such as the Malaysia International Islamic Financial Centre and the Financial Sector Masterplan.

There are other post-Merdeka institutions that have done well, maturing over time and becoming pillars for the nation in inculcating a culture of excellence and national service. One can think of national oil corporation Petronas, government investment arm Khazanah Nasional Bhd, the Employees Provident Fund, the Securities Commission Malaysia and the nation’s biggest fund management company, Permodalan Nasional Bhd. Of course, there are also numerous institutions in the post-Merdeka period that have fared terribly or deteriorated over time.

We, however, still have many institutions that had their origins during colonial times, and they had a change of the guard during Merdeka. Some have evolved since Merdeka but their original design was meant for the British to rule us while protecting their economic and political interests as the main objectives.

The definition of rights and responsibilities is not that defined by a free people who decide on their own destiny. They have been some adaptation in some of these institutions and amendments to pre-Merdeka laws, but what is needed is a robust legislative process that brings together diverse views across the country.

That is why, in my view, the most stunted institution is one of the most important ones, Parliament, whose development and function could have addressed many of the issues to perfect this union of ours.

Parliament is both the legislative body that makes laws and, therefore, defines rights and boundaries of rights, and the supreme oversight institution in the country. A creature of Merdeka but colonial Malaya has had almost a hundred years of legislative history before that — where members were appointed instead of elected and the emphasis was on swift and efficient law making. Members are now elected but for the most part, despite the increasing rancour in Parliament, there is not much substantive change in the process of legislation.

There was a recent attempt by Parliament to reform itself, but the one thing that is meaningful in its proposal was not accepted — the formation of committees as part of enriching the legislative and oversight roles of Parliament. There is effectively only one select committee in Parliament today — the Public Accounts Committee. Without the committee system, legislation will not be participative and it will not extend beyond the concerns and machinations of partisan politics.

The economic logic of the economy too needs to be liberated. As an economist, I have never subscribed to the notion of economic transformation by doing more of the same big things. I am also averse to the notion of planning — a state function in managing an economy to affect microeconomic incentives in order to obtain macroeconomic outcomes. Such a planning notion goes back to the failed models of the socialist and communist economies and it inherently disempowers the individual, the source of creativity and innovation, the engine of growth and development.

Given the history of the country and the legacies we inherited from that colourful history, the real economic transformational change is to move away from the colonial-imposed plantation economy. The economics of plantation define a particular sort of relationship between land, labour and capital, and develops economic and political institutions that protect and propagate this relationship. While they have generated economic growth and created wealth, these plantation-based relationships and the institutions they create are holding us back from moving to the next level.

A national agenda that seeks to transform the country’s economy must, therefore, seek to move away from this plantation economy. It will need to redefine the role and value of labour in the economy’s production function, and while I am not quite a Marxian, I believe that changing economic relationships will change social and political relationships and institutions.

Therefore, if there is an indicator for economic transformation, it is the amount of plantation land in this country that has been converted to other uses. That one number will show that many right things have happened, which will lead to many other good new things happening.

To perfect this union, this federation we call home, we must have a common narrative of what it means to us. To do that, we must be able to have a conversation, even in disagreement and perhaps even in disgust, to discuss issues and develop excellent national institutions that live up to the precepts of the Rukunegara, defend our individual rights and protect our collective interests.

Dr Nungsari Radhi is an economist and managing director of Prokhas Sdn Bhd, a Ministry of Finance advisory company. The views expressed here are his own.

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