THE pasar malam in Bayan Lepas,  where Penang Airport is located, takes place on Saturdays. I grew up right where the pasar malam is held every week, on a street about a kilometre long, with the entry to the airport on one end and the Pusat Kesihatan on the other end.

I lived near the clinic and my primary school was next to the airport, so this was also the route I took every day to go to school. Nostalgia and the search for dinner make me go there during weekends when I am in Penang.

There is a pasar malam somewhere every night within the district. It does not matter where you live, you can go to a pasar malam every night. The standard fare is typically divided between cooked food, fresh produce and clothing.

It used to be just cooked food but the traffic at the pasar malam attracted fresh produce traders, who sell vegetables, fruits, fish, beef and poultry. The pasar malam became the hypermarket for a segment of society when all kinds of clothing were also sold.

These weekly markets always attract a crowd. Nowadays, there is a distinct presence of migrant workers. It is a cosmopolitan crowd of Malaysians and foreign workers, which is reflected in the range of food and produce being sold. The pasar malam is a place of affordable variety for a heterogeneous group of consumers.

I know a number of these traders from my association with them over 20 years ago. Longevity, if not necessarily scalability, seems to be the measure of success. It confirms a successful business model, one that generates enough income to sustain a family and — for all the noise about house prices on Penang island — buy property in Penang. Pasar malam trading provides a real livelihood.

There are basically two classes of traders — the mobile full-time traders and the local part-timers. The local traders are individuals or new entrants in strictly family-run enteprises who are doing it part time. Whether they continue and scale up depends on market dictates: having the right product priced at a level that is competitive, yet yields a meaningful margin.

If they do, they will evolve into the second group — the full-time trader who operates at various pasar malam throughout the week, with a proven product and business model, and is likely to employ people and have his own transport.

The pasar malam phenomenon, after it emerged, has grown in the last three decades. Penang, for example, has 500 kampungs altogether, each governed by the local village committee, the lowest echelon of administration in Malaysia. It can be assumed that each of these committees will organise a weekly pasar malam somewhere in its jurisdiction.

The committees charge the traders a token fee, and in exchange, organise the logistics of the pasar malam and work with municipal services to clean up afterwards. In Sabah and Sarawak, it is organised slightly differently, but in the peninsula, it is all organised along these lines.

Statistics show that there are 9,755 kampungs in the peninsula, but there should be more pasar malam than there are kampungs in my view as there are urban pasar malam as well, organised by resident associations and the like. So, in aggregate, the pasar malam is a sizeable market and represents an important distribution channel for certain types of goods.

The emergence of the hypermarket may have killed off the traditional retail outlets — single stores selling specialised goods or even the general stores — but this hollowing out of the retail sector has been accompanied by the expansion “at the bottom”, so to speak. We now have hyper-retailers at one end and this distribution  channel — the pasar malam — at the bottom.

I am reminded of the book Fortune at the Bottom of the Pyramid, by CK Prahalad. His motivation was somewhat different but the points he made resonate when one thinks hard enough about pasar malam. Prahalad is right: there is wealth at the bottom of the pyramid. It is not for big firms and big capital to exploit this as he suggested, but it represents opportunities for those at the bottom to make a living and climb up the income ladder.

The sub-text to Prahalad’s book title is “eradicating poverty through profits”, and I am firmly with him in that there are more profits here than there is public largesse to be distributed to them, and that upward mobility is more likely and sustainable via the pursuit of profit via entrepreneurship.

This brings about the question of change, and of its direction. The pasar malam phenomenon and the drastic changes in the retail sector are barometers of change, of how living has changed at both the individual and societal levels.

The pasar malam is a world that constitutes people who live with the consequences of globalisation; they do not shape nor really benefit from access to enlarged global markets, but the livelihood of those who buy and sell at the Bayan Lepas pasar malam is shaped by capital flows that has turned the area into the largest agglomeration of electronics and electrical firms in Malaysia.

The government launched the 11th Malaysia Plan on May 21, the last five-year plan that will bring the nation towards 2020. We have been doing these five-year plans since Merdeka. That has not changed. These plans represent the federal government’s developmental expenditures — how these expenditures are allocated among what the government classifies as sectors — social, economic, security and the public sector.

The five-year plans are akin to a five-year capex plan for a firm. This presumes a clear medium-term direction and a long-term goal. A five-year plan can at most be a plan to implement a decided goal.

I wonder how this 11th Malaysia Plan will be different in response to a changing world. After so much government involvement in the economy, I am convinced that what is needed is the emergence of more domestic firms that can be competitive in the global marketplace. There is no shortage of opportunities or market access. What is in short supply is entrepreneurial energy.

In my view, this supply of genuine entrepreneurship will come from these small, even micro, businesses, pasar malam traders included. The entrepreneur class so desired by policy, showered with allocations and programmes and administered by so many government departments and agencies, will emerge from these traders and their subsequent generations instead.

This is a group that lives the independent life and understands what it means to strive to make a living. It is sometimes not pretty and life can be exacting and tough for them and their families, but I would bet on them to drive the next generation of businesses.

I am quite sure that the pasar malam phenomenon is not the creature of policy — some people did not sit down around a table 30 years ago in Kuala Lumpur and say, let’s create pasar malam all over the country as a crucible for entrepreneurship. Or, let’s create pasar malam as a distribution channel for locally produced goods. They just happened, buoyed by some economic logic and propelled by the right dynamics on the ground.

That this pasar malam phenomenon took place while the retail sector itself was undergoing major shifts, especially the emergence of super-efficient hypermarkets, also says something about the kind of development the country has gone through. That the pasar malam fills a big void in our society says a lot about the levels and distribution of income in our development story.

So , back to five-year plans and planning.

If the economy is a forest and economic planners believe they can plan a thriving forest, then my advice to them to acknowledge that the forest that is already there today happened in spite of their efforts. Humility should convince the planners that they should not select what trees to grow in the forest, which trees to favour and which to ignore.

Planners should therefore focus on ensuring the soil in the forest is fertile and that there are water sources — and keeping these resources and the environment unpolluted. Let the dynamics of the forest decide largely what trees will grow but protect the forest from pests and transgressions of the commons.

And since a thriving forest is a diverse one, planners can intervene to add variety but that should be done judiciously, recognising the eco-system the forest is in. Planting fir in a tropical forest is folly, just as building an igloo in a desert is a waste of resources.

The final lesson from pasar malam is that there should be social safety nets underneath these entrepreneurial endeavours, and that these public programmes should focus on children and on mothers with dependants and the handicapped. Everyone else can have a go at life, beginning at the pasar malam.

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.

This article first appeared in Forum, The Edge Malaysia Weekly, on May 25 - 31, 2015.

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