Lack of ethic causes unhealthy growth

(缺乏道德伦理 不健康增长代价大)
夏伟文 & 陈薛卉 (30 Nov 2015)

European’s Industrial Revolution between 1760 and 1840 was sparked by Renaissance in the 15^th to 17^th century. Renaissance encompassed vast reformation and improvement in all non-economy aspects, which are humanism (moral philosophy, poetry, rhetoric and history), art (including architectural design), science and music. It also involved reformation of religion thoughts especially from merely “God-after life” centric to “self awareness-current life” centric. Subsequently, improvement in all these aspects helped boost remarkable progress in economy and income growth.

Japan’s economic revival after World War II destruction was due to strong nationalism and work ethics. Marx Weber credited strong economy in Northern Europe to Protestant Ethic of Calvinism and its “Spirit of Capitalism”. History has preceding thought that economic growth (and its subsequent high income) are enable by strong fundamental of non-economic aspects, particularly social, moral and ethic. Thus, it is weird that Malaysia’s contemporary economic goals merely has income growth (material wealth) as its target and forgotten the non-material wealth aspects.

Voiceless and Rootless Growth

Anwar Ibrahim in his book The Asian Renaissance (1996: 81) believed that economic growth is necessary but the issue is what kind of growth. He highlighted five types of growth with negative consequences to be avoided as identified in the Human Development Report 1996. They are “jobless growth” where economics growth does not come with expansion of employment opportunities, “ruthless growth” in which the fruits of economics growth mostly benefit the rich, “voiceless growth”, which does not empowered people but silences alternative voices, “rootless growth” that causes the people’s cultural identity to wither and “futureless growth”, where the present generation squanders the resources needed by future generations.

Malaysia’s growth is now going towards “voiceless” and “rootless”, results from over focused on material richness and internal political malady. Use (or misused) of Sedition Act and Security Offences (Special Measures) Act 2012 to the extent of preventing criticism to ruling government  greatly eroded Malaysia’s richness in freedom of speech. Over-developed with infrastructure projects, skyscrapers, shop lots and new industrial areas could endanger cultural heritage as well as richness in environment, flora and fauna. Individual citizen’s desire on getting higher and higher income brings inevitable negative consequences including less friendship value, erosion of filial piety value, late marriage, fail love relationship or domestic violent due to money matters, less time for exercise and higher crime rate. We gain income richness but loss other non-material richness.

Two famous development economists, Michael Todaro & Stephan Smith in their Economic Development textbook (2014) identified three core values of development, which are “sustenance”, “self-esteem” and “freedom from servitude”. “Sustenance” refers to the ability to meet basic needs needed for everyday living such as food, shelter, health and protection. In general, Malaysia has already fulfilled the basic of “sustenance” for majority of its citizen. In addition, ETP and other economic policy do emphasis fairer distribution of economic wealth as one of its objective. Yet, what planning may be different from actual implementation. Little Napoleons in public bureaucracy can divert noble objectives in national economic and social plans.

In term of “sustenance”, Malaysia does achieve satisfactory results. Table 1 shows some comparison between Malaysia and ASEAN-5, developed Asian countries (Japan, South Korea and Hong Kong) and few other developed countries. Carbon dioxide (CO2) emission (proxy for environment), vulnerable employment (social economy welfare), Life expectancy (health) and GDP per capita (income richness) are used as comparative indicators.

Table 1: Comparative Condition: Environment, Employment and Health

Country	CO2 emissions (kg per PPP $ of GDP)		Vulnerable employment (% of total employment)	Life expectancy at birth, total (years)
Malaysia	0.39		21.44	74.33
ASEAN-5
Indonesia	0.23		62.00	69.92
Singapore	0.06		9.76	81.15
Thailand	0.36		53.22	73.55
Philippines	0.16		42.52	68.08
Developed Asia
Japan	0.28		10.65	82.69
Korea, Rep.	0.37		25.00	80.20
Hong Kong	0.12		7.00	82.78
Other developed countries
Australia	0.42		9.15	81.56
Germany	0.24		6.90	79.97
United Kingdom	0.22		10.96	80.09
France	0.16		6.66	81.50

(Data source: World Bank, 2015)

Malaysia’s development conditions relative to other countries. Overall, Malaysia has lower vulnerable employment than South Korea and all ASEAN-5 countries except Singapore. This implies moderate social economic condition with plenty of room for improvement for Malaysia. Nonetheless, Malaysia has a very bad environment condition. Malaysia’s carbon dioxide (CO2) emission per Gross Domestic Product (GDP, measured by purchasing power parity) is relatively higher than all selected countries except Australia. Note that haze pollution is not considered in this data, which come from “stemming from the burning of fossil fuels and the manufacture of cement, include carbon dioxide produced during consumption of solid, liquid, and gas fuels and gas flaring”. Haze originated from Indonesia is like an annual occurrence. It not only jeopardizes contribution of tourism and palm oil to GDP growth but a serious health hazard that income growth cannot compensate.

Malaysia is also has relatively higher life expectancy than all ASEAN-5 except Singapore but lower than all selected developed countries. Indeed, Singapore serves as a good benchmark for Malaysia to strive forward. Unfortunately, it seems that authorities and politicians in Malaysia tend to compare our social economic level to less developed countries. This prompts question that are we looking backward?

“Self-esteem” is seen as a sense of worth and self-respect, or not being used as a tool by others for their own ends. Raising levels of living through higher income, more employments, could serve to enhance material well-being but better education, healthcare and greater attention to cultural and human values also needed to generate greater individual and national self-esteem.

“Freedom from servitude” associated with human freedom and ability to choose. This core development is the most lacking part in Malaysia. Is it due to over-emphasis of stability and high income? Do Malaysians need to obediently live like a bird in the cage in order to get luxury feeding and protection from predator?

Table 2: Variety Indexes on Freedom

Country	(1) Freedom Index 2012	(2) Index of Economic Freedom 2015	(3) World Press Freedom Index 2014 (Ranking)
Malaysia	6.43	70.8	147
ASEAN-5
Indonesia	6.96	58.1	132
Singapore	7.79	89.4	150
Thailand	6.73	62.4	130
Philippines	7.02	62.2	149
Developed Asia
Japan	8.14	73.3	59
Korea, Rep.	8.03	71.5	57
Hong Kong	9.04	89.6	61
Australia	8.55	81.4	28
Germany	8.45	73.8	14
United Kingdom	8.51	75.8	33
United States	8.26	76.2	46
France	7.97	62.5	39
Source (year)	Cato Institute	The Heritage Foundation / Wall Street Journal	Reporters Without Borders (total 180 countries)

Source: (1) Cato Institute at www.cato.org/human-freedom-index; (2) The Heritage Foundation / Wall Street Journal at http://www.heritage.org/index/download; (3) Reporters Without Borders at https://rsf.org/index2014/en-index2014.php

Basedon Table 2, Malaysia has lowest Freedom Index and second lowest ranking for World Press Freedom Index. Malaysia’s economic freedom is higher than Indonesia, Thailand and Philippines but lower than Singapore (similar comparative trend) and all other developed countries except France.  When Malaysia moving forward to high income, do we need to scarify freedom? Well, at least Singapore who three ranks lower than Malaysia looks comfortable with their restricted press freedom.

Danger of No Greed

Over greediness is harmful for inclusive growth (equality) and sustainability. However, lack of greed is also no good. From the economics perspectives, at least one person claim “yes, greed is good” – Adam Smith of the classic school. Through his theory of invisible hand, market can achieve efficiency when consumers and producers try to be greedy by maximizing their utility and profit respectively. Despite ‘promoting’ greed is good, Adam Smith’s idea of free market is actually originated from his Theory of Moral Sentiments that uphold moral value in society and economics. This actually supported call for “balance between reward for constructive greed and restriction by moral responsibility”.

A Professor once shared her experience on evaluation of a government’s program to help the poor villagers in remote area of Sabah. The aims of the program are noble, which are gave the villagers there young livestock (chicken, goat and cow) to rear and paddy seeds to plant. It ended with villagers finishing those livestock and planted the paddy at nowhere. Yet, they retained the last portion for the visiting officers who came to evaluate them. Those villagers were happy to live a simple life.

Friends doing social-economic surveys were shocked that rural residents were very happy with their simple (but financially poor) life. Those rural residents biggest dream may be just to buy a new motorcycle. Their best, farthest or dream destination to visit is merely a local tourist spot.

Greedy to get everything for personal benefit is not advisable but have some acceptable level of greed to dream big is one of the key for success and progress. Big dream (not the classic daydream tale of Mat Jenin) stimulates progress for individual and growth for the country.

Conclusion

Economic growth is like a holy grail to every nation. However, wrong direction of growth towards voiceless, rootless and greedy paths will lead us to darkness. Narrowing our growth target to high income can lead us to those dark directions. In contrast, widening the growth target to include variety of people welfare (non-material wealth) is like dispersing the fogs that blind our true path to noble economy.

[Chinese version published at 南洋商报经济周刊 Nanyang Press – Business News, page A7 on 3th November 2015. Available online at http://www.nanyang.com/node/736612. This English version may be slightly different from the Chinese online/printed newspaper version]