Laissez-faire versus Strict Control of Political Finance: Hegemonic Parties and Developmental States in Malaysia and Singapore

ABSTRACT

This article compares the financing of political parties and candidates in two Southeast Asian countries. In Malaysia, some political finance regulations exist only on paper, and political financing is for the most part not restrained at all. In contrast, the financing of candidates and parties has always been tightly circumscribed in Singapore. These different strategies, “laissez-faire” versus “strict control,” are the consequence of various factors. In Malaysia, the New Economic Policy has effected a close, often economically unproductive linkage between the state, the ruling Barisan Nasional coalition, and business. The rise of businesspeople has resulted in the commercialization of competition within (the United Malays National Organisation. Additionally, increasing competition between the ruling coalition and the opposition has resulted in growing expenditures for electioneering in the form of advertisements and electoral patronage. The laissez-faire style of regulation has been compounded by the difficult-to-control practices in East Malaysia (Sabah and Sarawak), where vote buying, electoral patronage based on the largesse of oligarchs, and obvious nonobservance of the rules have been typical. In contrast to Malaysia as a whole, the costs for parties and candidates are still relatively low in Singapore. As a cadre party, the PAP (People's Action Party) is relatively autonomous from private business interests, and intraparty competition is not commercialized; the developmentalist state is highly productive, and the ties between the state, the PAP, and business are not characterized by cronyism. Moreover, electioneering is not very commercialized because the opposition is still relatively weak.     

从中国妇女受辱案看马来西亚华文报的历史责任

本文以中国女子受辱事件为观察对象,论述了马来西亚华文报纸的特点与功能,指出它们具有高度的新闻职业精神、履行华人喉舌职能、维护华人权益和帮助政府改善施政等特点。     

Opting for Openness: Capital Mobility and Monetary Sterilisation in Malaysia

Malaysia gained attention for its use of capital controls in 1998, but since the early 2000s it has emphasised its commitment to an open capital account, despite experiencing volatile capital flows. As well as opting for financial openness, Malaysia chose to manage the value of its exchange rate after de-pegging from the US dollar in 2005. In a bid to escape the macroeconomic constraints that arise from capital mobility, Malaysia also chose to sterilise a large portion of capital inflows. It then made a further choice to use market-based sterilisation instruments more than regulatory sterilisation measures. These choices have carried costs and led to a build-up of economic risk. Three interrelated factors explain these choices: Malaysia’s strategy to manage the stigma arising from its imposition of controls in 1998, the increased level of financial integration that followed from this strategy, and the politically privileged position of groups that have benefitted from Malaysia’s commitment to capital openness.     

Politics,Economic Crises and Corporate Governance Reforms: Regulatory Capture in Malaysia

Following the 1997 Asian financial crisis, the regulatory system involving governance of the corporate sector was subjected to major legislative and institutional reforms, primarily in response to exposures of serious cases of corruption and abuse in the financial sector by well-connected businesspeople. However, the 2008 global financial crisis indicated continued occurrence of irresponsible forms of corporate development and practices, underscoring structural weaknesses within the regulatory system in spite of these reforms. This article argues that the reforms that had been introduced ignored how state-business nexuses shape the way firms operate, a core reason for the persistence of unproductive and speculative forms of corporate development, grand corruption and cronyism. Utilising Malaysia as a case study, this article indicates that institutional reforms involving devolution of power to regulatory institutions are imperative to provide them with the autonomy to objectively institute prudential controls and indict errant firms that violate legislation overseeing corporate activities.     

Affirmative Action in Malaysia: Education and Employment Outcomes since the 1990s

Abstract

An important element of Malaysia's affirmative action regime has been to expand tertiary education access and upper-level occupational opportunities for the Bumiputera beneficiary group. However, the momentum of change has dwindled in recent years; Bumiputera representation in managerial and professional positions remained fairly static across 1995-2005. This paper provides a framework for conceptualising affirmative action and outlines Malaysia's affirmative action programmes in education and employment. It compiles evidence of affirmative action outcomes from official publications and various surveys, and derives new information from census data. Tertiary education quantitatively burgeoned from the 1990s, but the growing importance of educational quality adversely affects Bumiputera graduates, who predominantly enrol in less regarded domestic public institutes. In addition, Bumiputera continue to rely heavily on the public sector for employment in managerial and professional positions. The findings demonstrate a critical need to arrest the quality decline in public education and to judiciously modify affirmative action programmes.     

浅析马来西亚的农村发展政策与战略

农村的发展在马来西亚经济以及社会、政治的发展中都占有很重要的地位.马来西亚农村的基本特点包括贫困率高、生产率低、缺乏最基本的经济和社会福利设施以及市场不发达等.马来西亚农村经济是以农业为基础的,所以以农村改革为主的马来西亚农村发展政策一直都是农村经济结构转型和消除农村贫困的主要政策工具.自独立以来马来西亚的农村发展取得了很大的成就,但是农村贫困问题以及部门之间和部门内部的发展不平衡问题仍然比较突出.因此,到今天农村的发展依然是马来西亚经济发展的重要内容.     

The Rise and Fall of the Jewish/Left Alliance: An Historical and Political Analysis

The disproportionate historical involvement of Jews in the political Left is well known. However, far less attention has been paid to the political and ideological factors which attracted Jews to the Left. This article attributes Jewish support for the Left to both class and ethnic considerations. Poverty and anti-Semitism influenced Jews to join a movement which promised to end capitalist and racial oppression. However, following the Holocaust and the creation of the State of Israel, many Jews lost their faith in universalisticsolutions, and switched their commitment from international to nationalist force. Nevertheless, lingering links between Jews and the Left continue to exist to this day.     

Diversity of Southeast Asian Capitalisms: Evolving State-Business Relations in Malaysia

ABSTRACT

Empirical gaps exist in the literature about diverse forms of capitalism. The first is thematic, involving the incomplete institutional and political account of how the state can, through a series of policies, shape the development of domestic enterprises. The second gap is regional in nature: this literature does not deal with the historical development of firms that have played a central role in industrialising Southeast Asia. One reason for this is that since most existing theories are based on Western contexts, they are theoretically ill-equipped to deal with the concepts of power and state-business nexuses when the political system is not democratic in nature. But state-business ties, where politicians in power distribute government-generated rents on a selective basis, have resulted in diverse business systems such as highly diversified conglomerates, state-owned companies and small- and medium-scale enterprises. This article deals with these theoretical and empirical gaps. To better understand the nature and implications of evolving state-business ties in Southeast Asia, this topic is examined through the lens of regulation theory. To appreciate the complexity and implications of state-business configurations on the political system and forms of enterprise development, a case study of Malaysia is provided.     

The Politics of Chaebol Reform in Korea: Social Cleavage and New Financial Rules

Korea's developmental state had long maintained the principle of “separation between industrial capital and financial capital,” whereby the nation's industrial conglomerates – the chaebol – were restricted from having controlling ownership of financial institutions, especially banks. The financial crisis of 1997-98 renewed calls for regulating the chaebol, especially in terms of reinforcing corporate governance and competition policy. This process was supported and promoted by vibrant non-governmental organisations led by progressive activists who forged an effective alliance with the government and the ruling party whose platform followed a populist course. The reform movement has been resisted with equal fervour by conservative elements, led by the opposition party, chaebol-supported think tanks, and the conservative media. This cleavage is evident in the case of a pending legislation on chaebol ownership of financial institutions, the Financial Industry Structure Law. The controversy over this proposed law demonstrates that the contemporary chaebol reforms are deeply politicised. It also illustrates the path-dependent nature of the government-chaebol relationship.     

Huawei and ZTE in Malaysia: The Localisation of Chinese Transnational Enterprises

ABSTRACT

While much research has been undertaken on firms’ internationalisation, much less has been written on internationalisation’s other side, localisation. Yet with the rise of emerging economies, especially Chinese transnational corporations, localisation has become an increasingly significant. This article examines the localisation experience of two Chinese telecommunications enterprises – Huawei and ZTE – in Malaysia. By holding these factors constant (the ceteris paribus assumption), several dimensions of localisation are revealed. They are product, workforce, technology, organisation and management. Firm-specific factors matter both in accounting for inter-firm similarities and differences in the manner they localised. Enterprise ownership is also important in explaining firm performance and host countries’ perception of these firms. Leadership styles of these enterprises’ founders also matter. Together, these factors affect the differential pace of firms’ internationalisation and localisation.     

对立与合作:马来西亚华人政党与伊斯兰党关系的演变

20世纪80年代以来,马来西亚政治的主导因素是种族政治和伊斯兰政治化,伊斯兰党崛起成为主要反对党之一.华人政党马华公会和民政党对伊斯兰党坚决反对;行动党对伊斯兰党的态度是在反对和合作中反复,为了建立公正和民主的马来西亚,行动党与伊斯兰党合作,但因为伊斯兰教国问题,行动党与其决裂.华人政党与伊斯兰党关系的变化,影响到马来西亚的种族关系、种族政治和伊斯兰政治化.     

Political Finance Regimes in Southeast Asia: Introduction

ABSTRACT

The three articles in this themed collection investigate the interplay between political finance regimes and the quality of democracy in Southeast Asia. Andreas Ufen's piece on political finance in Malaysia and Singapore argues that the semi-authoritarian regimes in both states have blocked the reform of campaign and party funding regulations in order to keep their opposition in check. The article on Indonesia, authored by Marcus Mietzner, showcases the country's dysfunctional political finance system as a major hurdle toward further democratization. In their contribution on Thailand, Napisa Waitoolkiat and Paul Chambers show that weak political finance regulations have contributed significantly to the shallowness of Thai parties. Overall, the collection demonstrates that without meaningful political finance reforms, Southeast Asia's democratic stagnation is likely to persist for many years to come.     

Debating Economic Democracy in South Korea: The Costs of Commensurability

ABSTRACT:

In the 2012 Korean presidential election, both liberal and conservative parties fought their campaigns on the slogan of “economic democratization,” marking a strong departure from past presidential elections and the growth-first policies of the then-incumbent conservative administration. Both parties pledged to tackle growing social polarization and the concentration of economic power by reforming the corporate governance of Korea's large, family-led conglomerates (chaebol), to the degree that chaebol reform itself became synonymous with economic democratization. This focus led to a series of heated exchanges among liberal-left reformers about the vision of economic democratization being promoted, with one camp favoring the creation of a “fair market” through the restructuring of the chaebol and another promoting the protection of the chaebol’s management rights over their affiliates as a desirable strategy for the creation of a Korean welfare state. This essay examines the long-standing tensions between these two liberal-left perspectives and argues that the capital-centric and market-based visions these camps promoted risk confining intellectual debate over the meaning of economic democracy within boundaries that serve dominant political interests.     

Korea and Taiwan: The Crisis of Investment-Led Growth and the End of the Developmental State

A defining feature of the Northeast Asian developmental state was a focus on maximising investment and suppressing growth in consumption. While consistently high rates of investment were an integral part of the growth model, as the South Korean and Taiwanese economies matured, the viability of this model was undermined by the inability of these economies to generate sufficient opportunities for profitable investment. At the same time, the legacies of systems of labour control associated with the developmental state have impeded the development of stable wage-led growth regimes in both political economies. Instead, they have become reliant on an unstable combination of current account surpluses and consumer borrowing to sustain growth. The legacies of the developmental state continue to define many aspects of the political-economic landscape in Korea and Taiwan. However, changes in the growth regimes, the reorientation of the financial sectors from corporate to household lending, and the downgrading of industrial policy mean that it is no longer useful to define Korea or Taiwan as developmental states. Instead, contemporary Korea and Taiwan can be best understood as post-developmental states.     

马来西亚政府金融干预的经验与启示

本文主要探讨马来西亚政府对金融部门的干预措施及其对社会经济发展的作用。马来西亚政府的金融干预政策在促进本国金融深化、推动社会均衡发展方面成效显著;但在支持本国支柱产业的建设、促进工业化进程方面效果欠佳。这主要与马金融体制的局限性及其金融租金的分配有关。马政府对金融部门干预的实践给中国及其他发展中国家提供不少有益的启示。     

集团博弈与公共利益--以马来西亚政治为例的研究

作为公共利益的具体表现,无论是马来西亚的法律制度,还是其经济社会发展政策,都是一种利益博弈的结果.博弈的规则、利益集团的力量大小、策略选择是否得当都对博弈的结果即公共利益的形成具有重要影响,其中博弈规则的影响最为关键.在既定规则下,作为一个利益集团,要想在利益博弈中,尽可能取得较多的利益,必须尽可能加强自己的力量,在博弈过程中,采取理性的策略,否则可能会一招不慎,满盘皆输,自己集团的利益在制度或政策(公共利益的具体体现)中也难以得到照顾.     

Resisting the Fall: The Single Dominant Party,Policies and Elections in Malaysia

Before Malaysia’s 2013 general election, one of the few remaining dominant coalitions in the world was aware it would struggle to retain power. A fledgling opposition coalition had inspired public confidence of its capacity to competently rule while public discontent with the ruling party was rife due to the ubiquity of patronage that had prevented the responsible implementation of policies. However, regime change did not occur. How does the protracted rule of Malaysia’s Barisan Nasional coalition, and the hegemonic party in it, the United Malays National Organisation, relate to debates over authoritarian durability, during a period when dominant parties struggle to sustain power? Malaysian elections have been free enough that the opposition has been able to obtain and retain control of state governments, so why has Barisan Nasional not lost power? This article reviews the 2013 election examining three issues: the significance of coalition politics; how policies have shaped voting trends; and the growing monetisation of politics. These perspectives provide insights into the institutional structure of coalitions and their conduct of politics, including clientelistic practices, forms of mobilisation and governance and the outcomes of policies introduced to address socio-economic inequities and drive economic growth.     

Corporate raiding and the role of the state in Russia

To what extent are Russian state agencies involved in predatory behavior, and what are the determinants of their activities? Analyzing a novel data-set comprising 312 cases of illegal corporate raiding (reyderstvo) between 1999 and 2010, this article identifies a shift both in the regional and sectoral distribution of raids over time, as well as an increasing participation of state agencies in criminal raiding attacks. Using panel regression analysis to look at the determinants of increasing state involvement, this article shows that election results for the ruling president and his party, as well as the degree to which elections are manipulated throughout Russia's regions, are significantly and positively correlated with the number of raids in a given region, while regions with governors that have stronger local ties are characterized by a smaller number of attacks. A potential interpretation of these findings is that the federal center may tolerate a certain degree of predatory activities by regional elites, as long as these elites are able to deliver a sufficiently high level of electoral support for the center, with the effect being weaker in regions where the governor is interested in the long-term development of the regional economy.