The Fallacies of and Reassessing Government-Linked Companies

February 20th, 2018

The Fallacies of and Reassessing GLCs

M. Bakri Musa 

Commercial activity on the part of the ruler is harmful to his subjects and ruinous to the tax revenue.
Ibn Khaldun (1332-1406)

The government’s preferred route for spearheading Malay participation in commerce is through establishing Government-Linked Companies (GLCs). The fundamental question is whether this is the most efficient route or are there better alternatives that could supplement or even supplant these GLCs.

As discussed earlier, it takes more than just money to start an enterprise. Equally if not more important is the human, as well as social capital. Enhancing human capital requires improving our education as well as healthcare systems. As for social capital, the World Bank defines it best: “…[T]he institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions. …[S]ocial cohesion is critical for societies to prosper economically and for development to be sustainable. Social capital is not just the sum of the institutions which underpin a society – it is the glue that holds them together.”

GLCs consume inordinate amounts of our leaders’ attention, gobble up huge sums of public funds, and employ the bulk of our premium Malay talent. GLCs are also major players in the economy and marketplace. And as demonstrated by the 1MDB fiasco, also a major source of corruption.

There has been an accelerating proliferation of GLCs in recent years, together with a very noticeable “mission creep.” At the June 2011 “Open House” for GLCs, Prime Minister Najib bragged that some of them have become multinational corporations. This is the sort of “mission creep” typical of many government initiatives. Najib did not mention which of the GLCs that had attained multinational status. Nonetheless the 20 largest GLCs collectively had nearly a third of their revenues from foreign operations. However, there was no mention what portion of the profits came from their overseas units.

What Najib refers to as “multinational” is no more than GLCs with overseas presence, nothing fancy. It is a far cry from multinational corporations like Nestlé, General Electric (GE), or IBM. Those are more correctly called “transnational” corporations. They may be headquartered in one country but their operations are global and have senior executives from different nationalities. It would be hard to say that GE is an American company when substantial numbers of its shareholders and employees are non-Americans. Malaysian “multinational” GLCs are far from that.

Petronas, Sime Darby, and Malaysia Airlines are three large GLCs with significant revenues from abroad or denominated in other than ringgit. Except for Petronas, the other two have had their shares of near-catastrophic financial debacles. Sime Darby is currently involved in a messy lawsuit over an engineering fiasco in Abu Dhabi that saw its CEO being ousted. Then there was its domestic debacle with Sarawak’s Bakun Dam.

Malaysia Airlines too has also had its share of financial fiascos and bailouts, except that they labeled as otherwise. Instead the government concocted a “Special Purpose Vehicle” to take over the airline’s debts. Wouldn’t it be nice if we all could have our own SPVs and make our debts disappear just like that!

Petronas, at least until recently, is the praiseworthy exception. It is professionally run and exemplary not only for a Malaysian GLC but also any national oil company. Its track record in terms of both upstream and downstream activities easily exceeds that of Petro-Canada, another successful oil-related GLC. Petronas’ success is due to it being relatively free from government interference in its day-to-day operations, although there have been major “inputs” with important policy decisions, like the building of the Petronas Towers and the new national capital, Putrajaya. In the aftermath of the economic crisis of 1997, Petronas was “persuaded” to “buy” (bail out) a shipping company owned by one of the sons of then Prime Minister Mahathir.

Petronas is remarkable for a Malaysian entity, private or public, in being free of corruption. Although its management and employees are predominantly Malays, nonetheless it has sought out only the competent ones, and not those more known for their political pedigrees. The company is an antidote to the prevailing stereotype that anything run by Malays is doomed to failure or mediocrity. I do not blame those who harbor such prejudices; there are just too many ready examples.

The other remarkable feature of Petronas is that it seeks to exploit opportunities in areas ignored by the major oil companies, as in Africa and such pariah states as Myanmar. That reflects the genius of its management. That company used to be a major contributor to the government’s coffer. With the declining price of petroleum, and with the company blighted by the usual disease afflicting all GLCS-political interference with its management-its future is less rosy.

Next: Rationale for GLCs

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

Soft Barriers To Malay Participation in Commerce

February 11th, 2018

Soft Barriers to Malay Participation In Commerce

  1. Bakri Musa

Soft barriers to active participation in the money economy are especially pronounced in societies that still exist in or have just exited from the peasantry and subsistence living. That is Malay society at the time of colonization. It is still true for a vast segment even today. The concept of money and the “money economy” is alien to them. Money was equated with greed and unbridled materialism, not a suitable topic in polite conversations. To ask for the monetary value of anything or service was tantamount to insulting its owner or provider. Monetary value was only for showing off your social status as with how much was your dowry or car.

The traditional trading activities in such societies are primitive, restricted to bartering. The worth of such exchanges, as with trading a few coconuts for fixing a leaky roof, is not with the economic value of the coconuts or the repairing of the roof, rather the goodwill generated, one fellow villager helping another.

One can imagine the difficulty members of such a society would have in adjusting to a money economy. If this were to be imposed from the outside world, as with colonialism, free-flow immigration, or unrestrained globalization, the difficulties in adjusting would be compounded.

Typically that society would react in one of two ways. It either withdraws, effectively declaring that it does not want anything to do with this alien value system, or else it blindly embraces the new system enthusiastically and uncritically.

The first reaction is seen in many Muslim countries, and I will pursue this further in the section, “Imprisoned by Religion.” We also see this with North American Indians, India under Nehru, and today’s Myanmar.

With the second, what typically happens is the absorption of only the superficialities and excesses, as can be seen in the immediate post-Mao period of China. After spurning the outside world, China suddenly changed under Deng Xiaoping. In mature capitalistic societies such as America and Western Europe, there is an effective taxation system with redistributionist elements, and where philanthropy is an honored tradition which have evolved and been perfected over time.

In China (as in many Third World societies) you are considered stupid if you do not conceal your income from the government and cheat on your taxes. As for charity, when Warren Buffet and Bill Gates, two billionaires known for their charitable deeds as much as their capitalistic instincts, visited China to interest its newly rich in philanthropy, the pair were greeted with silence if not derision. America has its Dukes and Stanfords, elite universities that are testaments to the generosities of their capitalist titans. China has none as yet, and possibly never will.

It is the rare society that gets it right immediately. The hope is that it will learn and stabilize eventually. Otherwise those excesses would lead to instability. The Chinese leadership today is very much aware of the severe negative consequences to the excesses and flamboyance of its politburo members and their children, especially when displayed abroad. There is as yet no such abhorrence with the excesses, corrupton, and flamboyance of the Malay elite–our sultans and UMNOputras.

It was only a generation or two ago that Malay society was deep in its subsistence and agrarian mode, typical of the kampong lifestyle. Most Malays lived off the land, and gotong-royong (communal effort) was the norm; bartering or trading of goods and services were strange concepts. Instead you helped each other, with no financial considerations.

With the coming of colonial rule and with it, capitalism, Malays were thrown into the money economy precipitously without any transition. The later influx of immigrants further compounded the issue. The immigrants by default and out of necessity had to adapt to the money economy to survive; they had no social or physical support system as with Malays and our kampong lifestyle. This earlier entry into the money economy by the immigrant population conferred significant advantages vis a vis the native peasant population.

It was no surprise that Malays, specifically those in UMNO, at the dawn of our country’s independence were clearly anti-capitalistic, except for its top leader, Tunku Abdul Rahman, who remained unabashedly committed to capitalism. To those in UMNO during its infancy, the term kaum kapitalis was derogatory, comparable and perhaps synonymous with kaum kolonialist (colonialist class/hordes). That soon changed when they saw the tangible results of profits and wealth. This Malay embrace of capitalism was accelerated under Mahathir.

Like the Chinese in China today, Malays embrace only the primitive or animalistic form of capitalism, its raw and exploitative version, and the associated quick bucks and short-term mindset. Also akin to modern China, corruption, collusion, and influence peddling rapidly became the norm.

If those are not formidable enough obstacles, then there is yet another significant “soft” barrier to Malay entry into commerce–our religion, or more accurately our particular and myopic interpretation of the Koran and Hadith (sayings and practices of Prophet Muhammad, s.a.w.). I will defer this to Part Eight, “Imprisoned by Religion.” For now, let me quickly preempt the anticipated reflex criticisms.

As a Muslim, I believe that my faith is fully consistent with and supportive of the ideals and practices of capitalism. Nothing in my reading tells me otherwise. After all, our Prophet Muhammad, s.a.w. (May Allah bless his soul) was a successful trader before receiving his prophethood. That reflected the profession’s high standing with Allah as much as His appraisal of the man.

However, being not an Islamic scholar or an economist, I lack credibility. All I can do is share with readers what I have learned from others about my faith and its view on capitalism.

One thing is certain; Islam cannot be supportive of atheistic communism or its close cousin, socialism. It is true that the egalitarian ideals of socialism may appeal and indeed have to many Muslims and can be construed as being consistent with those of Islam. On closer reading however, equality is not the ideal of Islam; indeed that would be against human nature. Allah in his wisdom has created us in all our diversities, with different skin colors, speaking different languages, and having diverse cultures. He has also endowed us with different talents and abilities.

Equality in such a setting would be an elusive goal, as well as a cruel illusion. Those in power would determine what equality would mean. In America at the time of the declaration of independence, the “We, the people” phrase in the preamble of its constitution for whom “equality” would apply were restricted to only tax-paying white males. They alone were entitled to vote and have the protection of the constitution. Slaves, women, and those who did not own land were excluded. Only later was that “equality” extended to them.

Likewise with meritocracy; those already in power would determine what attributes are considered meritorious.  Meritocracy as a concept could easily be used to justify continued suppression and denial of opportunities to others not currently favored.

Islam emphasizes justice, not equality. We cannot treat an orphan in the same “equal” manner as the son of a privileged family. That would be the height of injustice. Indeed to be just, we should do more for the orphan, which would also be the right thing to do. The great American jurist Oliver Wendell Holmes said it best, “It is a wise man who said that there is no greater inequality than the equal treatment of people who are unequal.”

It is easy for today’s observers, Muslims included, to conclude that Islam is against capitalism, or at least wealth creation and accumulation. Muslim countries, even those blessed with abundant natural resources like oil and gas, are overrepresented in the poor and deprived category. In Malaysia, Malays, who by statutory definitions are Muslims, lag behind the other races in all socioeconomic indices. That there was a time when Muslims were ahead of the curve has been all but forgotten, and if recalled, only for syok sendiri (self-gratification) exercises and not as a learning opportunity.

Capitalism is not un-Islamic. On the contrary, many of the practices and consequences of capitalism are very much in tune with the aspirations of our faith. Both capitalism and Islam are very adaptive. If the communist Chinese could adopt capitalism and imbue it with Chinese characteristics and sensibilities, and in the process emancipate hundreds of millions of its people out of poverty, I fail to see why we cannot do the same. Meaning, imbue capitalism with Islamic characteristics.

Next:  The Fallacies of GLCs

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

Encouraging Entrepreneuaralism Among Malays

February 4th, 2018

Encouraging Entrepreneurialism Among Malays

  1. Bakri Musa

Engaging in trade and commerce helps change our attitude towards and relationship with others. It would give us a different perspective. If more Malays partake in business, we would view non-Malays less as pendatangs out to grab Tanah Melayu (Malay Land) from us but more as potential clients, partners, and customers. We would not only profit with such a mindset but also more importantly, enhance race relations in the country.

The central proposition is not whether we should encourage entrepreneurialism among Malays (we all agree on that) but how best to achieve that. Even more daunting is the task of identifying the factors inhibiting Malays from partaking in business.

Those could, for convenience, be divided into soft and hard factors. The soft ones, by virtue of their being amorphous, are by far the more formidable challenge. These include the regulatory environment and institutional infrastructures, as well as our personal habits and expectations, together with the social and cultural elements that discourage us from partaking in commerce.

The hard factors in contrast are more definable and hence easier to recognize and thus potentially easier to overcome. These consist of such traditional barriers as poor quality of our human capital (lack of skills and training–easily remediable); inadequate financial capital (inadequate savings and capital formation as well as lack of access to loans and credit facilities); and thin social capital (lack of supportive social networks).

The World Bank publishes an annual global report on the ease of doing business in each country. Its 2012 Report places Malaysia among the top 20, which is excellent. You would expect business to be booming. Yet ask an ordinary Malaysian businessman the obstacles they face and you would get a far different picture. To them, the Report’s findings are a massive stretch.

What gives? The Bank studied only the major corporations, the ones with lawyers, accountants, and expensive consultants to help navigate the byzantine process; hence the ease of passage. Further, those companies deal only with federal agencies, not local or state authorities. Those large companies are already familiar with the Malaysian way of doing business and would include in their upper management local luminaries, especially those well-connected politically, as figureheads or “consultants” to smooth the way. This ugly reality was demonstrated by recent allegations of illegal “commissions” otherwise known as bribes being pursued in French, Swiss, Singapore, and American courts involving major projects in and purchases by Malaysia including those associated with 1MDB. More subtle is employing the children of the elite.

If you are a small-time entrepreneur without the resources to hire expensive consultants and have to deal with Taiping Town Council or a Sarawak State Agency, then be prepared for the “hassle” factors unless you are willing to give a “cut” to the local politicians, or outright bribe your way through the myriad regulations. No surprise then that the family of former chief minister of Sarawak and now its governor is rich beyond his ancestors’ wildest dream.

If we were to survey those small businesses, the results would be very different and far more revealing. The World Bank Report deceives both Malaysian and international investors. It also deceives our policymakers. Right up to the eve of the devastating Asian economic crisis of the 1990s, the World Bank, IMF, and other luminaries were running out of superlatives to describe the Malaysian economy.

On a side note, the key players surveyed by the World Bank were mostly non-Malays in the corporate world. Meanwhile Malay leaders in government remain blissfully ignorant of the plight of Malay entrepreneurs trying, for example, to secure a slot at Kuala Lumpur’s Bandaraya Ramadan bazaar stall.

Other ‘soft’ factors discouraging Malays from taking a pro-active role in commerce include our socio-cultural elements as well as personal habits and expectations. Whenever these sociocultural elements are mentioned, they elicit smug smiles from non-Malays, further confirming for them the many deficiencies of Malay culture. Conveniently overlooked is that this apparent cultural aversion to commerce is not unique to Malays. In ancient China, traders and merchants were held in low esteem; they belonged to the lowest social class as they were viewed as not producing anything solid, unlike farmers for example, who were held second only to scholars. This was also the sentiment in traditional Japanese culture. As can be seen, those cultural impediments can be overcome.

Expectations too are important. Make them too rosy and you set yourself up for failure. You would also not be diligent in attending to your venture thinking that it is “easy.” Too pessimistic an expectation and you would be discouraged to even try.

Malay leaders are of no help in this regard. They constantly encourage our people to go into business, but fail to educate them about the difficulties and hard work that this would entail. Many early Malay entrepreneurs failed because they assumed that securing the permits and loans was all they needed to do. They were under the misguided impression that the hard part was over, when in reality it had just begun.

This pitfall traps not just small-time kampong entrepreneurs. In the early 1980s I was involved with a group of bright young Malay doctors in starting a group practice in Malaysia. I envisioned something beyond just a collection of doctors under one roof, each doing his or her own thing, rather a fully integrated medical group that could later expand into a hospital or even nationwide. The model I had in mind was the Mayo Clinic or Kaiser Group Practice in America. At the time I was in a group practice in America and was heavily involved in its management.

Those Malay doctors already had a thriving “group” practice, and one of its partners was high up in UMNO. He was thus the group’s most productive rainmaker, securing major contracts from federal agencies, GLCs, and other big corporations.

As part of my due diligence, I visited their facilities and talked with the various partners and workers. I was impressed. Their clinics were packed and the patients satisfied. The government too was eager to support the group as it was among the few (if not the only one) made up of Malay doctors.

Beyond that favorable first impression I was stunned to discover that there was no formal contracts or agreement among the doctors. Their working relationship seemed to be, “We trust each other; we are all Malays!” There were also no financial controls; every doctor could sign the group’s checking account. As a substantial portion of the revenue was cash, the lack of financial control was obviously an invitation to fraud. To make matters worse, the rainmaker was now busy with his political aspirations and not paying attention to the fledgling group practice.

To make a long story short, I did not join. That proved wise as shortly thereafter, some of the major players left to set up competing practices across the street. Incredibly the partnership had no “no compete” or any agreement preventing them from doing so or in any way tying them to the group. As for the rainmaker’s political career, that too went down. He thought that running a group practice was simple–just get the doctors and the contracts. There was little need for his continued undivided attention beyond that.

Those bright young doctors were no different from the simple villagers as far as their business acumen or expectations were concerned. This is what I mean by the soft obstacles being much more formidable.

Next:  Soft Barriers to Malay Participation In Commerce

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

Membajakan Lalang (Fertilizing The Weeds)

January 29th, 2018

Membajakan Lalang (Fertilizing the Weeds)

  1. M. Bakri Musa

The seeming success of those pseudo (or crony) Malay capitalists wreak havoc on our community on many fronts. First, they become role models for the rest of our community. As such those negative values get entrenched in our culture. Second, we aggravate that by honoring these crooks. The message is then conveyed that to succeed you do not need to work hard or be conscientious rather be corrupt and suck up to your superiors. That perpetuates the “who you know, not what you know” mindtset. Once those values become embedded in a culture, then it is doomed to continued mediocrity.

Consider Malaysian’s royal awards list and compare that to America’s highest civilian award, the Presidential Medal of Freedom. A few observations stand out right away. First, with the latter you do not have much trouble associating the names with their achievements: Muhammad Ali, the greatest boxer ever; James Watson, the biologist who elucidated the structure of genes; and crooner Frank Sinatra who still breaks the hearts of not just matronly ladies.

Second is the diversity of achievements that are being recognized–leading scientists, architects and public servants as well as superb sportsmen, successful executives, and creative artists. Politicians and career civil servants are a distinct minority in the American award list.

While there are many public officials honored, they are rewarded not simply because of their official positions. Meaning, there are many more judges, diplomats, and cabinet secretaries who are not honored than who are.

Now consider Malaysia’s civil honor list. The Chief Secretary is definitely destined for a Tan Sri no matter how unspectacular his tenure. Likewise, the Chief Justice is certain to receive a “Tun” even though he has been implicated in a “judge fixing” scandal and involved in a fraudulent marriage in South Thailand. Likewise former prime ministers, no matter how mediocre their tenure.

That observation brings up another important point. Very few American honorees have been implicated in any sordid or dishonorable activity. That reflects the sterling inner core of those honored. In cases where they were later discredited, those were mostly because of changing public opinions and policies, as with Robert McNamara over his management of the Vietnam War, or Henry Kissinger over his Chilean involvement.

Compare that with the Malaysian civil honorees. We have one Tun, a former cabinet minister, involved in a corruption scandal over the Port Klang Development, and too numerous to count Datuks convicted of criminal activities. Then there is the infamous trio comprising, among others, a former Chief Minister of a state, also a Tan Sri, whose current obsession is pimping female escorts to entrap leading political figures. That former Chief Minister succeeded only in resurrecting his earlier sordid sex scandal involving a minor.

It would even be more interesting to discern from the royal honor list the patterns with respect to race. For Malays, the list is heavily skewed towards politicians of the ruling coalition and civil servants. Not any civil servant however; the post-retirement activities and pronouncements of those honored would betray their political inclinations. The Chinese recipients are mostly businessmen with lots of money to throw around. Draw the inference to that observation.

While the focus has been on these honorees who are bad actors, there is little attention paid to where they get their datukships. Had that been pursued more aggressively, it would point sharply to a few state palaces, Pahang being the most notorious.

Success is its own reward; there is little need to honor those who are successful. However, by doing so we hope to inspire others to follow in their footsteps. The people we choose to honor and celebrate thus become a surrogate statement of our and our culture’s values and whom we hold in high esteem. The destructive part of honoring deviants, corrupt politicians, and judge fixers is that we are in effect not only condoning but also rewarding those disgusting behaviors.

The flip side of this is equally revealing. One can tell much about a society by how it regards its gifted and talented. This is the reason why I am pessimistic about the future of our neighbor Indonesia. The world honors Pramoedya Ananta Toer but his native country saw fit to banish and incarcerate him on a remote island. His books are lauded worldwide but they are banned in his own country. Leading universities abroad honored Pram but it is the rare Indonesian student who has even heard of him, let alone read his books.

My late father had an apt expression for what I am trying to convey here. Although he was a teacher, his passion was farming, rubber planting in particular. As all Malaysian planters know, the biggest and most persistent weed is the dreaded rhizome, lalang. It sucks the nutrients out of the ground so that nothing else can grow, forcing even the lowly earthworms to abandon the soil. The lalang pretty much destroys the land as far as its ability to support any other life form.

When we honor these less-than-illustrious characters and the downright corrupt and incompetent, we are in effect, in my father’s words, membajakan lalang (fertilizing the weeds). Left alone those lalang will take over the land in no time; imagine if we were to encourage it by fertilizing it!

There is only one thing worse than a field of lalang, and that is trying to convince others that it is something else, like a field of alfalfa. Not even the donkeys would buy that!

Next:  Encouraging Entrepreneurialism Among Malays

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

The Hawker As An Elemental Capiatlist

January 21st, 2018

The Hawker As An Elemental Capitalist

M. Bakri Musa


Consider the simple enterprise of a roadside hawker selling fried bananas, the most elemental business activity. Every Malay villager feels he is competent to undertake that venture as it requires minimal capital, financial and otherwise.

Yet to succeed at this most basic level of enterprise would still require rudiments of financial, human, and social capital. Meaning, to succeed these would-be hawkers must have some training and familiarization with the business. Yet the government seems to think that giving them cheap loans would be enough. Thus, they are given money and then left floundering when their enterprises fail, as surely they would.

Imagine if those would-be hawkers had been given some elementary training before giving out those loans. To start with, I would give them cooking classes and teach them elementary health and safety practices as well as sound rudimentary business techniques like simple bookkeeping. I would explore with them the effects of the choice of banana, oil, flour and even cooking temperature on the taste and flavor of their final product. There is a definite difference in taste between fried pisang raja (king banana) versus nangka (jackfruit variety), enough to justify a premium price for the former. Similarly, the type of flour used, whether from wheat, rice, or tapioca would also influence the texture and flavor.

There is no limit to enhancing your product line and thus its market value by tinkering with the ingredients and other variables. Consider the version of fried bananas served in fancy Western restaurants–bananas flambé–where the fruit is covered in syrup instead of flour and then drizzled with alcohol and served in flames. It sells for around US$12.00 per serving. You could offer a non-alcoholic substitute for Muslim customers. Imagine the value added to your final product and the consequent enhancement of your revenue with such modifications.

Beyond the preparation and recipe, I would also teach these would-be hawkers personal hygiene and general cleanliness, and the impact these practices would have on their customers. Frame them as a public health issue, and if that does not convince those hawkers, then as a religious imperative or better yet, a marketing tool. Sick customers do not return! I would have these hawkers invest in a clean apron and cap to cover their hair, as well as wear gloves when handling food products, just like the executive chefs at fancy restaurants. Again, those would be good marketing and advertising tools! Look at the hawkers in the Japanese supermarkets in KL as well as in Japan.

Among the crucial elements to the success of any business are inventory control and cash-flow management. Thus, I would teach these would-be hawkers cost-saving strategies like buying nonperishable items in bulk to get volume discounts. That would require some financial outlay, and that would be the right instance to introduce credit loans. An alternative and also more preferable would be for MARA to use its clout to buy those inventories in bulk to achieve greater savings and then pass them on to the vendors.

Going further, we should encourage these hawkers to explore other ways to cut down on costs. They may not be able to supply their own flour or cooking oil and gas, but they may have some idle land in the village where they could plant their own bananas and thus incur considerable savings by not having to buy their primary ingredient. They could even sell the excess to their fellow hawkers, producing another revenue source.

MARA could commission an innovative design of a simple hawker cart on wheels, complete with a roof and separate holding tanks for clean and waste water. Again with MARA’s influence, those carts could be constructed cheaply through the economies of scale.

After implementing these initiatives, MARA should monitor the progress, tweaking the program as necessary and assessing the results. The whole process is an ongoing series of improvements and innovations, as well as learning from experience.

Out of every 100 of these would-be hawkers and budding entrepreneurs you take in for the initial training, perhaps only a fraction of them would have the discipline and motivation to complete it. That would leave only the most hardy and motivated applicants to receive your business loans. Consider the cost of training as investment in human capital. Even then, instead of simply handing these would-be hawkers the cash, I would make the checks out directly to the suppliers for the purchase of inventories and other goods.

These would-be hawkers are not used to having substantial amounts of money at their disposal. Were MARA to simply hand over the cash directly to them, as is the current practice, the first thing they would do is rush to the nearest Chinese store on a buying binge of items not even remotely related to their businesses. Or they would be inundated with relatives each with their own sob stories to justify their getting a portion of the money.

Yet that was exactly the standard practice of MARA, and before that, RIDA. No surprise that those initiatives would fail. When that happened, the officials invariably blamed the poor hawkers. Worse, they would also be condemned as failures and forever caricatured as the alleged weakness of their race and culture.

There are plenty of examples of such blunders, with price tags far exceeding the few thousand dollars loaned to the hawkers. I remember in my old village there was the well-connected politician who was given a lucrative timber concession. As if that bounty was not generous enough, he was also given a hefty loan. The first thing he did was buy a brand-new Mercedes sedan to drive around town. He did not think of buying a truck to carry the logs or a tree harvester. Had he bought a four-wheel-drive Land Rover, it would have made some sense. At least he could then visit his lumber camps, but a luxury car on a jungle road?

In Trengganu there was the project back in the 1970s to supply fishermen with diesel motors and ice makers. Again the same misguided strategy; the officials simply handed the loan money to those poor fishermen. The first thing the engine suppliers in town did was to hike up the price of those engines and then tack on unnecessary service contracts and fees. Had those officials negotiated a package deal with the supplier, they would have secured substantial discounts and then passed them on to the fishermen.

In Kedah there was the gaffe with the mechanization of Malaysia’s “rice bowl.” Again, the government was generous in providing the major landowners credit to buy tractors and combines to make their rice production more efficient. That part of the initiative was sound but as with any mechanization, many unskilled workers were displaced. As there was no mitigating program to take care of them, those workers ended up actively sabotaging the initiative and its principals. The program succeeded only in dividing the community, pitting the peasants against the landowners. The dynamics of that particular social crisis is well chronicled in James C. Scott’s Weapons of the Weak: Everyday Forms of Peasant Resistance.

The situation has not changed today except for the obscenely vast sums of money involved. Most recently there was a mega loan in the hundreds of millions given to a minister’s husband to start a cattle feed-lot operation. The first thing he did was buy a top-end Mercedes and two ultra-luxury multimillion-ringgit condominiums in Singapore. Same dynamics, only the price tags vary. While the minister’s husband may have an Ivy League PhD, his mentality and mindset was no different from the simple village entrepreneurs I cited earlier.

Going back to my pisang goreng hawkers, imagine if only 25 out of the 100 eventually succeeded in having a thriving stall. At first glance that would appear abysmal, a success rate of only one-in-four. However, on the flip side, without the initiative, those 25 would have little chance at gainful employment; with it they are now earning a living and able to feed and clothe their families, quite apart from providing a service to the community.

The benefits do not end there. Out of the hardy 25, a few would be sufficiently bitten by the capitalist bug and be inspired to venture beyond. One would decide that he could employ a few of his idle cousins to work on his banana plantations to supply bananas to the other hawkers. Apart from having another income source, he would also be providing employment for his cousins.

Another who had been frugal and thus acquired some savings may decide to install a shade over his stall and add a few tables so he could also serve coffee and tea , as well as ice cream with his fried bananas, enhancing his product line as it were. Yet another could discover a winning concoction of a special variety of banana, a specific brand of cooking oil, and a particular flour to make a pisang goreng to die for. Building a reputation around his particular product and keeping his recipe secret, he could start a franchise operation, a pisang goreng equivalent of Ramly Burger or Starbucks.

As can be seen the possibilities are endless, even with the humble hawking of pisang goreng. That simple enterprise has all the elements found in the most complex corporations: product (and production), marketing (customers), finance, location, and human resources.

Instead of pursuing such incremental improvements in each area, we keep going for the spectacular–with billion-ringgit GLCs, and repeating the same mistakes with ever-escalating costs. It cannot be that all Malay leaders and policymakers are corrupt. Many are, but eventually you would get a few honest souls or some whose conscience would disturb them enough to blow the whistle and put an end to the nonsense. These Malay leaders cannot all be dumb even though again many are, for eventually there will be a bright soul or two who would learn from the mistakes.

Beyond corruption and incompetence, I suggest that Malays have another and far greater problem. As a community we have a closed mind, trapped into believing that those lapses are not acts of incompetence or corruption but noble deeds. It is this blind loyalty to these incompetent and corrupt leaders that would have us honor them when they should be jailed, booted out, or at least looked upon with contempt.

Next: Membajakan Lallang (Fertilizing the Weeds)

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

It Takes More Than Just Money

January 7th, 2018

It Takes More Than Just Money

  1. M. Bakri Musa

Engaging in trade and commerce involves the setting up of enterprises. They come in many shapes, sizes and types to serve a limitless variety of goals and customers. Starting an enterprise requires capital; not just financial, which is the popular assumption, but also the more important human and social capital.

We are familiar with financial capital–money. Even the most economically illiterate Malay villager knows that you need modal (capital) to start a business. To them modal means money, and only that. In that respect they are no different from their supposedly advanced leaders who are also under the delusion that the key to successful Malay entry into business is only money.

Based on that faulty and superficial thinking, Malay leaders focus on extending easy credit to these aspiring entrepreneurs. What these leaders do not appreciate, because they have never run a business, is that it takes more than just money to start and run a successful enterprise. Often money is the least important component because with a promising idea or product there will be no shortage of those eager to fund your business.

At one time RIDA (Rural Industrial Development Agency), the precursor of today’s MARA, the agency tasked with encouraging Malay involvement in business, operated by disbursing loans to Malays who had some vague notion of starting a “business.” They had no skills or services to offer, but inspired by the rhetoric of our leaders, these Malays dreamed to be rich towkays (Chinese for tycoon) someday. In their imagination, they conveniently forget or choose to ignore the part of that proposition where you also have to work hard, remain frugal, and be patient.

What these Malay leaders and would-be entrepreneurs did not realize was that those rich successful Chinese towkays had earlier spent long years toiling as unskilled laborers while patiently learning their skills as well as being frugal. Those Malay villagers saw only the successful towkays, not the hundreds of unsuccessful ones who squandered their money on opium, gambling, and prostitutes while dreaming of one day to “balik Tongsan” (return to China) with their riches.

Had those potential Malay businessmen also seen the unsuccessful Chinese and Indians, those Malays would have had a more realistic assessment of the difficulties of starting and running a business. Perhaps then that would remind them to be diligent.

My memory of those aspiring Malay entrepreneurs getting RIDA loans was their immediate indulgences. The first thing they did with their borrowed funds was to buy a new car to impress their clients. Never mind that they did not have any clients yet or that their store shelves were still empty as they had yet to buy their first inventory!

It came as no surprise that the government’s early attempts at encouraging Malays to enter the business world failed miserably. There were no attempts to train or equip them with marketable skills. These leaders ignored the most important component–human capital.

Had those MARA officials been wise and more resourceful, they would have instead focused on training these aspiring entrepreneurs to equip them with the necessary skills. Enhance their human capital before offering them financial support.

Earlier I mentioned that during the Japanese Occupation, the authorities focused on training Malays in occupational skills, and then without any financial support from the government many of these individuals managed to start their own enterprises, again demonstrating the primacy of human over financial capital.

Next:  Elemental Capitalism

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

Integrating The Malaysian Private Sector

January 2nd, 2018

Integrating The Malaysian Private Sector

  1. Bakri Musa

The government is intent on integrating the private sector. As usual it pursues this in its typical arrogant and ignorant manner. Take the requirement that publicly-listed companies have 30 percent Bumiputra participation. That is fine if we let the market pick those lucky Bumiputras. With Ministry of Trade officials picking the winners, it did not take long for that scheme to degenerate into yet another corrupt political patronage system.

A more sensible approach would have been for the government to explicitly use ownership and employee diversity as criteria when awarding public contracts. American companies realize that workplace diversity is its own reward, quite apart from being the right thing to do. American corporations are outbidding their European and Japanese competitors in Africa because many of the US executives there are African-Americans. The same in China, with American companies actively recruiting ethnic Chinese-Americans as executives.

The “mom and pop” retail sector in Malaysia is dominated by Chinese. They usually recruit their own kind, and there is nothing wrong with that. It is to be expected with small enterprises; their owners’ circle of trust is narrow, confined to immediate family and clan members.

This concentration of the “small business” retail sector in Chinese hands is not due to lack of Malay business initiatives, as is widely presumed. Rather it is due more to the natural tendencies of those involved in commerce both large and small to band together and prevent new entrants to protect their existing markets and profits. Left to their own devices, as Adam Smith noted, capitalists would rather collude than compete. There is no need to attribute sinister racial motives even if there were to be any.

If you ask small-time Malay traders and retailers the greatest obstacle they face it would be the inflated costs of their supplies. As with the retail sector, the wholesale market too is controlled by Chinese. Tun Razak was aware of this marketplace reality and the obstacles it posed to the small-time would-be Malay entrepreneurs. His solution was to set up crown corporations, the precursors of today’s Government-linked Corporations (GLCs), to be the wholesalers to Malay retailers. That was the only viable solution then.

Today, a more effective way of breaking the monopoly of this ethnic supply chain and at the same time enjoy the benefits of having an efficient retail sector would be to open it up to more competition by encouraging major foreign companies like Carrefour and Walmart to set up business in Malaysia. Doing so would also spare the government the expenses of these GLCs; instead it would gain tax revenues from these foreign corporations.

Companies like Walmart and Carrefour are enlightened employers. In America, Walmart is a major employer of minorities. Meanwhile in China, Walmart is revolutionizing not only the retail sector but also customers’ behaviors. The irony that a retail chain started by the avowedly anti-communist Sam Walton would find fertile ground in China or that he would prove more successful in changing the ways of the Chinese than Mao could ever hope escapes the Chinese Communist leaders. Score one for capitalism and globalization!

In Malaysia, Carrefour has exemplary recruiting policies; it actively recruits capable Malays for its frontline as well as management positions. Unfortunately, instead of encouraging such multinational retailers with their enlightened personnel policies and exemplary work culture, the government is restricting them. The influence of “money politics,” otherwise known as corruption, among UMNO politicians and these Chinese retailers has a lot to do with that particular state of affair.

As if the problems with wholesalers and suppliers were not big enough for budding Malay entrepreneurs, there is also the matter of credit, the lifeline of any business. Banks and other financial institutions ignore these small customers and those with less-than-stellar credit ratings. They have no alternative but to patronize pawnshops, Ah Longs (Chinese moneylenders frequently associated with the underworld), and chettiars (Indian moneylenders) with their usurious interest rates. They are also exclusively non-Malay operations, right down to the goons they employ to collect the delinquent payments.

A more formidable barrier for Malays with respect to credit is our religious attitude towards interest, which is the flip side of credit. Malays like Muslims elsewhere, and much like medieval Christians, have yet to reconcile the Koranic injunction against ribaa to the critical modern role of credit and the associated cost of financing generally. In the subsequent section on Islam, I will pursue this issue further.

Malaysia’s answer to these basic problems is to intervene through GLC lending companies. A better, cheaper and more effective way would again, like the retail and wholesale markets, be to open the market up to foreign lenders like AIG that specialize in “sub-prime” loans. That would put these chettiars and Ah Longs out of business. Malaysia would be better off without them. AIG also has enlightened personnel policies. Rest assured such companies would employ many Malays, certainly more than the present ethnic moneylenders do. Big companies like AIG are smart enough to recognize the need for frontline Malay employees to attract Malay customers.

AIG’s aggressive pursuit of “sub- prime” borrowers, specifically for home mortgages, and its overexposure in insuring the highly sophisticated but in the end faulty “credit default swap” arrangements among major financial players contributed to the economic crisis of 2007-08.

Put aside that specific insurance component of AIG, its consumer-loan arm provides a useful service. Granted, the interest rates are much higher reflecting the lower credit worthiness of its clients. Nonetheless even with the ‘high’ rates, they are still nowhere near the outrageous amounts charged by the Ah Longs and chettiars. Further, AIG and all the other finance companies are tightly controlled with respect to their collection practices. They cannot for example harass their clients at work. No such restraint exists for the Ah Longs. Their collection goons have been known to chop off the hands of delinquent customers.

While integrating the Malaysian private sector is a necessary and worthy goal, active government interventions through mandates or GLCs are not the only or even the most efficient routes. Malaysian policymakers need to escape their myopic mentality and explore other possibilities. Liberating that sector by allowing more players, including and especially large foreign corporations, would be one excellent route. Another would be to explicitly reward companies with a racially integrated workforce and ownership by preferentially awarding them government contracts.

To reiterate, the lack of Malays in the private sector is a problem, not a mystery. We can only begin to explore for solutions with diligence once we have liberated our minds. As long as we keep them closed, we will continue on the present path that has led us to where we are today. It is worth reminding Malaysians that the country’s most notorious and most expensive scandal involves a GLC–the 1MDB financial fiasco.

Next:  It Takes More Than Just Money

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016.

The Futile Search For Unity Sans Economic Ties

January 2nd, 2018
The Futile Search For Unity Sans Economic Ties
M. Bakri Musa
Right after Malaysia’s independence in 1957 there was a yearning for the country to be closer with our fellow “Malay” states in the archipelago–Philippines and Indonesia–to form a loose confederation, Maphilindo. Others less ambitious (or more insular) wanted just Malaysia and Indonesia (Malindo), minus the predominantly Catholic Philippines. Despite the seeming commonality of culture, language and religion, Malindo did not even get started. Instead what we had konfrontasi, and a very bloody one, with Indonesia.
            Had those early leaders been more rational and less emotional, they could begin with a more modest and achievable goal, like encouraging trade between the two countries, beginning first with the free flow of goods and services, followed later with the freer flow of people. Had that path been chosen, trade and other relationships between the two countries would have by now greatly expanded. Creatively nurtured, it could have developed into a nucleus of what could be a Southeast Asian version of the European Union.
            Driven purely by impulse and emotions to pursue too ambitious a goal and without knowing the pitfalls, Malindo collapsed as soon as it was conceived. The result was worse than had the idea had not been mooted. The two countries were lucky that the ensuing konfrontasi did not destroy both nations.
            Today the two countries are even further apart. It is much easier for someone in Kelantan to buy Pramoedya’s book from in America than from its publisher in Jakarta. It is also easier to transfer funds from Seremban to Seattle than to Surubaya.
            If the original Maphilindo concept was more emotional than rational, then the subsequent ten-state association, ASEAN, is more ambitious than realistic. Today ASEAN is nothing more than a “talk shop,” with their leaders enthralling each other with their skits and amateur talent shows at their annual gatherings. ASEAN is just too big and diverse without taking into account or even acknowledging the vast differences between them. There is little shared commonality except for geography. The results showed. Malaysia’s intra-ASEAN trade is minimal, except with Singapore.
            We underestimate the value of trade and commerce in generating goodwill. I venture that the supreme merit of capitalism is precisely this, generating goodwill between trading partners. This far outweighs the other benefits, including profits. The world is far safer today with China and America being intertwined economically.
            Consider Malaysia’s perennial race dilemma. Many naively believe that if only Malaysians could speak the same language, share a common culture, or subscribe to the same faith, national unity would be that much more attainable. Current attempts at making Malay culture and language the defining elements of Malaysian life reflect this sentiment. Others fantasize that if only the political parties were not race based, racial integration would be greatly enhanced. Malays still hang on to the forlorn hope that if only we follow the one “pure” and “true” Islam, we would be all united and our problems magically disappear.
            Such delusions are based on flawed and muddled thinking. The Koreans share the same heritage, culture, and language yet that does not stop them from killing each other, given half the chance. The more promising and enduring path to unity is not through culture, language, politics, or even religion but economics, specifically the embrace of trade and free enterprise.
            Capitalism could be the effective and enduring solution to Malaysia’s race problems. It is also the most efficient economic system for producing goods and services, and also to effect substantive social and cultural changes. Once Malaysians view each other and the world not in terms of race or nationality but as potential customers, business partners, and sources of capital, understanding and with that peace and goodwill would follow.
            Trade and commerce are engines of economic growth, and this in turn brings more than just material comforts. As Harvard’s Benjamin M. Friedman noted in his The Moral Consequences of Economic Growth, economic growth brings with it greater tolerance of and generosity to the disadvantaged. This insight is worth emphasizing.
            Capitalism does not differentiate between race, national origin, political persuasion, or religious belief. Money is money, whether it comes from your own kind or foreigners. Those Malay villagers would not boycott the hawkers because they were Chinese, but the villagers would if they were being cheated or sold substandard goods.
            One would expect socialism with its egalitarian ideals to bring people together. It failed, in Malaysia and elsewhere, reflecting the gulf between theory and practice. We are all for egalitarianism but not when we are all equally poor. Socialism failed because it could not produce the goods and services. For Malays, we associate socialism with atheistic communism; the communists resorting to terrorism during the Emergency certainly also did not help the socialist cause.
            The New Economic Policy’s primary objective was to usher Malays towards capitalism so we could play an active role in the economy. Beyond that, with Malays becoming more involved in commerce and trading, we would begin to look at fellow Malaysians or others less as immigrants or foreigners but more as potential clients and customers. That would put a very different and positive perspective on race relations. In many ways, we are already seeing this with the noticeable change in the attitude of FELDA farmers towards the Chinese, at least the mainland variety, now that China is the main purchaser of our palm oil.
            On a higher level, Malays used to condemn the colonialists for bringing in hordes of immigrants from China and India to work on the tin mines and rubber estates. Our current race problems are rooted in that colonial policy. Today UMNO-linked ersatz capitalists bring in the Bangladeshis. What future problems await the nation?
            Malay (specifically UMNO) embrace of capitalism is very recent. At one time the term kaum kapitalis (capitalist class/hordes) was unmistakably derogatory, conjuring images of heartless businessmen of Dickens’ era, intent on exploiting the masses in the greedy pursuit of profits. As capitalists then were also colonialists, it was easy to hate them. With Malays now being capitalists themselves, aided substantially by the state, capitalism has a decidedly new aroma, even if it were only the crony or ersatz variety.
            Malays in the other parties are still enamored with socialism. PAS regards capitalism, specifically its acceptance of interests, as “un-Islamic,” conveniently forgetting that our prophet, s.a.w., was an accomplished trader and thus a capitalist at heart.
            Thanks to the Malay embrace of capitalism and free markets, we are no longer passive bystanders in the modern economy. With that, race relations have decidedly improved. Economic crises today no longer have or quickly acquire racial undertones the way they did in the past. Whereas before, whenever there were rumors of shortage of basic staples and the consequent price increase and hoarding, the blame would always fall on those “greedy” Chinese retailers. Today with the increasing number of Malay traders, this is no longer the case. Recent complaints about bus fare increases for example, were directed to the owners of the bus companies who are now mostly Malays.
            Consider that the 1997 economic crisis had minimal racial repercussions despite the fact that many of the high-flying casualties were Malays. Likewise, the pain of the recent reduction in petroleum subsidy cut across race; economic imperatives successfully breaching racial boundaries. Those were all positive developments, at least in terms of race dynamics. It also reaffirms the wisdom of NEP in “eliminating race with economic function.”
Next:  Integrating The Private Sector
Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016

Opening Minds Through Trade and Commerce

December 17th, 2017

Opening Minds Through Trade and Commerce

M. Bakri Musa


Let there be amongst you traffic and trade by mutual goodwill. —Surah An-Nisaa (The Women) (4:29)

Long before there was the National Language Act, and certainly long before today’s outspoken champions of Malay language were even born, Chinese hawkers and Tamil kacang putih (fried nuts) sellers plying their trade in Malay kampungs knew that to be successful they had to speak the language of their customers. Nobody asked or demanded that they do so but intuitively they learned that they could not make their living if they could not speak Malay.

Those traders went beyond, at least the successful ones. They also learned a little bit about Malay culture, or at least those elements that would impact their trade. For example, they changed their hours of trading during fasting months and would include additional offerings during Hari Raya.

Those hawkers also figured out something else; put beer and bacon on their carts and they would lose their Malay customers overnight. Both may be highly profitable and would add Chinese housewives to the customer base, but that expansion would not make up for the loss of the Malay market.

Those small-time entrepreneurs knew the secret to any successful business:  know and cater to your customers. The best way of doing that is to speak their language and understand their culture. German Chancellor Willy Brandt said it best, “If I’m selling to you, then I speak your language. If you want me to buy from you, dann müssen Sie Deutsch sprechen [then you have to speak German].” The only official language, or the one that counts, is that of your customers. This is also the wisdom of successful taxi drivers.

To digress, Malay language will never amount to much, meaning not many would want to speak or learn it, unless Malays become a major economic force. Then people would want to speak Malay because they want to sell to us. Look at Mandarin today with China’s growing economic might. People are now learning Mandarin in order to tap the huge China market.

Understanding your customers and appreciating their perspective is vital to success, and learning their language is an effective way of achieving both. As Native American Indians would put it, walk in your customers’ moccasins. That wisdom goes further because before you can do that, you first have to remove your own footwear.

If your customers are sufficiently different from you in terms of race, culture, or social class, walking in their moccasins gives you a whole new set of experiences and perspectives. It opens up your mind, and that all begins with your willingness to cast away, however briefly, your old familiar mental moccasins.

It is not surprising that the most cosmopolitan and open-minded communities are sited along trade routes, as with the settlements along the old silk road that binds the people of Asia with the West and the rest of the world. Their trading activities effectively overcome cultural and other prejudices.

Malacca’s strategic location midway on the maritime trade route between east and west made it a thriving center for trade. Through trade, its inhabitants became among the most open, progressive, and cosmopolitan. A more recent and very successful example is China. Through its embrace of capitalism and free trade, China today is more open and much less xenophobic. It laps up everything the outside world has to offer, a far cry from what it was a mere generation or two ago under the austere and socialistic Mao. Consider our chauvinistic Malay FELDA farmers. Today with China buying Malaysian palm oil, those farmers now have a far different view of China. Even UMNO, once stridently anti-communist, now sends observers to the Chinese Communist Party Congress.

Traders have a different view of their customers, especially their best ones. Today, with China being the biggest purchaser of US Treasury notes, American leaders are less inclined to lecture the Chinese on human rights abuses. Prospects for global peace are now enhanced with China and America being major trading partners.

The same dynamics occur across the Strait of Taiwan. If China and Taiwan could build on their current trade and commercial relationships, within a generation the issue of unity would become mute. Consider that the initial European Common Market, now the European Union, was essentially a trade association; it brought together two ancient enemies–the French and Germans–together. Given time EU may achieve the same with the Greeks and Turks, as well as the various factions in the Balkans.

Economist Albert O. Hirschman wrote in his The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph that commercial society made humans “sweet,” courteous, and civilized, viewing one another as potential partners in mutually beneficial market exchanges, rather than as clan members to be helped or clan enemies to be killed.

He quoted the Scottish historian William Robertson, “Commerce tends to wear off those prejudices which maintain distinctions and animosity between nations. It softens and polishes the manners of men.”

Western intellectuals brag–and often–that humanity had its dramatic improvement in its standard of living and unprecedented increase in economic output with the introduction of capitalism in the 18th Century in Western Europe. That statement is no longer true. China in the 1980s and beyond lifted more people out of poverty and did so in a short time (a few decades instead of over a century) as in Western Europe. It would be stretching the definition of capitalism to assert that China’s version, with its heavy state involvement and intervention plus very limited private ownership, is still free enterprise.


The only commonality between the capitalism of Western Europe and that with “Chinese characteristics” is that both encourages and are open to trade and commerce.


Next:  Futility of Unity Sans Economic Ties

Adapted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released in January 2016

December 10th, 2017


Personal Freedom – The Foundational Strength of Islam

M.Bakri Musa

(Based on a talk given at the South Valley Islamic Community, Morgan Hill, California, on the occasion of Mawlid Nabi, December 2, 2017)

(Second of Two Parts)

In his book Muhammad:  Man and Prophet, Saudi writer M. A. Salahi recalled his father’s advice. That is, love for Prophet Muhammad, s.a.w., could only be demonstrated by following his teachings, not by singing his praises. Today Mawlid is observed in many places with endless singing of his praises, and only that. As for hadith and sunnah, they are far from being sources of enlightenment but instead become contentious among the faithful. They divide not only Muslims but also between Muslims and non-Muslims.

In this Mawlid I will depart from tradition and will refrain from singing his praises or reciting his hadith. Instead I will highlight Muhammad’s achievements. Those are beyond dispute and should inspire us. I will relate only four, three before he received his prophethood, and one before.

First, he transformed the ancient Bedouins whose identity and loyalty were tied to family, clan, and tribe to one that transcended all those and be based only on the belief in the oneness and supremacy of Allah. Later, others joined in. Today Muslims are the most ethnically and culturally diverse group. Islam can rightly claim to be the first and continues to be the most powerful and successful globalizing force.

Second, he led the Arabs’ through a seismic change in their attitude towards women. Where once women were part of the inheritance, only slightly above the camels and date trees in status, through Islam women were entitled to a share of the inheritance. Not an equal one to be sure, but still a radical change from the status quo and a universe ahead of what was then prevailing elsewhere. With that cultural sea change, the associated dehumanizing of women and such gruesome practices as female infanticide vanished.

Third, he altered the Arabs’ vengeful “an eye for an eye” sense of justice to one that emphasized mercy, forgiveness, and restitution. He steered them away from revenge, and with it the endless cycle of generational clan disputes and tribal warfare. While he eschewed an eye for an eye, Mohammad, s.a.w, (and Islam) was not for turning the other cheek. Instead he and Islam opted for “soft vengeance.” That is, showing a better and more just way than endless destructive revenge.

Those were monumental achievements and the ensuing changes transformational. They all occurred within the memories of his companions.

There were those who viewed Mohammad, s.a.w., as but a mere Messenger, a human fax machine as it were, through whom God sent down His revelations. With that, miracles happened and Islam became a major force. As such we could dispense with hadith and sunnah. Even a cursory reading of history would disabuse one of that romantic and simplistic notion.

Those early Bedouins were tough customers. If Muslims today argue over hadith and sunnah, those early Arabs questioned the very Koran and Mohammad’s prophethood. This culture of questioning, learning, and the associated critical thinking that it nurtured, endured long after Mohammad, s.a.w. Today we look longingly to that long-ago “Golden Age of Islam,” forgetting what it was that made our faith and community flourish. We have replaced the cherished, productive, and pristine values of tajdid (constant renewal and vigorous learning) with taqlid (unquestioning acceptance and blind obedience). We also limited those who could partake in religious discourses. We opted for exclusivity over inclusivity, which in turn breeds intolerance and closed mindedness. Both inhibit learning and progress.

Koranic commands notwithstanding, emulating Muhammad, s.a.w., or achieving even a tiny sliver of his success would be a daunting task.

That brings me to his fourth achievement, although by chronology his first. Before Allah chose him to be His Last Rasul, Mohammad was a trader working on a caravan owned by someone else. If he didn’t deliver, he would earn nothing. He was such a diligent and productive worker that his employer Khatijah found him to be indispensable. That resulted in her proposing marriage to him. To use the language of modern business, she made him an equity partner!

Marrying your boss, (or the son or daughter thereof) is a tried and true path to advancement. Such opportunities are necessarily limited. What is not is to emulate Muhammad’s work ethics, that is, be productive and make yourselves indispensable, or as close to that as possible, to your employer. That is within everyone’s capacity.

I advised my children when they had their first job to remember one thing. If they were being paid one dollar, then they should give at least three dollars’ worth of service in return. The first to cover the pay, the second for overhead–with such soft costs as social security and unemployment insurance as well as hard ones as with providing an office. The third is the employer’s profit. A worker who gives less has not earned his pay. That deficit is haram.

Few of us would be privileged, talented, or courageous enough to venture out to be entrepreneurs like Khadijah and Mohammad. An honest, trustworthy businessman (or woman) will be in the company of prophets, the truthful, and martyrs, goes a familiar hadith. In Islam, the paycheck giver is held in much higher esteem than the paycheck receiver. The biblical wisdom (it is better to give than to receive) is never more apt in Islam than with respect to paychecks. Such an ethos makes sense; it benefits the economy and society–no entrepreneur, no paychecks; no business, no workers. That is the foundational wisdom of that hadith.

Islam’s high regard for entrepreneurs and business owners is not misplaced for another reason. When you have an enterprise to run, you view the world and others differently. They are no longer whites or blacks, natives or pendatangs (foreigners), Muslims or non-Muslims rather your potential clients, customers, and partners. Such a mindset leads to greater harmony. To an ice cream peddler it does not matter whether his dollar comes from a thirsty congressman or an illegal immigrant.

Remaining faithful to the sunnah and seerah is a challenge. Many are thus satisfied with simplistic aping rather than emulating, as with having long beards and acquiring multiple wives.

What is within the capacity of all of us is to emulate Muhammad the trader before he was chosen prophet. That is, be honest, productive, and dependable so as to bring added value to your employer. In Islam, they and other paycheck givers are the blessed ones; they are truly following in the path and are thus worthy emulators of our holy prophet.

More important than for us as individuals to emulate the prophet is for us collectively as a community to aspire for the achievements of those early Muslims. If they could transcend their clan and tribal identities, we too should our race, color, national origin, gender identity, sexual preferences, and other labels we paste onto ourselves and others. We should give full meaning to our core belief that we are all children of Adam.

If those ancient Muslims succeeded in elevating women from being part of the inheritance to acquiring a share of it, we too should aspire to a similar scale of achievement. We should strive to make women have full parity not only in inheritance but also all other spheres. The prophet’s achievements should be our inspiration, not define the limits. How can a father look at his daughter and say that she is worth only half that of her brothers? My sons would never let their sister be thus treated.

We should go beyond and support the emancipation of not only women but also others now oppressed.

Islamic thinking distinguishes between the obligations of the individual (Fardu Ayn) and that of the community (Fardu Kifayyah). That is false dichotomy. If we as individuals are dependable, productive, and treat others with respect, then our community would follow suit. If our society already has excellent social services and efficient garbage collection for example, that does not free us from our obligation to take care of those less fortunate and to clean the environment when we see it being despoiled.

I am proud of our South Valley Islamic Community in this regard. Women are very much full participants in our organization. They are well represented on our governing board, and we have had three women Presidents in our short history. I am also heartened that our Friday prayers are well attended by women.

Our organization through the dynamic leadership of Imam Ilyas is an active participant in the Interfaith Council, as well as working with other faith groups as with St. Joseph’s Lord’s Table in feeding the poor and homeless, and with Cecelia’s Closet in providing warm clothing for the homeless during these cold months. We have a children’s toy drive for the holiday season. Thank you to those who have generously donated.

Those achievements of the early Muslims should inspire us as individuals as well as a community. While it would be presumptuous to think that we as individuals could emulate Allah’s Chosen One, it is within all of us to model ourselves after Mohammad the trader before he was chosen as prophet. That is, by being dependable, trustworthy, and productive; striving to be paycheck givers instead of receivers. If we are the latter, we should work hard to give our employers extra in our work. It is also within our community’s capability to emulate those exemplary early Muslim communities.

That is what Mawlid Nabi means to me as an individual and as a member of the community.