The comments by the head of the European Commission delegation to Malaysia, Thierry Rommel, have triggered a storm a controversy with a lot of attention focused on the New Economic Policy. He said the rationale for expressing his concerns over the pro-bumiputera affirmative action policies was in relation to FTA negotiations between the EU and Asean.
It is the first time that the negotiations for the EU-Asean FTA have been highlighted in the media. And they signal disagreements behind closed doors over how to resolve NEP-related issues so that the FTA can be signed.
Non-Malays and opposition leaders who have welcomed Rommel’s remarks are missing the point. To be sure, the NEP has many serious flaws, but it has also been a major stumbling block in the negotiations for FTAs, not only with the EU but also with the United States. FTA negotiations with the United States, for instance, have been bogged down over key issues such as NEP policies on government procurement and whether it should be open to foreign firms.
This impasse could be a blessing in disguise and buy us a little time. In this piece for the Herald in February, I argued that an FTA deal with major developed nations/blocs such as the United States, Japan and the EU would lock Malaysia into a system that promotes neo-liberal economics – liberalisation, deregulation and privatisation. And once we sign those agreements, we would be effectively throwing the key away.
Make no mistake, the US and EU are not interested in whether the NEP is discriminatory to non-Malays or beneficial for the Malaysian economy. Rather US and EU trade negotiators are more interested in making it easier for giant multinational corporations to enter the country and take control of the local economy, to flood the country with their goods. They want to entrench the rights of American and European investors ahead of the interests of the local economy including the SMEs. Instead of Malaysia becoming self-sufficient and promoting energy and food security, for instance, we will find ourselves increasingly locked into the vagaries of the unsustainable global economic system even as the very planet is threatened by global warming and rising sea levels.
…by signing an FTA, we would be locking ourselves into the global neo-liberal capitalist system and piggy-backing on the United States (and the EU). We would be saying “yes” to a future society ruled by multinational corporations, to a society where the income gap between the rich and the poor will grow even wider.
Crucially, we will deny ourselves the chance to pursue alternative, more independent economic paths or visions. We will deny ourselves the opportunity to move towards “Small is Beautiful” – to decentralise the economy, to create self-sufficiency among local communities, to move towards traditional organic farming instead of large-scale pesticide-driven agro-business ventures.
Instead, we will be locked into a system that promotes economic growth ad infinitum. We will become more and more dependent on rapidly depleting fossil fuels. And when that runs out, we will start playing Russian roulette with nuclear energy. All the while, we will neglect research into cleaner alternative energy sources such as solar and wind power.
Of course, if we sign an FTA and go down the “free market” Malaysia Inc road, we will never question the wisdom of a system of perpetual economic growth that fails to reach the most marginalised communities.
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Sadly, our economic planners think economic growth is the solution to all our woes. Even among many opposition politicians, there is this suffocating mindset. There is this glaring inability to think of alternatives to the corporate-led globalisation model that empowers huge firms while dehumanising workers.
At most, the politicians and economists might tinker with this model by trying to add a so-called ethical, humane dimension but they would never think of questioning it.
When we are faced with a water shortage, they ask individual Malaysians to conserve water. But they would never dream of asking corporations and businesses to save water – simply because “it does not compute”. The whole premise of our economic system is based on the assumption that market forces alone will be able to balance a mismatch between supply of and demand for resources through pricing. But what happens when the resources themselves run out or become degraded?
At the end of the day, no matter how much you try to soften a deeply flawed, unjust economic model, the poor will continue to suffer and the earth will continue to be degraded and polluted. That is because the system is oppressive and designed to profit the corporations at the expense of ordinary workers and the environment. The system undermines the dignity of the human being while promoting the interests of capital. It is a system - propped up by corporate propaganda over the media - that is almost totalitarian in its lack of tolerance for dissenting views.
