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Ethnic outsiders vs bumiputera-ism

(© Konrad Mostert/

THERE are two issues around the appointment of Low Siew Moi as general manager of the Selangor State Development Corporation (PKNS). The first, as raised by laywer-cum-blogger Haris Ibrahim, is whether this state agency should act like an ethnic institution that serves only Malays or bumiputera.

The second is, if indeed PKNS’s main objectives are to uplift the status of bumiputera as some claim, does the appointment of a non-bumiputera general manager go against this? After all, only two of PKNS’s four objectives are about “effective bumiputera equity participation and management in industry and commerce” and “creating a bumiputera commercial and industrial community”.

The logic that justifies objection to the appointment of an ethnic outsider to an ethnic-specific programme is called “ethnic solidarity”. In other words, people help their own kind and, vice versa, can only count on help from their own kind.

This view is not completely baseless. I recall, and still encounter from time to time, lines like: “Hey, since both of us are Chinese, give me some discount lah!”

That may sound natural since most of us give special treatment to our own family members. In this context, a person of the same ethnicity could be considered an extension of family.

(© Maa-illustrations/Dreamtime)
But if a Chinese shopkeeper gives a Chinese customer a discount, who covers the loss from such preferential treatment? Does the Chinese shopkeeper take a cut from his or her own profits? More likely, he or she would still maximise profits by charging more from non-Chinese customers.

Hence, such acts of ethnic solidarity have an external cost: ethnic outsiders will eventually pay the price.

Of course, ethnic solidarity is not exclusive to the Chinese Malaysian community. I sometimes find myself being served later than an ethnic Malay Malaysian or ethnic Indian Malaysian in a Malay or Indian store.

So, ethnic solidarity is everywhere. And if you can’t beat ’em, join ’em, or else you will lose out.

The agency problem

For a Malay or bumiputera who believes that he or she has been discriminated against in the non-Malay/-bumiputera-dominated private sector, it is only right for the Malay-/bumiputera-controlled state to reciprocate by favouring Malays/bumiputera.

However, the business world learnt long ago about the agency problem, which refers to the conflicts of interest between the interest-owners (principals) and the people entrusted to look after such interests (agents).

The classic example is the conflict between company shareholders (principals) and management (agents). While shareholders want to maximise profits, management may be more interested in maximising revenue (which boosts the company’s reputation), or their own remuneration.

The current financial crisis is a prime example of the agency problem. This phenomenon is captured in the Malay proverb, “harapkan pagar, pagar makan padi”.

Pope Alexander VI (died 1503), considered the most controversial
pope of the Renaissance period (Public domain)
The problem is so widespread that it covers not only the economy, but also politics. The public choice theory sees the state having its own interests (getting re-elected, etc.) that are different from those of the collective society.

Think about those corrupt popes who extracted money by promising sinners entry to heaven — the agency problem even exists between God and mortals.

So, can ethnic bonding be so strong as to be free from this problem? Look at how many bumiputera remain poor even after nearly four decades of the New Economic Policy and its succeeding policies, and you know the answer is a resounding “no”.

The beauty of the mercenary

Now, let’s assume how a rational “ethnocentrist” would think. Imagine a Malay supremacist who genuinely wants to see Malays catching up in commerce and industry. Assume this supremacist can think rationally, instead of resorting to keris-waving — what would be his or her solution?

The counter-intuitive solution is to engage with ethnic outsiders. An ethnic outsider cannot cause a problem of agency simply because he/she is not supposed to be trusted like an insider. The outsider can’t get away with cheating or shirking duties simply with the “he/she is one of us” excuse. 

The ethnic outsider would instead be subject to extra scrutiny. Since his or her position is not guaranteed in the long run, the only way to keep his/her job would be to best serve the interests of the principals.

In other words, because there is no presumed trust arising from ethnic solidarity, an ethnic outsider may make an ethnic-based project more successful.

Not convinced? From the great empires of Rome to the Tang Dynasty and the Arab, Moghul and Ottoman dynasties — they all benefited from the services of ethnic outsiders. The need to earn trust — rather than trust being given as a birthright — drives ethnic outsiders to go the extra mile in their professional duties. It would also work similarly with “ethnic insiders” without “pure bloodlines”.

Emperor Xuanzong of the Tang Dynasty
(618-907AD) (Public domain)
Just look at the “ultras” in Umno, and also some in PAS, from the 1940s until now. Ask yourself, how many of them did not have Indian, Arab, or even Chinese blood?

Who are the losers?

With the appointment of a non-bumiputera general manager at PKNS, the loser is not likely to be bumiputera at large. On top of her competence, Low would have every incentive to do a good job simply because of her “original sin” of not being a bumiputera.

So, why should the bumiputera staff in PKNS protest her appointment? Are they truly convinced that she won’t do a good job in helping bumiputera?

My guess is exactly the opposite: they fear she might actually do her job well. She would then set a precedent and throw the logic of ethnic solidarity into bankruptcy. The implication is clear: you may have a pro-bumiputera policy, but the executor can be a person of any ethnicity who does the best job.

That’s why the bumiputera bureaucrats, Umno politicians who claim to defend the Malays, and PAS politicians who sang us the “PAS for all” tune just seven months ago must oppose this.

Their interests are not the same as that of ordinary bumiputera. Theirs is a classical case of an “agency problem” indeed.

A political scientist by training and a journalism lecturer by trade, Wong Chin Huat uses the Federal Constitution as his “bible” to fend off the increasingly intolerable evil called “state”.

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7 Responses to “Ethnic outsiders vs bumiputera-ism”

  1. omongwaras says:

    A Chinese stallholder employed a Malay cook after observing the popularity of nasi padang.

    The Malay cook was always telling us that her boss was very good.

    The boss helped do the marketing, pound cili, cut vegetables, fry the spices and helped in every step of the cooking process.

    We told the cook she was indeed unusually lucky.

    After 3 months, she was fired.

    The boss herself started cooking.

    Free lessons the Chinese way.

  2. will says:

    But the Malay cook can learn how the Chinese stall holder does business and networks. The Malay cook can open up his or her own business if he or she dares to take the risks and spend a lot of time and effort to set up networks and capital for the business.

    If the Malay cook just wants it easy and not put in extra effort to become an entreprenuer (usahawan), then susah lah.

  3. Daniel C says:

    “From the great empires of Rome to the Tang Dynasty and the Arab, Moghul and Ottoman dynasties — they all benefited from the services of ethnic outsiders.”

    Urm…better be careful using examples of history to prove your point WCH, cause overall the experience for “locals” of any “outsider” has generally not been positive.

    If it were, why all that effort to create countries and borders after colonialism? Why don’t we invite the British back and “manage” the country since they did it so well with our natural resources…

    Don’t get me wrong, I’m on your side and history has many valuable lessons but overall, “trust the outsider” has not really been one of them. We need to argue this in some other way…

  4. chin huat says:


    Thanks for your response.

    Recognising that ancient empires had benefited from the service of ethnic outsiders does not contradict with objections against colonialism. From the standpoint of the “native/host” population, the key is whether the “ethnic outsiders” are ruling or serving the native/host.

    Both the Romans and Tangs recruited the “barbarians” as merceneries while the Arabs, Moghuls and Ottomans used quite a few ethnic outsiders in administration.

    Personally, I don’t have problem with employing foreigners to serve a country (so long they don’t pose an agency problem). We must be able to differentiate the British residents/advisers in the Malay states and the British and other European advisers that served in (Thailand’s) King Mongkut’s or Chulalongkorn’s court.

    The point is that foreigners (and for that matter, locals too) must not come in as unelected rulers (which is a natural cause for the agency problem).

    To me, democracy is a workable mechanism (through periodical elections and media freedom) to check the agency problem. Ethnocracy is inferior to democracy because it operates on the flawed assumption that mortals can act selflessly for their co-ethnics.

    Looking forward to your response.

    Yours, Chin Huat

  5. Daniel C says:

    Hi CH,

    “My guess is exactly the opposite: they fear she might actually do her job well. She would then set a precedent and throw the logic of ethnic solidarity into bankruptcy. The implication is clear: you may have a pro-bumiputera policy, but the executor can be a person of any ethnicity who does the best job.”

    The “logic” for ethnic solidarity will not go into bankrupcy anytime soon. As I’ve commented before, history has far more examples of the “outsider” who betrays the trust of the local.

    Using the example of the mercernary is for me a risky example since a mercernary will very likely turn around and betray its employer should he or she be offered better incentives from an opposing party.

    Mao Zedong said something like “black cat or white cat, if it catches the rat, it is a good cat.” Ah…a communist with a meritocratic position, like democrats like you. However, with few exceptions, history (or nature?) says that a black cat will most likely have baby black cats to feed and vice versa…

    Unless of course it is an Obama cat?

  6. chin huat says:

    Dear Daniel,

    My proposition is that the logic of “ethnic solidarity” will go into bankruptcy if Low turns out to do a better job than a bumiputera.

    You contention seems to be that Low may not do a better job in taking care of the bumiputera (if your historical reading is to be a guide), more than that the myth of ethnic solidarity will never be abandoned even if she does so.

    If you are eventually proven right on the first point, then it is only rational for an ethnocentrist to support ethnic discrimination not only on the demand side, but also on the supply side.

    And we have no case to ask people to abandon ethnocentrism on the grounds of rationality, which was the purpose of my article.

    However, if you disagree with even my conditional prediction that Low does a good job, then shouldn’t we ask why people would shoot themselves in the foot?

    You have not showed concrete examples in history as you have claimed. Let’s just see Low would confirm my proposition.

    By the way, the “black cat, white cat” analogy came from Deng Xiao Ping, not Mao Ze Dong.

    Chin Huat

  7. Daniel C says:

    Hi CH,

    I think the kind of democratic society you and I envision is something that cannot be found in the past. I’m going on a rant here so bear with me.

    We might find some exceptional mercenaries or other cases here and there but as I have mentioned, the whole idea of nation states is about keeping a line between “insiders” and “outsiders”. Many non-Western cultures still have yet to really benefit from the developments of modernisation, globalisation and democracy as much as Western countries have. Low’s case is for me another sign of desperation.

    First it was just the indigenous tribes (Inuit, Native Americans, Penans). Now, even a dominant race finds its own culture threatened. Simply by looking at how the Malay language has been penetrated by English, or the way the government encourages tourism and allows its citizens to surf the net relatively freely, the big picture is that ancient tribalistic features are facing extinction.

    Most are killing it without much awareness of it. The articles and propaganda of ketuanan Melayu cannot be compared to the propaganda promoting ketuanan McDonald’s, Sony, Hollywood, etc.

    So regardless of how well Low does her job, a tribalistic culture/society will still go on the defensive since they have lost so much economically in the past and now, culturally.

    The fatwas, the keris-waving, the use of the ISA, etc., are the signs of a drowning culture. Thank goodness we have not reached the point of bombings and ethnic cleansing.

    You and me, I think we are those who have some techniques for keeping afloat on a Western globalised world view (your rational argumentation skills are obviously better).

    90% of world leaders in global meetings all wear suits and ties these days, and “we” hardly blink and eye despite all our shouts for openness, diversity and democracy.

    Most local cultures of the Third World have lost a lot in their past and the “modern life” the Western system is pushing them to go towards has, so far, only led to an unsustainable environment and economy.

    I don’t think I’ve really answered your point. I guess if you still wish to use history to argue with those who attack Low, it would be more helpful to use localised examples to convince them. That would be much more challenging.

    In my case, I look at world history and see that empires and emperors have only changed names and clothes. Gordon Brown recently announced that there is to be a new world order. In such a system, race matters little, what matters is that one falls in line with their world view. The appointment of Low and Obama is possible, good, and right in this new world order. But does this make any tribalistic practices intolerable, wrong, or bad?

    We can be agents of this new world order. But I sense your article tries to find a middle way, and that is the trickiest path of all. That sir, is very cool.

    Oh have a look at this lady. She doesn’t use history. Just an exercise in empathy. /divided/

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