The Interview
It is often said that at independence in 1957, Malaysia was at par economically with Nigeria. Now Malaysia is an economic and industrial giant while Nigeria has deteriorated. In this interview, Tun Musa bin Hitam (pictured right), the former deputy prime minister of Malaysia, tells Hichem Ben Yaïche how Malaysia did it. There are important lessons for Africa.
The Malaysian experience
Q: What is the secret of the Malaysian success? A: Well, in the first place, when we achieved independence from the British, those who became leaders were technocrats who trained under the British and they learned about management and adminis- tration. Number two, they had the support of the population. Tey won elections. Number three, they were themselves very development-oriented in their thinking. I think they were responsible leaders because they realised that you achieve independ- ence to develop society at large. Many developing countries fought for
independence, they got independence and power, but the leaders immediately forgot about why they fought for independence, they ruled for themselves. I am very happy to tell you that this has not happened in Malaysia. At the time of independence, we were the number one producer and ex- porter of rubber in the world, and number two producer of tin, and from those two resources we made a lot of money. You may remember the Korean War (1950-53). Tey needed a lot of rubber and tin, which shot the price of rubber up. We used that income for development. When we got independence, we went
for development; we planned for the long term. Te results of that planning can be seen today; we made progress step by step, and diversified the economic base instead of depending only on rubber and tin. We started growing other crops, such as palm oil, which is now our main crop. We call
24 | April 2011 New African
it “oil power” and oil power is giving us a lot of money. We also went for cocoa plantations big-time, for the production of chocolate. We also broadened our agri- cultural base to cover other crops as well. Tat was the first move. Second, we developed our industries. At
first, the industries were to provide jobs for the people. Ten, we opened up for both foreign and domestic investment. A lot of foreign investors came. We said: “Come to us, open your factories, give jobs to our people.” Te salaries were low, but it was better than having no jobs. Our people got the jobs. So they were able to support themselves. Tat was the second stage. Te third stage was that we became
more selective. Instead of anybody com- ing to produce anything – toothbrushes, toothpicks, etc – we said no, we want to go higher; we will produce high-end products ourselves. We’ve got rubber, we have tin, we have palm oil, we have cocoa. Why shouldn’t we process them ourselves? We invested in the processing of these raw materials. So the third stage was to have resource-based industries, and we asked investors to invest in this area.
Q: It was strategic planning, wasn’t it? A: Yes. First, we had five-year plans, and we implemented them diligently. Five years, five years, five years at a time. We had the money for the plans, and we trained our people, the civil service was trained and was able to run the programmes. We have one of the best systems for collecting
taxes. I will tell you [this] because many developing countries do not collect taxes. Te richer the country, the less taxes they collect for development. Here the British introduced a very efficient tax system. Nobody can escape it. We have strong enforcement of the tax regime.
Q: Many companies hate paying tax, they fly away from countries where the tax regime is stiff. How did you solve this problem? A: Very simple, in order to attract foreign investors to Malaysia, we exempted them from paying taxes for the first 10 years. We wanted them to come here as our priority was providing jobs to the people. Tat was number one. Number two was to process our raw materials into high-end products. Number three was to develop ourselves. I led the first investment missions to Eu-
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