By Wong Chin Huat in The Nut Graph
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
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