Infrastructure in Malaysia
My first job was working as an economic analyst and research associate for the Federal Reserve Bank of New York’s Emerging Markets Group. After a few month’s job searching in the rough economic climate of spring 2010, I had been happy to land a professional-sounding job with “research” or “analyst” in the title – much better than “administrative” or “intern” – and even better, one that would actually tap into my background in economics and passion for the international. I began “country coverage” a few weeks into my work, and my first country assigned was Malaysia.
During that first summer at the New York Fed I spent hours poring over Excel spreadsheets and chatting with my colleague Michael, who transferred Malaysia to me from his country portfolio. I learned to dig down Excel rabbit holes, to make sure my forecasts reflected the ever-changing data releases and to write briefings which were sent off to a mailing list full of central bankers around the country. And eventually I did seem to be less of a recent econ grad and more of an economic analyst. Twice per year we would write a one-page country risk analysis for each country in our Emerging Markets portfolio, and I would write things like,
Malaysia faces structural weaknesses that have encouraged human and physical capital outflows and left the economy over-dependent on low value-added manufacturing exports.
and generally wag a finger at the outsized role of the public sector in the Malaysian economy; at the over-reliance of the government on oil revenues from Petronas; at excessive fiscal expenditures, particularly on unsustainable fuel subsidies; and at the overall lack of a diversified, private sector-driven economy like we enjoy in the AAA-rated West. Oh, and a parliament in which the United Malays National Organization (UMNO) and its ruling coalition have dominated the country for decades, resulting in politicians with no incentive to depart from the status quo. This status quo includes affirmative action favoring ethnic Malays over Chinese and Indians, creating some degree of racially-tinged contention.
Eventually over three years, it occurred to me that while I found all of this interesting, analyzing these things for a living didn’t make my heart beat, particularly in the Dismal Science, which makes a living over prognosticating doom and gloom via some discussion on “structural weaknesses.” I left my position to study computing at grad school in Australia.
But still, I was excited to go to Malaysia, the place I studied for three years. I had come to know it in the abstract, over macro talk on broad intangibles, concerning not only Malaysia’s national issues but also its place as a small, open country in a global system. Now I would come to know it in the micro, in the physical, in the sensory, in the looks I would surely receive from people on the street. I still strongly believe that macro data speaks louder than isolated personal anecdotes, but let’s see what I would “learn”, or moreover, what I would experience with that abstract knowledge in the back of my mind. I spent a few days in Kuala Lumpur and Penang, exploring to my heart’s content in 90 degree heat.
To begin my Southeast Asia tour, I got on a redeye AirAsia flight from Melbourne to Kuala Lumpur. The airline AirAsia itself is symbolic to me, the brainchild of Indian Malaysian Tony Fernandes and a rare private-sector success story. AirAsia has blossomed not due to but in spite of the Malaysian government, which sticks to promoting the interests of its pubicly owned, should-have-been-bankrupt Malaysia Airlines. AirAsia had to drive the building of its own low-cost carrier terminal (klia2) to make its business model work.
My flight was packed with skinny Malaysian Chinese youth, many of them probably students at Australian universities returning home for the summer, chatting in their sing-songy English. The pilot was an Indian named Suresh, and the stewardesses smiled charmingly in bright red uniforms and spoke Malay and English. When I arrived in Kuala Lumpur the next morning, I was soon hit with alternating blasts of intense humid heat and air conditioning, which brought me back to summers in Shanghai. I was so excited to be back in Asia again, and to be among different kinds of Asians!
Yet I wondered how it would feel to be Chinese-looking in a country where many dislike the Chinese. The Chinese in Malaysia and throughout Southeast Asia are a prosperous bunch, which has provoked an anti-Chinese sentiment similar to anti-Semitism in Europe. (Some famous Malays such as Mahathir Mohamed are also openly anti-Semitic, and those with Israeli passports are not allowed in the country.) The affirmative action laws favoring Malays are aimed at raising social justice for the majority race that fell behind economically. Yet, the open, government-endorsed bias against Chinese and Indians has helped contribute to a “brain drain” in which educated and potentially productive non-Malays leave the country. Meanwhile, a Malaysian Chinese friend of mine once told me that Malaysians of different races never intermarry and that some Muslims will not physically touch Chinese people because they eat pork.
This situation all made me bristle, but I wondered if it would feel as contentious as it sounded.
I definitely observed segregation. Traveling through two urban centers, I noticed the Chinese gathered in their Chinatowns and Indians in their Little Indias. I saw packs of Chinese teens on the monorail, and groups of Malay women in head scarfs, but never a mix of the two. The Chinese did not bat an eyelash when I ordered char kway teow at their market stalls, while I definitely felt as if I had walked into the wrong neighborhood while wandering amongst Malay shophouses, getting glared at by local men.
I definitely observed racially-correlated iniquity. The island of Penang was full of white high rise apartment buildings, glittering shopping malls, factories of companies like Dell and Mattel and big detached houses with manicured lawns behind painted walls. In historic Georgetown, with its heritage shophouses and food stalls aplenty, people were snapping pictures with iPads. This place was settled by Chinese starting in the Ming Dynasty, and their legacy is apparent in the ornate mansions full of finery once owned by prominent clans of Straits Chinese (also called Peranakan or Nyonya), descendents of immigrants who formed a new distinct identity in Malaysia. Penang is the only state to have an ethnic Chinese minister steadily since Malaysian statehood.
Yet, to me it seemed no more segregated or unequal than Northern California, where ethnic enclaves also exist and people’s friendships also often fall along racial lines. I didn’t feel like it was precarious, or like it would break out in violence; in public spaces, everyone mostly seemed civil, helpful and even friendly. In addition, instead of treating me in a racist manner as I may have expected, most Malay guys tended to hit on me (some Chinese ones did too). And like in California, the differing but largely strong and proud ethnicities resulted in awesome FOOD!
In Kuala Lumpur, I had the opportunity to hit up three Malaysian Chinese markets. In all of the markets and hawker centers I’ve been to in my 23 countries of traveling, I would definitely say Malaysian Chinese markets are among the best.
First, the Chinatown Wet Market. I was walking down Jalan Petaling, a big commercial street heavy on the tourist junk, when I caught a glimpse of a man selling roast pork belly. I saw that he was standing at the opening of what appeared to be a giant cavernous covered market crossing Petaling. I went in for a peek at the heaps of shiny fish and glistening butchered pig cuts. An old man was puzzling artfully as he prepared to cut a perfect piece of fatty pig skin. Another had whole chickens, heads removed, with a bunch of birds squawking in a cage below. Nearby is Madras Lane, where women were serving up bowls of curry mee.
Man making tofu at the Chinatown Wet Market
Breakfast time at Imbi Market
I also went to hit up two popular hawker centers, Imbi Market and Jalan Alor. Imbi is partially built under a high-ceilinged structure and partially ramshackle under tarp. The market has a section of fresh fruit and some meat, a section of clothing and then a grand food court. In the food court, some establishments are housed permanently in surrounding stalls and others serve up noodles etc. of carts in the center. I just came for a light breakfast so I grabbed an iced kopi, a hot, perfect egg tart and a flaky red bean pastry. I took a seat at one of the plastic chairs and soaked up the hungry cacophony.
Jalan Alor was right next to where I was staying at Bukit Bintang. The long street is all shophouses with the ground floors devoted to selling delicious food, with ample plastic seating and a night party atmosphere. I got my favorite Malaysian dish, char kway teow for $2 and wasn’t disappointed: fresh noodles perfectly seared by the wok, with a delightful kiss of chili oil, and one local bonus: a healthy heaping of cockles. I came back to Jln Alor a couple more times for roast duck and curry mee.
Char kway teow from Jalan Alor
Roti-ish pancake with curry sauce in Penang
Georgetown on Penang also had some amazing food; in fact food is the main reason why one goes to Penang. Unfortunately I had destroyed my stomach coming out of Thailand and suffered from heartburn, premature fullness and the propensity to vomit every time I ate, but I still was happy to get cheap eats from the carts that dot the historic city as well as the hawker centers. I got some more char kway teow there, and fried chicken and other goodies. We were also pretty pleased to try some great Indian food, including some of the best roti and samosas ever, from the carts and restaurants around Georgetown’s Little India, where Bollywood music is pumped through the streets and stores sell saris.
Over-reliance on oil revenues, unsustainable fuel subsidies
Malaysia is a big producer of oil and natural gas and these activities belong primarily to the state-owned giant Petronas. KL’s famous twin towers are the Petronas twin towers, actually. The role of fossil fuels in the Malaysian economy is large, with about one third of government revenues coming from oil and gas. And yet rather than say, saving these windfalls while operating with fiscal prudence a la Norway, the government continues to squeeze Petronas for dividends and meanwhile spends as much as 10% of its expenditures (3% of GDP) on fuel subsidies to keep pump prices low [they do have a sovereign wealth fund called Khazanah but it is more of a government holding company than an investment of oil earnings].
The result is a country where car is king. Sometimes for a tourist this is a positive thing; Malaysia easily has the best highways in Southeast Asia, and it was a real treat to barrel down those roads on buses at 70mph after tooling along at 20mph in traffic or potholes in say, Cambodia or Vietnam.
But the everyday Malaysian can forget about walkability or pleasant urban spaces. Though it enjoys a monorail and a limited amount of train system, KL was mostly a network of massive highways. Even its major central park is hard to get to on foot; it seems like an elevated jungle island in a sea of highways. In a few places pedestrians can walk through overpasses, including covered air conditioned ones, but not knowing my way around that well I often found myself walking along the side of the eight-lane roads with no street-level businesses and not even sidewalks.
On the other hand, in Malaysia it’s so damn hot, who wants to walk outside? One time a white colleague of mine was complaining that Asian megacities aren’t walkable like quaint European cities, and I was annoyed by this demanding that everyone live in the European way. And how can we even compare cities of 1 million with those of 7-20 million? While I found myself agreeing with that colleague somewhat while being stuck walking on the side of the highway, I cannot really pass cultural judgment on a preference for traveling in air conditioned cars over walking in 90 degree heat, particularly if cabs remain accessible price-wise. From an environmental, sociological and economic/fiscal standpoint, however, I would argue against the car-petroleum dominance. In fact, with its production-consumption patterns, Malaysia is set to become a net importer of oil. Meanwhile, the plummeting oil price can threaten to wreak havoc on the budgets and currencies of countries that depend too much on oil exports. Plus, everyone knows the traffic sucks.
I did enjoy riding the monorail, though, and the metro has women-only cars!
KL, city of traffic
Much better on the monorail (monorail! monorail! monorail!)
Un-diversified economy, over-reliance on low value-added manufactured exports
Whenever I land in a country I look for signs of economic development, as probably everyone does. On the bus to the city from klia2 I quickly observed industrial activity among the wet-green, jungle-y landscape: Huge piles of industrial goods like concrete piping. A sign marking a Petronas natural gas line. And no tropical villages but rather large tracts of row house housing developments, though sometimes also a disheveled bunch of tin roof hut clusters nearby – I imagined these housed the workers. And throughout Malaysia as I rode long distance I noticed the rainforest had been leveled to make way for rows and rows of neatly lined palm oil trees–Malaysia is the largest exporter of palm oil. Meanwhile, in Penang the place was fringed with the factories that were producing those manufactured exports, as mentioned above. Kuala Lumpur was a concrete jungle full of corporate headquarters, including many of those state-owned national champions, as well as banks–Malaysia is also the center of Islamic finance.
So what I observed in terms of production aligned exactly with a Wikipedia summary of the country’s economy. I guess when one sums up a country’s economy we tend to focus on the producers, on the major industries. And Malaysia is an economy driven largely by exports and government spending, and to a lesser extent investment. Its consumption growth has been largely tepid in recent years, unlike say, the Philippines which is a highly consumer-driven economy.
But here on the ground consumerism was up in my face. One of the major traditions of KL life is none other than the mall. I checked out Pavilion KL and Suria KLCC, both of them six-plus story behemoths housing stores like Sephora, Kinokuniya and Parkson. With the lack of public spaces outside, I could quickly see that a main gathering point was inside at the mall. Ah, Asian megacity malls. Everyone, even groups of Malay guys, was coming into Pavilion KL when I was there at night, taking photos on their iPhones of themselves in front of the huge lit-up Christmas trees. Because what is Christmas about, in a Muslim country, besides shopping?
Christmas at Pavilion KL
Anyway, I only saw two very prosperous cities, and none of the non-urban life in Malaysia, so what I got was not a comprehensive sample of the Malaysian economy. But looking at its many different industries and people gathering in shopping malls, and comparing that with much poorer places I saw in Cambodia, Vietnam and Burma, I kind of thought, what more do you WANT? Economics is based on utility theory, which means that humans always want more. So naturally economists believe Malaysians want and need more, and while I am certain that we should bring more to those who can’t afford an iPhone, I do not really believe that all humans always need more.
I guess that’s why I left that area of study.