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The Impact of Globalization in Malaysia Essay

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Updated: May 17th, 2018

Many regions of the world have felt the impact of globalization in one way or another especially in the twenty first century.

Globalization can be defined as the process of or a set of global forces which encompasses a significant organization and reorganization of the various social relationships and engagements, and can be assessed in terms of their intensity, extents, rate of spread, and the resultant impact, which in turn lead to intercontinental or interregional connectivity, interrelationships, and the general power dispensation (Held 16). Globalization has been associated to a greater extent with western culture, especially that of the United States of America.

It is one of the most significant forces that have played a central role in modeling the socio-economic orientation of several countries during the late 1970s and the past earlier years of the 21st century. It is acknowledged that despite the fact that the globalization process has hastened the rate of economic growth in third world countries, its forces have also contributed to a number of challenges.

These include; non-uniform rate of economic growth, lack of taking into consideration the aspect of equality, as well as the likelihood of creating socio-political turmoil in these countries. Most states in the larger Asian continent like Malaysia, Singapore, Indonesia, China, Japan, and Thailand have not been an exception when it comes to the influence of globalization.

This essay, therefore, seeks to discuss the effects of globalization in Malaysia. It will focus on the impact of globalization on its economy, education, culture, and politics.

Malaysia, a Muslim country, is one of the fastest growing economies in Asia and the world at large. It is an island country found in the South-East Asia and is composed of thirteen different states, including three Federal Territories. The country occupies a surface area of about 329,845 square kilometers making it the 66th largest country and the 43rd world’s most populated country with the population standing at 28 million according to the 2008 National Population and Housing Census (Held 18).

Malaysia got independence from the British in 1957 through negotiation rather than bloodshed like is common for most states which were under different colonials like the French, British, Germany, and Portuguese. However, during the earlier years of post-colonialism era, Malaysia witnessed armed conflicts with the neighboring Indonesia in 1964-65.

It was after this period that Malaysia, with Singapore having been expelled from the then Malaysian Union, started to redefine its course. Towards the end of the twentieth century, Malaysia witnessed a significant economic boom and soon it recorded a rapid rate of development during the last two decades of the 20th century.

There is the Strait of Malacca which forms a very significant international shipping bay and hence facilitating international trade which is central to Malaysia’s economic growth. Moreover, manufacturing and industry sector constitute major pillars for the national economy (Rasiah 13). The country has diverse plant and animal distribution over its vast geographical orientation making it one of the world’s greatest tourist destinations.

The effects of globalization, just like in other parts of the world, have been felt significantly in Malaysia. As mentioned earlier, the late 1990s saw Malaysia’s economy shift from over-reliance on agricultural production to a more industry and manufacturing-based economy especially in fields such as the use of computer technology and other consumer electronics all through the wake of the twenty first century (Hoogvelt 3).

The concept of globalization has received different interpretations in Malaysia ranging from scholars, contemporary writers, to political leaders (Hoogvelt 5). Most writers have resorted to offering critical analyses of the seemingly unstoppable forces of globalization, especially the authors engaged in post-structuralism period. These accounts try to offer alternative ways of looking at globalization in general and how the states of the world can benefit from this phenomenon.

Malaysia, like other countries of the world, has not resisted the globalization process in its totality (Stiglitz 3). Instead, it has derived a way of engaging the looming forces of globalization from the west. In most instances, this country has been very selective when it comes to embracing the ideas brought about by the globalization process (Nesadurai 71).

The emerging concept of modernity has been assimilated into the Malaysian state in a highly sophisticated way. This approach has helped in significantly redefining Malaysia’s autonomy in relation to the globalization process. Malaysia has positioned itself as a fierce critic of some western ideologies, specifically those of the United States of America.

It has not been hesitant in making outright proclamations as well as political opinions and these characteristics have helped position Malaysia as a formidable force in the Asian continent (Nesadurai 73). Malaysia has modeled itself as a good case of how states can withstand the otherwise unstoppable impact of the globalization process. It is a role model of how countries can selectively maneuver the concept of global capitalism in the name of globalization.

With an attempt to understand the effect of globalization on Malaysian economy, many Malay scholars have tried to explore the opportunities as well as the challenges that this global process can bring about. The perception of these scholars concerning globalization is significantly optimistic. They believe that there are practices that are being propagated by the western countries, especially the United States, which are worth emulating rather than looking down upon them (Stiglitz 4).

The spirit of equality in America has inculcated the same sense in the Malaysians and they champion the need for mutual respect, specifically between the Malays and the non-Malays. They argue that people should feel for one another in the sense that if something is good, then it should be good for everyone else just the same way as something bad will affect everyone.

The negative attitude that the Malaysians have towards the colonialists is strongly reprimanded by the scholars. They say that nursing the colonialism memories will only serve to worsen the relationship with the outside world instead of promoting mutual cooperation (Stiglitz 7).

The scholars urge the people of Malaysia to look at the western communities as development partners instead of perceiving them as potential enemies. One scholar emphasizes the fact that globalization is a force that is shaping the entire world in modern times (Stiglitz 17). As a rapidly developing country, Malaysians are encouraged to play a central role in the global arena if they are to attain sustainable development status.

The globalization process, the scholar notes, received a major blow in 2001 during the September 11 terrorists’ attacks on America coupled with the global financial crisis of 2007. But the most defining moment in Malaysian international relationship came during the wake of the 1997 Asian financial crisis (Stiglitz 26).

It took stringent measures in reaction to this unprecedented economic downward trend. Dr. Mahathir Mohamad, the longest serving Prime Minister, was in charge during the crisis and he played a major role in criticizing the west for what was perceived as negative impacts of the globalization process (Mahathir, 2000, 4).

The precautionary measures recommended by Muhathir won him a number of admirers as well as opponents. The opponents argued that the proposed market approaches were crude and also, they criticized Malaysia’s ‘lack of concern’ for human rights (Mauzy 210).

His admirers, on the other hand, singled out Mahathir’s independent-mindedness, anti-colonialist pronouncements, and the proposal of alternative approaches of dealing with economic upheavals as a sure way of dealing with such global economic and political realities (Rahman 23).

It was the successful management of the crisis by Mahathir using the autonomy of national policy that was seen as the greatest challenge to the conventional economic dictatorship of liberalization brought about by the perceived forces of globalization (Nesadurai 87).

Mahathir’s approaches did not only win him national support but also regional backing. As opposed to popular beliefs that Malaysia under the reign of Mahathir condemned globalization in its totality, it is crucial to note that over the last two decades of the 20th century, Malaysia welcomed, developed and promoted what it perceived as good aspects globalization (Rahman 28).

The negative impact of the globalization process in 1997 was vocally criticized by Malaysia and marked it as a ‘betrayal’ by the western economies through the forces of the global market.

The analysts of the global economic phenomena regard globalization as a new force to be reckoned as far as world market relationship is concerned. This process has a historical account and the analysts have concluded that there is a notable qualitative improvement in the successive instances (Held 23).

With time, there has been increased influence by the American hegemony, division of labor on the international scale, and the introduction of stringent systems of economic policies. Initially, these regulatory influences were through the Bretton Woods system and in modern times via the World Trade Organization (WTO), coupled with the upcoming neo-liberal world market (Hoogvelt 37).

Neo-liberal system is characterized by the continued growth and critical import of financial capital facilitated by technological forces as well as political influence (Helleiner 12). The ever increasing transfer of financial capital, especially the speed of its mobility and the volume transacted, has resulted in grave consequences to the various national economies including that of Malaysia.

In particular, most national economies have been rendered redundant and taken hostage to this new capital mobility and general world order marked by the dramatic globalization process. From a comparative perspective, the neo-liberal experience has been felt in smaller economies like Singapore and Malaysia as well as for developed economies, United States of America and France alike (Helleiner 17). This is due to the fact that the stock trading determines the recovery rate after a drastic fall in financial markets.

It can be universally accepted that globalization is not a universal concept; instead, it is multi-dimensional especially in the Malaysian context. Different people in Malaysia have varying perceptions of this concept. Some Malaysians associate it with the infiltration of foreign multinationals, new brands and ways of life, while others belief that it is development of technological applications like the internet, the ever increasing number of non-governmental organizations and the great influence of global market trends on Malaysia (Held 29).

These forces are believed to have shaped the capital and labor order in the country and hence influencing the daily lives of the people.

The initial engagement of Malaysia with global economy can be traced to the time when it ventured in the export-led strategy of growth in 1969. It was followed by heated debates concerning the stand of the Malays in the midst of the looming ‘socio-cultural mindset revolution’ (Rahman 34).

This era witnessed the introduction of the Association of Southeast Asian Nations, the Asia-Pacific Economic Cooperation Group and the increasing Malaysian involvement with the United Nations.

In 1981, the year when Dr. Mahathir took over as the Prime Minister, Malaysia’s internationalization became more pronounced through the introduction of new policies.

Mahathir brought with him new policies and other reform measures which were geared towards the adoption of neo-liberalized market trend (Mahathir, 1991, 2. Most state-owned utilities were privatized; drastic cuts in both the direct and corporate taxes were witnessed, as well as reduced expenditure by the Malaysian government (Mahathir, 1991, 7). This enthusiastic process was seen as a new dawn for Malaysian development.

The need for economic stability was reinforced by the declaration of clear economic development objectives which were aimed at revolutionizing the industrial, agriculture, and services sectors. The challenge was to ensure that Malaysia’s economy became competitive as to be able to take on the forces of the world market.

As a result of these efforts, a rapidly growing economy was witnessed, with annual growth rates ranging between 8% and 9%. Furthermore, Malaysia experienced a growing foreign investment over a period of five years from 1985. During the early years of 1990s, the economy continued to expand significantly, resulting in increased rate of globalization and the regulations controlling capital and labor were subsequently liberalized (Mahathir, 1991, 13).

Within five years, the major factor that engineered Malaysian economic growth was the foreign capital from investors (Mahathir, 1996, 4). This upward economic trend, as mentioned earlier, was to receive a major blow in the 1997 Asian financial crisis.

The unique leadership style adopted by Dr. Mahathir was not without disapproval from western allies. This was due to Malaysia’s government decision to ‘Look East’ in its effort to keep control of the country’s economic stability. However, the Malaysian persistent search for economic autonomy did not diminish the strong ties with the west especially the United States of America whose investments in the county’s semiconductor industry remained strong (Helleiner 32).

Despite the globalization process influencing the Malaysian economic sector significantly, it also affected the socio-cultural dimension as well. There was a social and cultural shake up when globalization was taking root as Malaysia sought alternative approaches of attaining sustainable development (Rosenberger 222). A number of writers in the larger Asia identified this period as the ‘Asian renaissance’ (Ibrahim 2).

Another important area which has been influenced by the globalization process is education. With Malaysia expecting to be an industrialized state by 2020, vocational education and training has received increased attention especially from the government and private sector (Mahathir, 1996, 8). This is driven by the motive of having a well educated, skilled and efficient human resource especially in this highly technological economy which is based on a country’s know-how.

The broadband interconnectivity has enable Malaysia to connect with the developed countries, thanks to the Multimedia Super Corridor. This urgent need for education reform in technical-vocational systems has been triggered by the globalization process (Held 31).

On the political dimension, globalization was not without some degree of influence on the politics of Malaysia and other Asian states. In 1987, there was a serious global attack of Malaysian and Singaporean treatment of social and political agitators. The outside world questioned their way of regarding human rights (Mauzy 223).

These criticisms, however, received criticism of equal magnitude from the Malaysian Prime Minister who referred to them as interfering with sovereign states’ affairs in the name of human rights. He termed this approach as neo-colonialism (Mahathir, 1991, 15). Dr. Mahathir was especially angered by the double standards approach employed by the Americans as far as human rights was concerned (Mahathir, 1991, 18).

The heated criticisms and counter-criticisms, however, seemed not to affect the ever increasing Malaysian relationship with the west, especially on foreign policy development. This can be attributed to the mutual benefit that each party enjoyed from the engagement (Rasiah 16).

Moreover, the Malaysian political dimension was seriously shaken by the 1997 Asian financial crisis which, according to Mahathir, was a product of the globalization process (Mahathir, 2000, 2). It was unfortunate that during this year, there ensued a political crisis which resultant in the sacking of the then deputy prime minister, Anwar Ibrahim, who was arrested and later imprisoned.

Besides some Malays’ need for a generational change, the crisis was triggered by ideological clash concerning the globalization process and how to effectively respond to it. The Prime Minister saw his deputy as an agent of the western economies who were determined to force their misleading policies and regulations in the name of globalization (Mahathir, 2000, 5).

He noted that Anwar’s and his supporters’ call for eradication of corruption in the country were very similar to the neo-liberal objectives of International Monetary Fund (IMF) and those of the World Bank in the name of advocating for good governance. These experiences positioned Mahathir as an architect of the globalization process in Malaysia who new what was good or bad for the country.

The Prime Minister warned his fellow countrymen of the dangers of blindly embracing globalization. He said that the ‘new’ process was a scheme by the west to rule and dominate the developing and poor countries through their neo-liberal policies. Mahathir noted that the objective this time round would not be to exploit local labor; instead, it is to continually exploit the resources in the poor countries and render them stagnant in the underdeveloped state.

The end result of such exploitation, according to him, would be the presence of multi-billion banks and corporations which would curtail the growth of local ones. Dr. Mahathir defined globalization as the process of westernization and the unchecked, unmonitored absorption of western business ideologies and standards, as well as political arrangements all over the world (Mahathir, 2000, 4)

The essay has attempted to provide a comprehensive analysis of the impact of globalization on Malaysia. It has offered a working definition for the controversial concept of globalization within the Malaysian context. Furthermore, the essay has elaborated the impact of the process on Malaysian economy, education system, culture, and the political dimension.

We can conclude that, besides the scholars and writers, the longest serving Prime Minister of Malaysia, Dr, Mahathir played a great role in shaping and determining the magnitude of the impact of globalization on Malaysia.

This was through his seemingly unconventional approaches of handling economic crises which in most cases were criticized by the western economies. In fact, his alternative approaches of engaging globalization received approval from most states of the Asian continent (Machado 638). The forces of globalization, especially through technological advancement, are still being felt worldwide even as we start the second decade of the twenty first century.

Works Cited

Ibrahim, A. The Dawn of Asian Renaissance. Times Book International. 1996, 2-23.

Held, D. Globalization and Transformations (4th ed.). Stanford: Stanford University Press. 2008, 12-32.

Helleiner, E. Countries and the Reintroduction of Global Finance. Ithaca: Cornell University Press. 1994, 4-37.

Hoogvelt, A. Globalization: A Post-colonial Perspective. Basingstoke: Macmillan. 1997, 3-67.

Machado, K. ‘Malaysia and its Cultural Relationships in the 1980s: Look East’. Asian Survey. 1992, 27(6): 637-62.

Mahathir, M. The Hidden Agenda. Kuala Lumpur: Lim Kokwing Integrated. 2000, 1-27.

Mahathir, M. The Meaning of Globalization. Kuala Lumpur: Malaysian Business Council. 1996, 1-14.

Mahathir, M. Defining Malaysia’s Destiny. Kuala Lumpur: Malaysian Business Council. 1991, 1-19.

Mauzy, D. ‘The Human Rights: Malaysian Perspective’. Pacific Review. 1997, 10(3): 209-35.

Nesadurai, H. ‘Understanding National Economic Autonomy? Malaysia’s Adjustment

During the Financial Crisis’, The Pacific Review. 2000, 14(2): 71-110.

Rahman, S. A. The Malaysian Mental Revolution. Kuala Lumpur: Penerbitan Utusan Melayu. 1971, 23-45.

Rasiah, R. Industrialization in Malaysia: A Focus on Foreign Capital. London: Macmillan Plc. 1995, 13-48.

Rosenberger, L. R. ‘Malaysia’s Currency Crisis: An Analysis’, Contemporary Southeast Asia. 1997, 19(2): 221-52.

Stiglitz, J. The Globalization Process and Its Disgruntlements. London: Allen Lane. 2002, 3-34.

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