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State Accumulation, Patronage and Conflict in Malaysia

Sat, March 18, 10:45am to 12:45pm, Sheraton Centre Toronto Hotel, Floor: 2nd Floor, Civic Ballroom South

Abstract

This paper seeks to locate the discussion of money politics and threat to democracy in Malaysia within the broader process of state accumulation strategies, specifically the shift from the NEP to privatisation and more recently nationalisation. Each new accumulation strategy can be seen as a response not just to the failure of previous policies, but also to demands arising from the emergence, rapid growth, and preferences of Malay businessmen and the wider Malay middle class. As such, investment preferences and rent allocation have remained unchanged, centred largely on non-tradable, protected, unproductive or speculative sectors that limit long-term economic returns. This threatens the viability of patronage networks because ongoing patronage depends on productive rents providing kickbacks necessary for politicians to remain in power and continue dispensing patronage. Unproductive rents thus increase the political contestation for resources through patronage networks, leading to increasing conflict and factionalisation that undermine political (party) unity and authority. This increases authoritarianism and encourages short-term predatory behaviour in contrast to longer-term accumulation strategies based on the political leadership’s ability to dispense economically viable rents to productive groups. Money politics, political conflict and authoritarianism are thus mainly symptoms of the underlying conflict over the accumulation process, and a reflection of state weakness rather than strength. This paper evaluates the economic viability and potential political impact of rent allocation by examining evidence of: a) aggregate-level economic activity; b) rent allocation in infrastructure and construction; and c) the investment preferences of government-linked investment companies.

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