Forces of Creative Destruction in 2008

2008 has been deemed by many to be a woeful year. Yet I see it differently. I see it as a year where excesses is finally curtailed; where the arrogant is humbled; and where great despair is slowly replaced by small glimmers of hope for better days ahead.

Global financial markets suffered huge volatility and trillions of market capitalisation were wiped out. Giant financial institutions once thought to be too big to fall, fell. We are all Keynesians now – as governments are now looked upon as the only saviours able to save their countries’ economies from further collapse. Massive government stimulus; re-regulation and ultra loose monetary policies are now the flavour of the day. The free market ideologies of the Chicago School are being quietly discarded as its disciples presided over the worst financial turmoil and scandals, brought about by their over-zealous beliefs that markets are self-regulating.

Politics-wise, well, some bad, some good. Zimbabwe is still ruled by a President who is perversely spending his energies in a desperate bid to cling to power, by instituting brutal oppression of any opposition. Meanwhile, epidemics, runaway inflation and hunger ravaged the country. The Middle East could not see a ceasefire last beyond 2008 between Israel and Hamas – and greeted the new year with hundreds dead and thousands injured in Gaza. On a brighter note, US saw the election of the first non-white President, which cast a warm glow of optimism around the world as many countries partake in the hope of a new era after the destructive foreign adventures of George Bush.

In Malaysia, we too had our ups and downs. BN losts its two-thirds majority. Five states, which together accounts for the major portion of the country’s GDP, fell to the Opposition. The destruction of BN saw the birth of a viable two-party system, and the emergence, hopefully, of a true democracy, where the people are the masters, not their political representatives. However, the BN seemed to have decided that its setback was only momentary, and that the people will come back to its senses in the next General Election. So out comes the usual “divide and conquer” politics – racially-charged statements; senseless use of ISA (for its detainee’s protection); and instructions to the media “to behave”.

President Ronald Reagan, in the 1992 GOP Convention, said, “Whatever else history may say about me when I am gone, I hope it will record that I appealed to your best hopes, not your worst fears, to your confidence rather than your doubts.” I certainly hope that for 2009, our new Prime Minister will echo the same thoughts – that in the face of immense challenges facing Malaysia, if the government insists on instilling fear by emphasizing what we can lose, instead of what we can gain, from meritocracy, transparency and the courage to reform our many failed institutions; then the seeds of opportunities brought about by the “creative destructive” forces of 2008 will be forever squandered. Malaysia will be further left behind, as governments around the world re-tool their economies and restructure their institutions in the face of a new global reality caused by the near collapse of the global financial system.

I prefer to remain optimistic that change is in the air for 2009. After all, we Malaysians are lucky in that there is still so much to hope for in this country of plenty.

Happy New Year to all you hopeful Malaysians out there.