ThirdWorld Quarterly, Vol21, No 6, pp 103 5 – 1057, 2000

Thestate o fthe‘ state’in globalization:social order and economicrestructuring in Malaysia

CHRISTINEB NCHIN

ABSTRACT This article asserts that,instead ofanticipating or searchingfor indications of the ‘endof the state’in an era ofneoliberal globalization,it is morefruitful to examinethe relationship betweenthe state andsocial order, becauseof the potential to discern the conditionsand consequences in which occurthe ruling elite’s andsocial forces’resistance to and/or alliance with, transnationalcapital. A case study of Malaysiais presented to demonstratethe complexand even contradictory ways in whichsocial order is regulatedthat allows the state to managedemands emanating within andbeyond the country. SpeciŽcally, the analysis focuses onthe different historical junctures in which changingbases of state power,paths of development,and ofŽ cial manipulation ofsocial identities convergein the regulationof social order thatfacilitates capital accumulationwhile maintainingstate legitimacy in amulti-ethnic con- text.

Thepromotion of economic deregulation, privatization andliberalization policies throughoutdi fferent regionsof the worldin the last twodecades of the twentieth centurysignalled neoliberalism’s ascendancein shapingthe latest phaseof globalization,or the realization ofthe world-as-a-whole.Driven by neoliberal mantras suchas efŽciency, productivity and transparency, mutually constitutive changesin the productionprocess andinnovations in newcommunication technologiesappeared radically toundermine state controlof the movementof capital andpeople across national borders.Consequently, some observerscame toanticipate the ‘globalvillage’ or the ‘endof the state’as asigniŽcant outcome ofthe emergingglobal capitalist order. 1 At the beginningof the twenty-Žrst century,however, what is clear is that anticipation ofthe state’s demise is premature.Intellectual inquiry,instead, has examinedwhy and how the state is beingtransformed rather thanrendered obsolete bythe processes ofeconomic restructuring. Some posit the emerging formof the ‘competition’or ‘ courtesan’state as awilling participant, orin the case ofthe ‘efŽcient capitalist’state, as the authorof neoliberal globalization. Fromthis perspective,state economicpower can be strengthenedin partnership with,or in the service of,transnational capital. 2 Others contendthat state economicpower is weakenedby the transfer of

ChristineB NChinis attheSchool of International Service AmericanUniversity, 4400Massachusetts Aveune, NW,Washington,DC 20016,USA. E-mail: [email protected].

ISSN0143-6597 print; 1360-2241 online/ 00/061035-23 Ó 2000 ThirdWorld Quarterly DOI: 10.1080/01436590020012016 1035 CHRISTINE BNCHIN

sovereigntyover key economic issues to international (egWorld Bank, IMF), regional(eg EU, ASEAN)and/ortransnational organizations(eg WTO). One outcomeis the ‘defective’state that has beenhollowed out, leaving only the appearanceof an outer form. 3 Nevertheless, there are those whoinsist that this kindof deterritorialization ofsovereignty masks the fact that the state remains aconstitutive memberof such international, regionaland transnational organiza- tions. Itis arguedthat the transfer ofsovereignty beyond the state shouldbe read asaprocess ofincorporating national states intoa ‘transnational state’structure. 4 As the actor and/orthe acted-upon,the state remains crucial toneoliberal globalizingstructures andprocesses. Yet,while wemayknow more speciŽ cally ofthe complexities in changingstate economicpower, we still knowless ofthe waysin which changing state –society relations are affected by,and affect, the conditionsfor transnationalized capital accumulationin this present era.Despite differences inthe perspectives aboveon state transformation,together they elicit animportant questionof how social orderis maintained in the midst of globalization,and with whatconsequences to the state andsociety. Eventhe WorldBank and the IMF—arguablythe international promotersand guardians of neoliberalism—afŽ rm transnational capital’s dependenceon the state toperform regulatoryfunctions in the economyand society, seen particularly in the aftermath ofthe Mexican,Asian, Latin Americanand Russian Žnancial crises of the late twentieth century.As the WorldBank admitted in 1997,‘ the state’s uniquestrengths are its powersto tax,to prohibit,to punish, and to require participation’. 5 This article asserts that akeystep in furtheringintellectual knowledgeof state transformation is to problematize the state’s relation to social order,ie the mannerin whichsocial orderis deŽned, constructed and regulated today that affects state legitimacy, the pathof development, and social relations and identities. Giventhe contexts ofnational, regional, and global economic restruc- turingprocesses, the state’s relation to social orderis shapedby the needto educatethe citizenry onthe real andperceived advantages of open markets and free trade,but in ways that donot erode transnational capital’s dependenceon the state asthe highest-level authorityto protect its interests within geopolitically delineated borders. Particularly inmulti-ethnic-religious societies, the questions ofstate legiti- macyand bases ofstate powerarise as economicrestructuring beneŽts some and marginalizes others,while the openingof the economicand immigration gates respectively totransnational capital andmigrant labourcan generate debates overnational sovereigntyand identity. Inwhat ways, then, can and do those who dominatethe state apparatusattempt to manipulate identities in the construction andregulation of social orderthat is able to take advantageof opportunities for wealth creation offeredby achangingglobal political economy,while maintain- ing(or not) the legitimacy with whichto govern? How do efforts at overtand/ or covertsocial engineeringin acontextof economic deregulation, liberalization andprivatization transform the bases ofstate power,and with whatconse- quencesin societies markedby histories ofcontestation overaccess to,and controlof, material andsymbolic resources? Thesequestions andtheir answers shouldhelp us offermore nuanced conceptualization and contextualization of 1036 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

state transformation in responseto the restructuring andharmonization of the national with the regionaland global economies. TheŽ rst section ofthis article presents aconceptualframework for examining the relationship betweenthe state andsocial order.Following this is acase study ofMalaysia, amulti-ethnic Southeast Asian countrythat has beneŽted from,and also has beenadversely aff ected byneoliberal globalization.The article con- cludes with asummaryof the historical phases characterizing the mutually dependentprocesses ofstate transformation andregulation of social order.

Coercionand consent: state regulationof social order Forover several hundredyears the resilience ofthe modernstate in its various forms has beenpremised onthe regulationof social ordercommensurate with negotiations betweenthe demandsof forces within andbeyond geopolitical boundaries.Di fferent historical models of(re)arranging the economyand social relations andidentities, justify andare justiŽed by distinct structures and processes ofgovernance. From the liberal welfare,the fascist, andthe commu- nist states, tothe changingstate today,the different forms takenare revealingof variousideologies andvisions involvedin regulatingsocial orderamidst chang- ingmodes of capital accumulationand new social forces. Thereare twomajor perspectives onthe state’s relation to social order.While theorists workingwithin the liberal pluralist andthe moreorthodox Marxist perspectives wouldagree that the state’s role is to regulate social order,they differ onhow this is to beachieved. The state, froma liberal pluralist perspective,is conceivedas autonomousof any speciŽ c interest groupin society, andfunctions exclusively to providepublic goods, eg security. 6 This form of state appearsto bepromoted by US foreignpolicy support for democracy movementsemerging from civil societies throughoutthe world. 7 Within the Marxist perspectives, the state is conceptualizedeither as tool ofthe bourgeois class toserve their interests, oras aprotectorof the capitalist system evenat the expenseof alienating the bourgeoisie. 8 Noneof the perspectives aboveis able to capturethe complexities ofhistorical andcontemporary state power.To assume that state poweris neutral,or exclusively class-based, oreven unconditionally oriented towards maintaining the capitalist system, respectively is to renderthe elite whocontrol the state apparatusas disembeddedfrom their communities’interests, orexclusively stratiŽed along the class dimensionof social life, orto assume that the history ofrelations betweendifferent groupscan be subordinated readily andwillingly to economics per se.As AntonioGramsci asserted, the state is formedby a variety ofsocial forces that cometogether in an‘ historical bloc’led bya dominantgroup with agoverningideology. Building on this framework,Robert Coxwrote in the 1980sthat the constitution ofthe state andgoverning ideology canbe more or less commensuratewith the dominantinternational political economicideology of the time. 9 Dependingon the contextthen, state powerthat is crucial to the construction andregulation of social orderis basedon intersections ofkey identity dimen- 1037 CHRISTINE BNCHIN sions suchas class, gender,race – ethnicity andreligion. Analyses ofdifferent moments in history (egthe differences betweenearly andlater postcolonial states) canreveal whyand how the bases ofstate powercome to rest on particular intersections ofidentity dimensions that mayand can transcend geopolitical borders. Accordingto Gramsci, the hegemonyof the state is embodiedin, and exercised through,the application ofstate powervia amixture ofcoercion and consent.Strategies ofcoercion (eg repressive legislation andthe use ofviolence) are appliedto silence dissent andto ensureacquiescence or compliance from social forces.Strategies ofconsent (eg civil servant wageincreases andedu- cation policies) proceedless coercively,if notunobtrusively, in socializing and encouragingthe citizenry toadopt different waysof thought, conduct and identities. Theobjective is toconstruct andregulate social ordercharacteristic of anewgeopolitically bounded‘ civilization’: If everyState tends to create and maintain a certaintype of civilization and of citizen(hence of collective life and of individual relations), and to eliminate certain customsand attitudes and to disseminate others, then the Law willbe itsinstrument for thispurpose (together with the school system, and other institutions and activities)… Inreality, theState must be conceivedof as an ‘ educator,’in asmuch asit tends precisely to create a newtype and level of civilization .10 State hegemoniccontrol over society is complete whenthe citizenry cometo believe that controlover their lives emanates fromthe self as opposedto an external source(s): Theassertion that the State can be identiŽ ed with individuals (the individuals of a socialgroup), as an element of active culture (ie, as a movementto create a new civilisation,a newtype of man and of citizen), must serve to determine the will to constructwithin the husk of political society a complexand well-articulated civil society, inwhich the individual can govern himself without his self-government therebyentering into con ict with political society— but rather becoming its normal continuation,its organic complement .11 Hegemoniccontrol, however, can never be complete as it requires the partici- pationof all the subordinategroups. The implementation ofhegemony elicits resistance, orcounter-hegemonic forces that Gramsci identiŽed as ‘wars of movement’(openly declared collective action suchas labourstrikes andguerrilla warfare)and ‘ wars ofposition’ (non-violent resistance suchas boycottsand sit-ins) against the state. 12 Contestations emergingfrom class, gender,racial –eth- nic and/orreligious differences overaccess to,and control of, the economyand the state canproduce and congeal new historical blocs that distinguish state transformation andregulation of social orderf romone historical era to another. Most notablytoday the state’s relation to social orderis framedby neoliberal globalization’s promise andeven insistence that openmarkets andfree trade— broughtabout by economic deregulation, privatization andliberalization poli- cies—are the preconditionsfor realizing the ‘goodlife’ in which citizen-consumers will beneŽt froma harmonizedglobal market offeringgreater choices ofproducts and services at competitive prices. How,then, is this characteristically consumption-oriented‘ goodlife’ incorporated into state regu- 1038 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA lation ofsocial orderas economicand immigration barriers are gradually dismantled to better competefor, and to enable the owof,transnational capital? Since oldand new social forces are encouragedto share some versionof this goodli fe,then it has to bepursued in waysthat donot disrupt the processes of capital accumulationand/ orseverely underminestate legitimacy. Hence,legis- lation andpolicies that seek to coercesome, while garneringconsent from others,become important tools withwhich to regulate social orderthat is distinctive ofwhat Gramsci called anew‘ civilization’. Arguably,the project ofcreating anewcivilization within existing geopoliti- cal bordersin this neoliberal era might befree ofclass-based, gendered, racialized-ethnicized and/orreligious biases, butit is not,because of historical andcontemporary circumstances inwhich some are better positionedthan others toreap the beneŽts ofeconomic restructuring. In this context,when and under whatcircumstances doacts ofresistance emerge,and against whomare they directed? Ofparticular import are analyses ofthe mannerin which shi ftingbases ofstate power(and the corollaries ofcoercion and consent strategies) undergird the regulationof social order.Such analyses cancontribute to deepening knowledgeof how neoliberal ideologyis adoptedand contextualized in different countries,hence variations incapitalist developmentpaths; andhow expressions ofresistance are related to,dependent on and/ orfragmented by the changing bases ofstate powerthat shapethe rulingelite’ s anddiff erent social forces’ relation to oneanother, and to transnational capital. It is in this waythat we might cometo better comprehendthe complexities that informstate transform- ation inthe globalpolitical economytoday. Belowis adiscussion ofthe relationship betweenthe state andsocial orderin Malaysia. SpeciŽcally, the analysis delineates the state’s deŽnition and regu- lation ofsocial orderat different historical junctures inwhich converge the changingbases ofstate power,paths ofdevelopment and ofŽ cial manipulation ofsocial identities inthe multi-ethnic country.

Malaysia Colonialera British rule in Malaya betweenthe late nineteenthand early twentieth centuries, most evidently,was distinguishedby the developmentof rubber and tin indus- tries orthe ‘twin pillars’of colonial economyto serve the growingdemands of USandBritish commercial andindustrial (especially warmate ´riel) interests. The rhetoric andpractice ofcolonial ‘goodgovernment’ to create andregulate social orderin the buildingof an export economy was exempliŽed by adivideand rule philosophy. 13 Policies andlegislation, especially with regardsto immigration, labour,land and education, oversaw the constructionof ‘ racial’traits and identities associated inextricably with speciŽc geographiclocations andecon- omic functions. Unableto attract local Malay laboureither forthe rubberplantations ortin mines, the British turnedto migrant labourfrom India and China. British colonial rule inIndia f acilitated the regulationof Indian migration that encour- 1039 CHRISTINE BNCHIN

agedthe inow of entire families to Malaya as akeyway of ensuring labour acquiescenceand self-perpetuation foragriplantations andinf rastructural projects. Initial colonial inability to regulate Chinese migration,however, left Chinese secret societies incharge of nearly every facet ofmigrant life—from the supplyand control of labour for the tin miningindustry to the repaymentof migrant debtand the provisionof recreational activities (egbrothels, gambling andopium dens). The mass migration ofChinese women,previously prohibited bythe Ch’ing dynasty, accelerated exponentiallyduring the 1930sbecauseof economicdepression in Chinaand colonial restrictions onthe in-migration of Chinese men. Inthe midst ofgrowing migrant populations,land legislation that set aside large tracts ofMalay reservation landwere designed conceivably to protect them fromthe vagaries ofa nascent capitalist economy.Yet, when it becameapparent that Malay smallholders presenteda serious threat to the European-controlled rubberindustry, the Rice LandAct 1917was enactedto prohibitthe cultivation ofany cash-crop other than rice onreservation landthat, in turn,was usedto reducethe foodimport bill offeeding the migrant populations. 14 Employerswere also actively discouragedfrom hiring outside speciŽc migrant groupsin orderto preventhorizontal linkages betweenthe communities. Meanwhile,the colonial educationpolicy secured the segregationof ethnic communities byestablishing English-mediumschools forthe childrenof the Malay elite (whowould come to staff the lowerechelons of the bureaucracy),and vernacular schools respectively forthe Malay peasantry,and the Chinese andIndian migrant communities. 15 Thesecolonial strategies ofcoercion and consent established the darkerlegacy of‘ goodgovernment’ . Constructedand naturalized traits andidentities particular to eachethnic groupran concomitantly with the socioeconomicsegregation of the Malay,Chinese andIndian peoples. The Malays, whomostly lived in the rural areas, wereconsidered the lazy butpeaceful heirs ofthe country.The Chinese andIndians who had come to populate the emergingurban areas orwho weresegregated in miningand agriplantation land,were seen as hardworkingbut respectively unscrupulousand unhygienic in the conductof their everyday lives.16 While Chinese access totheir community’s pooledresources gradually producedtraders andbrokers who mediated betweenEuropean capitalists and the Malay peasantry,Indians were mostly expectedto providelow wage labour forinfrastructural projects andagriplantations. Constructedgender traits, onthe otherhand, were constant remarkablyacross ethnic boundaries:beyond domestic labourin the household,migrant womenespecially werechannelled into econ- omic activities (includingf orcedsexual services) that afŽrmed the belief of women’s proclivity towarddomesticity. 17 Bythe early to mid-1900scolonial goodgovernment had adopted more overt strategies ofcoercion –repression inorder to contain class conict between workersand management in the industries. Wars ofmovement by organized laboursince the 1930seconomic recession weremet ultimately with aBritish declaration ofa State ofEmergency (19 48 – 60)that legitimized the use of physical forceagainst those whodisrupted capital accumulationprocesses. As a result, manyChinese workersrefused to join unionsbecause of the stigma that associated organizedlabour (especially the GeneralLabour Unions ( GLUs)) with 1040 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA the Chinese-dominatedCommunist Party ofMalaya. 18 Theauthorities then encouragedgreater Indianparticipation in unionsbecause of the belief that unionspeopled by the smallest andleast inuential ofthe ethnic groupswould notpose a threat to industries. 19 Themarkedly ethnic compositionof unions mitigated unitybetween workers. Tradeunion legislation was introducedand/ oramended to delimit the condi- tions inwhich industrial action couldoccur, while the Internal Security Act 1960 (ISA)empoweredauthorities todetain anyperson(s) for a speciŽed time period withoutrecourse to legal representation ortrial. Ina moveto co-opt and manage organizedlabour, the state established unionssuch as the MalayanTrades Union Congress (MTUC),the Congressof Unions of Employees in the Public andCivil Services (CUEPACS)andthe National Unionof Plantation Workers( NUPW). This newcivilization created bycolonial goodgovernment necessitated the arrangementof a ‘plural’social orderconsisting ofthree parallel anddistinct ethnic communities, with their correspondinginstitutions andessentialized identities. 20 As the peoplesand economy of British Malaya weregradually incorporatedinto the international divisionof labour at different positions and points in time, the primaryemphasis placedon ethnicity bycolonial legislation andpolicies notonly would overshadow other identity dimensions butwould also cometo beseen andused as the justiŽcatory cause fortransforming the postcolonial state andthe regulationof social orderin the country.

Postcolonialera Thedecolonization process was markedby contestation overwhich ethnic group wouldeventually assume controlof the state apparatusand the country.Malays, includingthose in the communitywho had advocated a strict Islamic modelof governance,overwhelmingly rejected the British proposalof a MalayanUnion that wouldinstitute equalpower sharing among the ethnic groups.The compro- mise solutionwas the ‘Bargainof “ 57”’ inwhich the Malays succeededin ensuringpolitical supremacyand what were called Malay Special Privileges, or MSP (suchas Malay reservation land,Islam as the national religion,and Malay royaltyas symbolic leaders) enshrinedin the constitution, in returnfor the grantingof citizenship tonon-Malays. 21 With British support,the Alliance Party (acoalition ofUnited Malays National Organizations( UMNO),Malayan Chinese Association ( MCA)andMalayan Indian Congress ( MIC)),led bya conservative Western-educatedmale elite fromthe respective ethnic groups,formally as- sumedcontrol on 31August1957. The immigration gates wereclosed ofŽcially toforeign migrant labourat independence,settling the ethnic distribution ofthe populationat roughly50 %Malays, 37%Chinese,11% Indians and 2% ‘ other’. 22 Bythe early 1960sthe Federationof Malaya becamethe Federationof Malaysia with the incorporationof Singapore, Sabah and Sarawak. The latter twoBritish protectorates wereincluded partly tomaintain aMalay majority since the populationof Singapore was overwhelminglyChinese. TheŽ rst decadeof postcolonial state governance,nevertheless, evinced relatively little changefrom its predecessor.The postcolonial state elite main- tained alaissez-faire relationship with capitalists that allowedcapital accumula- 1041 CHRISTINE BNCHIN

tion processes to continuerelatively uninterrupted;they were dominated by large Europeantrading houses and a small butgrowing number of Chinese family Ž rms.23 Existinginter-ethnic socioeconomicgaps soon were matched by intra-ethnic material disparities as Malay urbanin-migration occurredwithout the corre- spondingservices oraccess to resources.New social forces,especially the Malay middle classes that hadcome to staff the state apparatus,began openly to questionthe leadership bydemanding state interventionon behal fofMalays in the economy.It was duringthis periodthat the ethnicized andgendered noun, ‘Bumiputera’orsons/ princes ofthe soil, Žltered into mainstream publicdis- courseas areminderthat the countrybelonged to the Malay community(the views ofwomen were subsumed under their respective ethnic groups).Lee Kaun Yew’s 1964call fora ‘Malaysian Malaysia’, in whichno ethnic groupwould havepolitical supremacy,ultimately contributedto Singapore’ s expulsionfrom the federationa yearlater. Intra-ethnic andinter-ethnic class tensions reacheda climax inthe aftermath ofthe May1969 elections as the Alliance Party lost the covetedtwo-thirds majority that allowedfor uncontested constitutional amendmentsin Parliament. Ethnic–class conict, however,was channelledand interpreted throughthat whichwas painstakinglynurtured by the British andlef tunaddressedby the postcolonial state elite. On13 ,May1969 verbal altercations betweensome Malay andChinese demonstrators in KualaLumpur quickly disintegrated into ethnic violence,to beaccompanied by transformation ofthe state, development pathand social order.

The NEP Thecountry emerged from nearly two years ofemergency rule with Malay rejection ofthe ‘Bargain’that hadneatly apportionedcontrol of formal political powerto Malays, while leavingthe structures andprocesses ofcapital accumu- lation in Europeanand Chinese hands.In place ofthe Bargainwas the New EconomicPolicy 1971 – 90 (NEP)with its dual-prongedobjective oferadicating povertyand restructuring society to eliminate the identiŽcation ofethnicity with economicfunction and geographic location. The NEP was ablueprintfor a newpostcolonial civilization in Malaysia: it was anafŽ rmative action developmentprogramme designed to bringthe Malay community(the numerically largest ethnic group)to socioeconomicparity with the Chinese (whowere the morewealthy and powerful of the non-Malaygroups in the country).Malays notonly would retain political power,but would begin to take controlof the economyas delineated bytwoof the NEP’smain goals: the redistribution ofcorporate wealth fromnon-Malays to Malays, andthe creation ofa BumiputeraCommercial andIndustrial Community( BCIC)orthe Malay business andprofessional middle classes. State strategies ofcoercion ranged f romlegislation governingthe formal political process,to that ofparticipation in the economy.In the political arena, forexample, constitutional amendmentswere passed torestrict the parameters of publicdissent ingeneral, and public debate and discussion ofthe MSP in 1042 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

particular. UMNO,whichexperienced a changeof leadership andwhich became the undisputedsenior leader in the revampedNational Front(Barisan Nasional) coalition ofmainstream political parties, nowhad relatively unobstructedcontrol ofthe state apparatusresponsible forimplementing the massive social engineer- ingprogramme. In the economicarena, legislation suchas the Industrial CoordinationAct 1976( ICA)gaveauthority to the Minister ofTrade to grant and revokemanufacturing licences. The ICA was interpreted widelywithin the Chinese communityas astate tool tolimit their participation in newand lucrative manufacturingindustries (the ICA,however,would be amended several times in responseto Chinese capital ightand the mid-1980seconomicre- cession). Severelyweakened by the NEP,the non-Malaymainstream parties of the MCA and the MIC created their owninvestment corporationsto allay the fears, andto pool the resources,of their ethnic constituencies. Direct state involvementin the economyand society was seen as necessary to right anhistorical wrong.The Ž rst decadeof the NEP nurturedan interventionist state with parastatal limbs asFinancial PublicEnterprises ( FPEs)andNon-Finan- cial Public Enterprises ( NEPEs), symbolizedby a ‘redistribute Žrst, growthlater’ philosophy,were established onbehalf of the Malay community.Structured to garnerconsent from its major social base, UMNO– state trusteeship that was armed with ahost ofpolicies proceededto recreate anewcivilization bydisassociating Malay identity fromrural subsistence andlifestyles. Malay women’s employmentopportunities increased as the state apparatus expandedto serve the NEP objectives. Nonetheless,the womenwere restricted mostly to lower-level clerical staff positions. Quotasin education,the dispen- sation ofloans, and public and private sector employmentf avouredMalays in general,and Malay menin particular. Onlywhen it becameevident that transnational corporations,which were in the process ofrelocating their manu- facturingindustries to Free TradeZones ( FTZs), wantedto employ young women instead ofmen, did the Federal Industrial DevelopmentAuthority publish brochuresadvertising the ‘natural’skills ofMalaysian women:‘ Themanual dexterity ofthe oriental female is famousthe worldover. Her hands are small andshe worksfast with extreme care.Who therefore could be better qualiŽed bynatureand inheritance tocontribute to the efŽciencyof a benchassembly line thanthe oriental girl?’24 This increasingly gendereddimension of state powerand apparatus comple- mentedits ethnicized andsecularized bases. TheNational Cultural Policy 1971 that ranparallel to the NEP was expectedto create anational identity ofone culture,one language and one citizenry, with Malay heritage at its core.The intent was to encouragenon-Malays voluntarily, or guided by state institutions, to assimilate into Malay culture.Religion, however, would soon become a politicized issue with the rise ofIslamic movementsand their activities that threatenedthe moremoderate Malay-Muslims, andnon-Malays who were mostly non-Muslims. During the NEP’sŽrst decade,the changinginternational divisionof labour, togetherwith the rise ofcommodity and oil prices, facilitated state intervention in the economyand society withoutovertly invoking the zero-sumperception that gainf orone ethnic groupwould mean total loss forthe others.The path of 1043 CHRISTINE BNCHIN state-led capitalist development,however, generated contradictions that exposed otherlines ofsocial fragmentation.Expressions of class, genderand religious, differences weremet with the deploymentof a mixture ofstrategies ofcoercion andconsent. In this waystate powerbecame even more class-based, gendered andovertly (but superŽ cially) Islamicized. Duringthe 1970sandearly 1980s, repressive legislation (eg,the University andUniversity Colleges [Amendment]Act 1975,and the PrintingPresses and Publications Act 1984)were used to bandemonstrations andto depoliticize university campuses as Malay andnon-Malay students allied with the peasantry (who,increasingly, were made vulnerable to global  uctuations in commodity prices) tochallenge state privilegingof the industrial overthe agricultural sectors. Onthe otherhand, wage rises weregiven to civil servants to stem their supportfor the students, as anofŽ cial Islamization programmewas promotedto quell the complaints of‘ fundamentalists’or Islamicists that the development pathhad become increasingly capitalistic, Westernized andsecularized. Further, the National PopulationPolicy 1984,promoted ofŽ cially as akeysolution to anticipated labourshortages inthe twenty-Žrst century,was announcedin a social contextdistinguished byheightened public discussions ofthe demeanour andalleged immoral recreational activities ofyoung women workers in FTZs, and Islamic groups’perceptions that capitalist developmentwas aprimarycause of men’s real andperceived loss ofcontrol over their womenfolk. 25 Hence, this pro-natalpolicy would begin to legitimize the redomestication ofwomen from certain classes as DrMahathir Mohamad,who ascended to the prime minister- ship in 1980,suggestedthat womenshould stay hometo have more babies if theycould afford to do so. 26 With the election ofPrime Minister DrMahathir at the beginningof the NEP’s seconddecade, a greater sense ofMalay nationalism was introducedinto the economy.Within the Žrst fewyears ofhis leadership,the ownershipand control ofEuropean corporations that date backto the colonial era (eg,Guthrie, Sime Darbyand Dunlop) were secured and transferred to state agencies andcorpora- tions linkedto UMNO.The‘ LookEast’ and ‘ Malaysia, Inc’slogans encompassed asharpshi ftto the East Asian (speciŽcally SouthKorean and Japanese) models ofindustrialization. Inthis Malaysian state-led heavyindustrialization pro- gramme,the much-neededcapital increasingly came in the formof foreign loans.However, the globalcollapse ofcommodity and oil prices bythe mid-1980ssoonforced what was perceivedas the state’s retreat fromthe economy. Postcolonial state efforts to redress the colonial legacyby of Žcially levelling the playingŽ eld forMalays in anera ofheightened interstate competition for transnational capital meant muchmore than the provisionof jobs andthe redistribution ofcorporate wealth. What could be called a‘Polanyiandouble movement’emerged in which old and new social forces mobilized to demand protective measures against the real andperceived consequences of a social engineeringprogramme embedded in the capitalist developmentpath. 27 For example,organized labour’ s demandfor the right toprotection at work;environ- mentalists’for the right to atoxic-free environment;indigenous peoples’ for the right ofcontrol of ancestral land; the Chinese community’s forthe right to 1044 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

cultural continuity(eg language and education issues); andIslamicists’ f orthe right to religious lifestyles andnational governance,assumed the forms of variouswars ofmovement and wars ofposition against the state. Theopposition parties also called fortransparency, especially ineconomic privatization projects andoversight of FPEs.28 Thesedistinctly issue-oriented activities collectively presentedan assault onthe UMNO-controlledstate’ s legitimacy. By1987 divi- sions within the rankand Ž le of UMNO overcontrol of the contentand direction ofpolicies forthe Malay communityresulted ina highlypublicized legal battle, andtemporarily threatenedDr Mahathir’ s controlof the partyand the state apparatus.Raising the spectre ofthe ‘May13 riots’ , the state deployedcoercive – repressive forcein the formof ‘ OperationLallang’ to maintain social orderby weedingout alleged ‘communist’and ‘ racial – religious’extremists. Inthat year, the ISA was invokedto detain ahost ofMalays andnon-Malays f romall walks oflife, withoutrecourse to trial. 29 As dissent was quelled,the state elite continuedto adjust quicklyto the changingglobal and regional economic environments. Ongoing and proposed infrastructural projects, privatization of FPEs and NFPEs, tax holidays,Ž nancial liberalization andtariff reductionswere some ofthe policyresponses aimed at attracting new owsof transnational capital redirected to Southeast Asia after the 1985Plaza Accordthat realignedG7 currencies. 30 Malaysia, with its improvingtransportation andcommunication networks, and the presenceof a relatively depoliticized labourforce, quickly became an even bigger host to foreigndirect investment ( FDI)in the region.Colonial andpostcolonial era labour legislation, ‘in-house’unions in the electronics industries, andthe continued ethnically skewedunion memberships in certain sectors, convergedto ensure labouracquiescence. Despite, andperhaps because of the NEP,the association of ethnicity with economicfunction continues to acertain degreeto characterize unionmembership. Although Malay unionmembership increased becauseof employmentquotas, it was foundthat Malays dominatedpublic sector unions suchas those relating tocivil defenceand agriculture, whereas the percentageof non-Malayswas higherin private sector unionsrelating tothe bankingand several service industries. 31 Different industryissues thenaffected predominantly different ethnic groups. Most of the NEP’srestructuring targets weremet towardsthe endof its term: egthe ofŽcial povertyrate declinedfrom 49.3 %in 1970to 15%in 1990,as the percentageof registered Malay professionals (egarchitects, doctors,and so forth)and Malay ownershipof corporate wealth within the twodecades respect- ively rose from47% to 58.8%,and f rom2.4% to 20.3%. 32 TheMalay middle classes hadbecome a major social base within UMNO,as the Malaysian middle classes becamekey social forces ofthe state.

‘Wawasan2 020’:buildinga modernMalaysian civilization

The post-NEP periodchallenged the postcolonial state elite’s ability to negotiate atenuouspath between wholly giving into the demandsof neoliberal economic restructuring andsubsequent political reforms (hencerisking destabilizing the social order),or emphasizingthe particularities ofstate-led development(hence 1045 CHRISTINE BNCHIN

risking alienating transnational capital requiredfor development). The path chosenwas to continuethe NEP in the formof the National DevelopmentPolicy 1991– 2000 (NDP),albeit with fourmajor policyshifts: to encourageprivate-sec- tor led growth;to concentrate on eliminating serious poverty;to expand the developmentof BCIC;andto f ocuson human resource development. 33 Subse- quently,Dr Mahathir’ s ‘Wawasan2 020’(Vision 2020)offereda long-term comprehensiveplan to realize ‘asociety that is democratic,liberal andtolerant, caring,economically just andequitable, progressive and prosperous, and in full possession ofan economy that is competitive, dynamic,robust and resilient’ , by the year2 020. 34 Despite the NEP’sapparentsuccess inlevelling overall socioeconomicdi ffer- ences betweenthe Malay andChinese communities, the perceivedneed f ora social engineeringprogramme remained because of major interrelated develop- ments beyondand within the country.Increased interstate competition for transnational capital requiredforward-looking strategies, especially as the logic ofcapital accumulationin Asia bythen had illustrated the fallacy ofthe ‘ying geese’formation of Ž rst, secondand possibly third-tier newlyindustrializing countries (NICs) led byJapan. Further, the expansionof the Malaysian middle classes elicited the questionof how state transformation in the courseof economicrestructuring couldoccur without the loss ofunprecedented power that was gainedover the economyand society duringthe NEP era. Thenet consequencewas asocial engineeringprogramme designed to play downparticularized identities evenas it renewedthem, and to demonstrate the state’s retreat fromthe economyeven as it remainedsomewhat entrenched in shapingand allocating the structures andprocesses ofcapital accumulation.The twentieth century’s last decadewitnessed state implementation ofnew strategies ofgarnering consent, and the invocationof old strategies ofcoercion that relied onthe use ofphysical forceand repressive legislation. Giventhe earlier lesson ofSingapore’ s failed SecondIndustrial Revolution, togetherwith emerginglow wage economic competition fromthe People’s Republicof China and Vietnam, the state respondedby participating in the establishment ofsubregional growth zones (eg Johor – Riau– Singaporegrowth triangle) that capitalized onthe comparativeadvantage of each country’ s contributingregion. 35 Equallyimportantly, preparations were underway in Malaysia to builda stronginformation technology sector while tryingto maintain the competitiveness ofthe manufacturingand agriplantation industries. Malaysians wereexhorted to upgrade their skills, most notablyin the effort to nurturean ‘IT’society that values anduses informationtechnology as the means forcapital accumulationin aglobalizingworld. The construction of the ‘Multi- media SuperCorridor’ ( MSC)outside KualaLumpur would be the region’s geo-cyberspatialsite forinnovations in a variety ofareas suchas ‘e-government’ and‘ e-commerce’. Oneconsequence of Vision 2 020in general,and the constructionof the informationtechnology sector in particular, was that Malaysian workerswere increasingly reluctant to occupylow-wage and low-skill jobs.Yet the lowwage labourdemands of various industries hadto be met eventhough the focuswas primarily ondeveloping human resource capabilities foran IT society. The 1046 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

transnationalization oflabour offered a ready-madesolution. Malaysian employ- ment ofmigrant workersfrom the Philippines andIndonesia had already begun as early as the 1970sbecauseof low-wage jobs in domestic service and agriplantations madevacant by the NEP’spro-Malayurbanization policy and the relocation oftransnational manufacturingindustries tothe country.By the late 1980sgrowinglow-wage labour demands prompted ofŽ cial regulationand encouragementof construction, agriplantation, manufacturing, domestic service andtravel-industry related workersfrom South and Southeast Asia. Theopening of the immigration gates, then,became an important state strategy formodi fyingthe developmentpath while garneringconsent from Malaysian business andhousehold employers. Yet the increasing populationof foreignmigrant workersthreatened to undermine state regulationof social order. By1998 there weresome twomillion documentedand undocumented migrant workersin alabourforce of nine million. Everytwo in Ž veworkers were foreignerswho occupied temporary low-wage jobs. Even in the midst ofthe 1997– 98Ž nancially inducedeconomic recession, anearlier ofŽcial announce- ment to repatriate nearlyone million migrant workershad to berescinded becauseof industry-related complaints that, despite the recession, Malaysian workerscontinued to reject suchjobs. 36 Thestate continuesto attempt to shapemigrant identity andto regulate migrant movementin society byrelying on immigration controls,and on discourses that construct migrants as ungrateful‘ guest’workers who engage in extra-legal activities andwho avail themselves ofpublic services intendedfor Malaysians. Public managementof migrant identities has producedan ‘ insider – outsider’distinction in society that enables the employmentof f oreignworkers, yet mitigates overall Malaysian supportf orlegitimate migrant complaints and rights.37 Asthe economyexperienced sustained growthat roughly8% per annum, the entire countryseemed immersed inhelping to realize Vision 2020.The in ow oflong- and short-term capital, hastenedby the liberalization ofŽ nancial services, provideda sense ofunstoppable wealth creation that encouragedthe Malaysian middle classes’consumption of high-end goods as aprincipal manner ofdifferentiation fromthe workingclasses; speculative activities in real estate andshares ofpublicly listed corporations;and the constructionof even more massive infrastructural projects. 38 TheŽ rst half ofthe 1990sthat celebrated Malaysian economicachievements also seemed totemper the genderedand ethnicized bases ofstate power.After nearlyone decade of lobbying eff orts bythe Joint ActionGroup of 2 0women’s organizations,Parliament Žnally passed the Domestic ViolenceAct 1994( DVA) that criminalized violenceagainst women.There continue, however, to be difŽculties in consistent enforcementof the DVA becauseof existing attitudes withregard to domestic violence. TheNational Cultural Policyunderwent revision aswell. In1991 Dr Mahathir introducedthe conceptof ‘ BangsaMalaysia’ or the Malaysian nation,in which the different ethnic groupswould accept the constitution, speakBahasa Malaysia (Malay language)and consider themselves equalcitizens ofthe country. 39 Thus, 1047 CHRISTINE BNCHIN

the Malay,Chinese andIndian peoples were encouraged to retain their respective cultural identities underthe rubricof a Malaysian national identity. Thereplacement ofa cultural assimilationist stance with that ofcultural integration was revealingof the mannerin whichthe UMNO-controlledstate couldretain its legitimacy, whichhad been premised onthe ability, Žrst and foremost,to protect Malay interests. State productionof difference— inthis case, the redrawingand re-emphasizing of cultural boundaries—became a necessity in atime characterized as well bystate productionof similarity— eg nurturing consumption-orientedmodern Malaysian middle-class lifestyles andidentities to expeditethe growthof capitalist markets, andpromoting speciŽ c utilitarian values deemedconducive to realizing anindustrialized knowledge-basedecon- omy.40 Theglobal ascendancy of neoliberalism that rejects overtstate interventionin the economyposed an even greater challengeto UMNO state trusteeship. How- ever,economic privatization projects in particular mainly fell into the handsof keypoliticians within UMNO,their major supportersand, to alesser extent, MCA and MIC.This resulted in the emergenceof a multi-ethnic groupof politically connectedMalaysian tycoonsat the helm ofpublicly listed conglomerates graduallybuilt fromvertical andhorizontal integration andcontrol of industries. Transnationalcapital’ s initial willingness to overlookthis as Žnancial services wereliberalized, andthe WorldBank’ s designationof Malaysia as a‘miracle’ economy,especially encouragedthe massive inow of short-term portfolio funds.By 1996 the KualaLumpur Stock Exchange ( KLSE)was rankedamong the world’s top10 bourses in terms ofmarket capitalization andvolume transac- tions. Arguablythen, the UMNO-led National Frontruling party and the state remainedsomewhat entrenched in the economy,albeit inproxy form. 41

Patriots andtraitors Theperiod of sustained economicprosperity was notwithout criticisms ofthe state’s privatization projects andcontracts, especially in relation to construction ofthe RM15billion BakunDam. With aoodsize ofSingapore, the damwas to bea major sourceof hydroelectric power and national pridefor the country. Fromthe awardingof the contract withouttender, to the projectedamount of timber revenueand state compensationf ordisplaced indigenouscommunities, the Bakunproject wouldbecome an important issue aroundwhich a coalition of 40organizationssucceeded in transcendingethnic, religious, genderand class differences tostop construction of the dam. Thecoalition, called Gabungan,consisted ofseveral oppositionpolitical parties andnon-governmental organizations ( NGOs)that hadspeciŽ c constituen- cies suchas the youth,indigenous peoples, women and labour, and that specialized inissues rangingfrom the environment,social justice, humanrights, religion andtrade. The coalition scaled downand across to link with various local communitygroups, and it also scaled upto link with foreign NGOs and states inorder gain support from the domestic andinternational publicagainst the Bakunproject. 42 Gabungan’s ability to tease outthe potential interrelated consequencesof the 1048 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

Bakunproject presenteda veryviable andcollective threat to the state as it becameextremely difŽcult forthe authorities torevert toaccusations ofcommu- nist, orextremist religious andcommunal in uences. The coalition’ s wars of position,especially inthe formof write-in campaignsand non-violent demon- strations, wereaimed at publicand private sector institutions that haddirect and indirect interests inthe project. 43 Onseveral occasions,state authorities relied on repressive legislation suchas the Police Act 1967to prohibit or to disperse publicgatherings. 44 Theclearly irritated Prime Minister said, inresponse to a lawsuit wonby a groupof indigenous people to stop workon Bakun,that ‘It is abouttime that our NGOsthinkof themselves asMalaysians …Theyare totally irresponsible. They donotlove their countryat all.’45 DrMahathir andhis cabinet members accused Western interests ofinciting Malaysians to protest against whatwas considered necessary forcontinued rapid industrialization. 46 Fromthe state elite’s perspec- tive, Gabunganthreatened to betrayover two decades of efforts to movethe countryfrom a developingto adevelopedstatus. Althoughthe Courtof Appeals overturnedthe verdict,the Bakunproject wouldbe postponed indeŽ nitely becauseof the Žnancial crisis that affected Asia in1997. As akeyaspect ofneoliberal globalization,the liberalization ofŽ nancial services andcapital accountsin the regionand elsewhere occurredwithout adequatenational andinternational oversightof Ž nancial ows.This hadthe effect oflegitimizing the commoditization ofcurrency and what could be called ‘casino capitalism’, especially in emergingmarkets. 47 Theprecipitating and structural causes ofthe 1997Ž nancial crisis continueto bedebated today, with emphasis placedon a combinationof national andinternational factors. 48 At the heightof the crisis inMalaysia, the ringgit was devaluedby nearly 50 %while the KLSE fell in valueby roughly 70 %.Whenthe crisis led to aneconomic recession, ensuingpolitical andsocial unrest threatenedto fragmentthe state and underminesocial order.Via amixture ofconsent and coercion strategies however, UMNO was able to retain its leadership ofthe National Frontruling party,and its controlof the state apparatus. Ofparticular relevancehere is the continuationof the ‘patriot – traitor’theme in state regulationof social order.During the early phaseof the crisis, expressions ofparticularized identities andinterests weresubordinated to the larger andmore patriotic concernsof defending the currencyand the economy. Extensivemedia coverageof the Prime Minister’s call toregulate international currencyspeculation, and his criticism of IMF programmesin the worst-hit Asian countries,directed publicdiscourse to the exclusively international causes ofthe sharpeconomic downturn in the country.Daily reports offoreign interests, especially Western corporations,purchasing the cheapassets offailed banksand Žnancecompanies from Tokyo to Bangkok bolstered his argumentthat the crisis inAsia was planned,at worst,to facilitate Western recolonizationof the country and region.49 Evenopposition leaders voicedtheir supportf orthe Prime Minister’s call toregulate international foreignexchange transactions, as the 1998Consumer International ConferenceidentiŽ ed the absenceof international Žnancial andmonetary supervision as responsible forprecipitating the crisis in the region.50 1049 CHRISTINE BNCHIN

Keysocial forces rallied to the defenceof the Prime Minister. Wanita (women) MCA’scampaignsfor women to cometogether and demonstrate their national loveand pride had seen the participation ofbetween 5000 and 10 ,000 womenin each state, while Wanita UMNO’sEhsanWanita Campaignencouraged womento save forthe country. 51 Malay andnon-Malay middle-class women especially pledgedto save as muchas theycould, to donatetheir jewellery as a wayto increase the country’s reserves and,when possible, tobuy only Malaysian-made products. 52 Publicexhortation of patriotic acts shapedthe responses oforganized labour as well. Theproposed MTUC and CUEPACS boycottof Ž sh suppliers (forhiking prices) led topublic criticism bythe Federationof Malaysian Consumers’ Association ( FOMCA),which argued that, giventhe circumstances, aboycottof producerswould be counter-productive since theytoo were Malaysians affected bythe depreciatingcurrency. Instead, FOMCA publiclysuggested that the other twounions stick totheir original missions ofaddressing worker rights. 53 Despite attempts to connectthe issue oflabour to consumerrights, coalition building between MTUC, CUEPACS and FOMCA was mitigated bythe latter’s sense of preservingand appealing Ž rst tonational unity. Theseemingly smoothpath that patriotism tookin suffusingthe publicarena soonbecame con ictual whenthe state elite werefaced with the needfor effective economicpolicy responses. Their responses revealedcontradictions inherentin tryingto balance the spirit ofthe NEP with the requirements ofand foran open economy. In his capacity as FinanceMinister, DeputyPrime Minister AnwarIbrahim introduced ‘ IMF measures without IMF assistance’to curtail sharplypublic expenditure, imports andcredit growth. 54 Notonly did the Prime Minister disagree with the measures, healso arguedthat relaxation ofthe NEP’sMalay corporateequity rule wouldbe temporary (to allow non-Malaysto buyinto Malay-owned corporations), as hepreferred to keep corporate control inMalaysian, rather thanforeign, hands. 55 However,in order to maintain foreign investor conŽdence in the economy,Anwar insisted that the relaxation ofthe equityrule was apermanent,and not a temporarypolicy. Torn between the need to lure backinvestment capital toprevent further economic downturn, and the needto protect Malaysian interests in generaland Malay interests in particular, Anwar’s choiceof the formeroption projected him as pro- IMF andpro-West, especially inthe light ofthe parameters ofpublic discourse that hadalready been established. This potential fragmentationof state powerwas reected andexacerbated by the traditional mass media in whichtelevision andnewsprint reports hadthe effect ofcreating twocategories ofpublic voice, ie whatit meant to bea patriot andwhat it meant to bea traitor ofan economically embattled country.The constructionof this oppositionaldyad in public discourse servedto curtail criticisms andaccusations ofinequality andinjustice arising frompolicies that hadgreatly beneŽted politically connectedMalay, Chinese andIndian tycoons andtheir complexwebs of corporate holdings. At the April 1998 UMNO general assembly, supportersof the DeputyPrime Minister called foran end to corruptionand nepotism in the light ofthe state’s proposeduse ofEmployee ProvidentFunds to bail-out tycoonsand their corporationsthat werelinked 1050 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA especially to the Prime Minister’s sons.Dr Mahathir counteredby insisting that, if hewas guiltyof nepotism, cronyism and corruption, then so was everyMalay beneŽciary ofthe NEP;andhe also warnedMalays off ollowinga leader who wouldhelp foreigners recolonize the country.According to an UMNO member, the instant that sucha connectionwas madebetween the NEP andf avouritism, most ofthe prime minister’s UMNO critics andpotential detractors ‘hadno other waybut to defendthe NEP’.56 InSeptember 1998 the social constructionof the patriot andthe traitor in publicdiscourse helpedjustify the simultaneous application ofa uniquestrategy to garnerconsent f romthose whowould consider themselves patriots, anda strategy ofcoercion – repression to purgethe state apparatus, UMNO andsociety of those whowere considered traitors. Capital controlmeasures, egwithdrawing the Malaysian ringgit frominternational currencyexchange markets, instituting aformal pegof RM3.8 to the dollar andseverely restricting the out-ow of short-term transnational portfoliof unds,were implemented to stabilize the economy.On the same daythat the measures wereannounced, Anwar Ibrahim was sackedfrom his positions ofDeputy Prime Minister, FinanceMinister and UMNO’sDeputyVice President. Forthe Žrst fourmonths af ter the imposition ofcapital controlmeasures amidst political andsocial turmoil followingthe eventualarrest ofAnwar, transnational portfoliofund managers registered their displeasure byrefusing to invest furtherin the KLSE,andby downgrading public- and private-sector securities to junkbond status. Bymid-1999, however, sensing that the region was poisedf ora slow butsustained recovery(the economiesof the regionhad begunto exhibit signs ofstabilization, andbourses from Japan to Singapore beganto register hugepercentage increases) the state graduallyrelaxed some of its capital controlmeasures. Despite the existence ofcapital controlmeasures, transnational portfoliofunds that hadignored the KLSE beganto returnin order to bepositioned to take advantageof a regionaleconomic recovery. According to afundmanager f romJP Morgan,‘ politics is nolonger the governingissue whenyou look at investing in Malaysia. It has ahighstock ofdomestic savings, verylittle external debtand an economy that is heavilyexport-oriented’ . 57 In brief,so longas social orderwas maintained,most forms oftransnational capital wouldoverlook some existing barriers to the owinto andout of Malaysia. TheMalaysian public’s endorsementof state efforts to stabilize the economy was quicklysubdued by mass demonstrations that eruptedin responseto the arrest ofAnwar and his associates, andthe discoveryof the physical abuseto whichhe was subjected while in police custody.Key strategies ofcoercion – re- pression,such as the use ofriot police armedwith tear gas,and the ISA, were deployedrespectively to disperse the demonstrators,and to silence dissent. Meanwhile,some strategies ofgarnering consent involved giving civil servants year-endbonuses despite the sharpeconomic downturn, and creating agovern- ment internet site to encouragethe publicto express supportfor Dr Mahathir. Inthe light ofthe state’s use ofphysical forceas well as its direct andindirect controlover traditional mass media,some Malaysians tooktheir non-violent wars ofposition to cyberspace. More than 50 internet sites wereset upfornews, analyses andcritiques ofpolitical economicgovernance in the country. 58 1051 CHRISTINE BNCHIN

Althoughpossibilities forcensoring cyberspatial discourse wereannounced, the state elite remainedconstrained by their promise to long-termf oreigninvestors that there wouldbe no restrictions onthe movementof capital andinf ormation within the MSC andthe industrial sector. Todo otherwise wouldbe to risk disrupting FDI forthe developmentof the high-technologycorridor, and for deepeningindustrialization. Threemovements emerged in response to the political crisis in the country. Anwar’s ‘reformasi’movement, patterned after the successful Indonesianstu- dent-ledmovements that toppledSoeharto, was characterized bysupport from his Islamic constituency(established whenhe was the formerleader ofAngkatan Belia Islam Malaysia, anIslamic youthmovement). The social base ofGagasan (Coalition ofPeople’ s Democracy)consisted mostly ofthe urbanmulti-ethnic middle classes, whereasGerak (Malaysian People’s Movement)was dominated byrural andworking class Malay-Muslims. Althoughthe movementsempha- sized different issues, rangingf romAnwar’ s case topolitical reformand/ or social justice, theycollectively agreedon a speciŽc demandfor reform of state regulationof social order,ie the repeal ofthe ISA.Members ofthe movements wouldlater negotiate the formationof the Nasional Justice Party ( NJP) or Parti KeadilanNational led byDr Wan Azizah Wan Ismail (spouseof Anwar Ibrahim)in an attempt towin control of the state apparatus. SigniŽcantly, oppositional discourse didnot directly orconsistently criticize the regionaland global neoliberal economicrestructuring processes that encour- agedthe Malaysian state’s gradualopening of the economyduring the past decade,nor the pressures onthe entire regionto heightensuch processes during the late 1990s. Rather,the focuswas primarily onthe processes bywhich political favourswere apportioned in the economy,and on state repression of dissenters. Giventhe history ofthe political economyof development in multi-ethnic Malaysia, this hadthe effect offragmenting social forces along speciŽc intersections ofidentity dimensions. Major social forces’support for, or resistance to,a state apparatusled byDr Mahathir depended,then, on their privilegingof certain identity dimensions over that ofothers. In some cases, ethnicity was privilegedover religion and/orclass while,in othercases, ethnicity andreligion weresubordinated to class. UMNO’s 1998unofŽ cial surveyof the publicrevealed that sevenout of 10 Malays were unhappywith the stewardship ofthe country. 59 Thenon-Malay middle classes weresaid tobe supportive of Malay-led demandsf orpolitical reformbut this supportwas mitigated byconcern over Anwar’ s overtlyIslamic social base. Towardsthe endof 1998, and in the midst ofmass demonstrations after Anwar’s arrest, the Malaysian television stations reversedan earlier stance ofrefusing to broadcastimages ofethnic andsectarian violencein Indonesia.The newly released images werethus intendedto demonstrate to the Chinese andthe more moderateMalays the potentially negativeconsequences arising fromtheir participation in attempting to topplethe UMNO-led National Frontparty, and from controlof the state apparatus.The Malay, Chinese andIndian business elite continuedopenly to supportDr Mahathir andhis policies aimed at ensuring social orderand protecting domestic capital. 60 Ultimately, aperceivedneed to maintain Malay political hegemonyin the 1052 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

contextof a semi-openeconomy was revealedin comments madeby the respective leaders of UMNO and NJP.Inhis responseto the demandsof the Chinese-dominatedopposition Democratic ActionParty ( DAP)fora ‘Malaysian Malaysia’, DrMahathir remindedMalays that the conceptwas athreat totheir identity, andthat ‘it was aknownfact that Malaysia previouslywas called “TanahMelayu” [the Malay land]’. 61 Whenasked about the Malay base of NJP, DrWan Azizah said ‘butwe hope it will also besupported by non-Malays. Remember: this movementstarted fromthe Malays. It is natural forthe leader to beof Malay ethnic origin.’In reply to aquestionabout her plan to continue ornot the spirit ofthe NEP,she said that, ‘Justice forall wouldinclude moving towarda society that values ability andexcellence. But the main goals ofthe policy [NEP]—the eradication ofpoverty and the stabilization ofethnic relations througheconomic justice— must remain.’62 Theexisting lines ofsocial fragmentation,together with the UMNO-led ruling National Front’s ability to manipulate them at crucial moments,helped prevent achangeof political leadership inthe generalelections ofNovember 1999. While Partai Se-Islam Malaysia ( PAS)succeededin gainingcontrol of Treng- ganu,together with its previousstronghold of Kelantan in the northernpart of the peninsula,the DAP wouldlose anumberof parliamentary seats inthe general elections becauseof Chinese retaliation forits collaborationwith the overtly Muslim-based PAS inthe formationof NJP. Despite the Žnancial crisis andconsequent political andsocial unrest,the state in Malaysia is neither onthe vergeof disintegration noron the precipice of transformation into onethat unconditionallypromotes private-sector economic competition that is blindto social differences.Transnational capital requires the state’s existence to monitororderly transactions in the economyand to regulate social order,as the state requires capital fordomestic legitimation andpursuit of Vision 2020in amulti-ethnic context.Increasingly, the UMNO-controlledstate’ s raison d’eˆtre rests onan ability to enablemost forms ofglobalized capital accumulation,while regulatingsocial orderthat is characterized bymoderate,as opposedto ‘fundamentalist’Malay-Muslim political hegemony.While some social forces maylook to the globalarena f orsupport against whatthey perceive asanunforgivingly authoritarian state, others continueto looktowards existing state structures forprotection of their varyinginterests andrights.

Conclusion As analysedin the case ofMalaysia, state transformation at everyhistorical juncturehas beenparallelled bychangesin developmentpaths andthe regulation ofsocial order.During the colonial era,British ‘goodgovernment’ meant the establishment andnaturalization ofa ‘plural’order that segregatedMalays from Chinese andIndians in general,and that distinguished men’s workfrom women’s workin particular. Inthis way,the regulationof social orderdeemed pertinent to Europeancontrol of the economywas promotedinstead asprotect- ingMalays orthe heirs ofthe land,in acontextof growing communities ofthe migrant Chinese andIndian labour. After independence,economic inequalities that fuelled the 1969ethnic riots 1053 CHRISTINE BNCHIN

led to the expansionof an interventionist postcolonial state basedon more overtlyclass-based, gendered,ethnicized andsecularized power,and on a similarly conceivedvision ofsociety. The UMNO-controlledstate proceededto create anewcivilization bypursuingan enormous social engineeringprogramme to redress the colonial legacyof associating ethnicity with geo-economic functions.While the NEP mayhave levelled overall socioeconomicdiff erences betweenthe Malays andthe Chinese,it also succeededin generating and highlightinga host ofdiff erences alongspeciŽ c intersections ofgender, ethnic- ity, class andreligion ineveryday life. Theexpressions ofsuch differences were managedunder the rubricof coercion and consent strategies. Since the midto late 1980schanging owsof transnational capital led to an apparentretreat ofthe state fromthe economyand society as economic interventionwas replacedby policies favouringeconomic privatization, liberal- ization and,to some extent,deregulation, while cultural assimilation was relinquishedin favourof cultural integration.This transformation froman interventionist to aseemingly competition state, however,masked what was the continuationof the social engineeringprogramme in which the state soughtto regulate social orderby tryingto manage the changingdemands of forces within andbeyond the country. The1997 Ž nancial crisis revealeddeep crevices in the Malaysian economy andsociety. Eventhough rapid industrialization hadexpanded the Malaysian middle classes, wealth creation was inordinatelybiased towardskey tycoons and their large conglomerateswith ties to prominentpolitician –bureaucrats.By September1998 domestic allegations andcriticisms ofstate-sanctioned corrup- tion,cronyism and nepotism weremet byovert state re-interventionin the economyand society. Strategies ofcoercion and consent were applied, not from the perspective ofmediating class contestations per se,butfrom the position of protectingMalaysians against anunregulated global Ž nancial system, against alleged covertWestern attempts to recolonizethe country,and against alleged domestic traitors whowould help the latter complete their task. Physical force andrepressive legislation wereused to suppress mass demonstrations even thoughthe silencing ofcritical discourse was mademore difŽ cult, in large part, becauseof continued efforts to create anIT-based economy and society. It was duringthis periodthat state regulationof social orderentailed imposing capital controlmeasures tostabilize the economyin general and, in particular, to protect domestic capital against furtherŽ nancial instability. Atthe same time, it also entailed the manipulationof two layered and related sets ofmeanings in social identities: the civic responsibilities ofcitizen-patriots, andthe resurrection ofethnic and/orreligious-based afŽliations that servedto circumventanticipated resistance from,and coalition-building between, different sets ofsocial forces. Thus,late twentieth centurystate regulationof social orderin Malaysia evinceddifferent strategies ofcoercion and consent applied or modiŽed to help create anewmulti-ethnic ‘civilization’that cansimultaneously embraceand reject different aspects ofneoliberal globalization.So long as the keyinterests ofthe state elite, different forms oftransnational capital, andvarious sets of social forces dovetail in the regulationof social order,resistance towardsthe state and/ortransnational capital will thenbe fragmented.Despite, andperhaps 1054 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA becauseof this, the pathof capitalist developmentand state transformation that has tobe mediated throughhistorical legacies in Malaysia, cannotassume the wholesale adoptionof neoliberalism in its economicand political dimensions. Thecase studyof Malaysia illustrates that the overall unfoldingof the drama ofneoliberal globalization is notpredetermined, as previouslyanticipated in the ‘endof state’ and ‘ globalvillage’ perspectives. Furtherstudies onstate regu- lation ofsocial orderelsewhere in the worldshould advance our knowledge of the waysin whichneoliberal globalization is affected by,and affects, state transformation.

Notes Theauthor wishes tothank Hamid Mowlana,Diane Singerman,James HMittelmanand the anonymous reviewers fortheir critical comments onearlier draftsof this article. 1 See, forexample, M McLuhan& BRPowers, TheGlobal Village: Transformations in World Life and Mediain the Twenty-Ž rst Century ,New York:Oxford University Press, 1989;K Ohmae, TheEnd of the NationState: The Rise ofRegional Economies ,New York:Free Press, 1996;and J MGuehenno, The End ofthe Nation State ,StPaul, MN: University of Minnesota Press, 1995. 2 PGCerny,‘ Paradoxesof the competition state: thedynamics of political globalisation’ , Governmentand Opposition,32(2),1997, pp 251 – 274;J HMittelman& RJohnston,‘ Theglobalization of organized crime, thecourtesan state, andthe corruption of civil society’ , GlobalGovernance ,5,1999, pp 103 –126; and L Panitch,‘ Rethinkingthe role of the state’ , inJ HMittelman(ed), Globalization:Critical Re ections , Boulder,CO: Lynne Rienner, 1996, pp 83 – 113.See alsoP Hirst >hompson, Globalizationin Question: TheInternational Economy and the Possibilities of Governance ,New York:Polity Press, 1996;and W C Opello& SJRosow, TheNation-State and Global Order. AHistoricalIntroduction to Contemporary Politics,Boulder,CO: LynneRienner, 1999. 3 S Strange, TheRetreat of the State: The Diffusion of Power in theWorld Economy ,Cambridge:Cambridge UniversityPress, 1996.See alsoJ AScholte,‘ Globalcapitalism andthe state’ , InternationalAffairs , 73(3), 1997, pp 427– 452;J MacMillan& ALinklater(eds), Boundariesin Question: New Directionsin InternationalRelations ,London:Pinter, 1995; and D Held& AMcGrew, ‘Globalisationand the liberal democratic state’, inY Sakamoto(ed), GlobalTransformation: Challenges to the State System , Tokyo: UnitedNations University Press, 1994,pp 57 –84. 4 WIRobinson,‘ Capitalistglobalization and the transnationalization of the state’ , paperpresented at the AnnualMeeting of the International Studies Association, Los Angeles, CA, 14 – 18March 2000, p 6. 5 World Bank, TheState in a ChangingWorld ,Washington,DC: World Bank, 1997, p 25. 6 R Dahl, Polyarchy,Participation, and Opposition ,New Haven,CT: Yale UniversityPress, 1971. 7 Foran analysis and critique of the causes underlyingthe shift in US policyfrom supporting authoritarian states tothat of democracy movementsin civil society, see WIRobinson, PromotingPolyarchy: Globaliza- tion,US Intervention,and Hegemony ,New York:Cambridge University Press, 1996. 8 Foran instrumentalist approach, see RMiliband, TheState in CapitalistSociety: An Analysis of the Western System ofPower ,New York,Basic Books,1969, and for a structuralistapproach, see NPoulantzas, Political Powerand Social Classes ,London,New Left Books,1973. 9 R W Cox, Production,Power and World Orders: SocialForces inthe Making of History , New York: ColumbiaUniversity Press, 1987. 10 A Gramsci, Selectionsfrom the Prison Notebooks ,transand ed, with an Introduction, by Q Hoare &GN Smith,New York:Lawrence &Wishart,1971, p 246,emphasis added. 11 Ibid,p268,emphasis added. 12 CBNChin& JHMittelman,‘ Conceptualisingresistance toglobalisation’ , New PoliticalEconomy , 2(1), 1997, p 27. 13 CERAbraham, Divide andRule: The Roots of Race Relationsin Malaysia ,Kuala Lumpur: INSAN, 1997. 14 D Nonini, BritishColonial Rule and the Resistance of the Malay Peasantry, 1900 – 1957,MonographSeries no38, Yale UniversitySoutheast Asia Studies,Yale Center forInternational and Area Studies,1992. 15 RStevenson, Cultivatorsand Administrators: British Educational Policy Towards the Malays, 1875 – 1906, Kuala Lumpur:Oxford University Press, 1975. 16 SyedHussein Alatas, TheMyth of the Lazy Native: A Studyof the Image of the Malays, Filipinos and 1055 CHRISTINE BNCHIN

Javanese fromthe 16th to the 20th Century and its Function in the Ideology of Colonial Capitalism , London: FrankCass, 1977;and V Purcell, TheChinese in Malaya ,Oxford:Oxford University Press, 1967. 17 Lai Ah Eng, Peasants,Proletarians and Prostitutes: A PreliminaryInvestigation into the Work of Chinese Womenin Colonial Malaya ,Research Notes andDiscussion Papers No59, Singapore: Institute for Southeast Asian Studies,1986. 18 P Ramasamy, PlantationLabour, Unions, Capital and the State in Peninsular Malaysia ,Kuala Lumpur: OxfordUniversity Press, 1994. 19 KSJomo& PTodd, TradeUnions and the State in Peninsular Malaysia ,Kuala Lumpur:Oxford University Press, 1994. 20 JSFurnivall, ColonialPolicy and Practice ,Cambridge:Cambridge University Press, 1948. 21 RSMilne& DKMauzy, Politicsand Government in Malaysia ,Singapore:Federal Publishers,1978. 22 Saw Swee Hock, ThePopulation of Peninsular Malaysia ,Singapore:Singapore University Press, 1988,p 65. 23 Fora detaileddiscussion on thegrowth of Chinese Ž rms, see JJedudason, Ethnicityand the Economy: The State,Chinese Business, and Multinationals in Malaysia ,Singapore:Oxford University Press, 1989. 24 As citedin A Ong, Spiritsof Resistance and Capitalist Discipline: Factory Women in Malaysia , Albany, NY: State Universityof New York,1987, p 152. 25 Chee HengLeng, ‘ Babies toorder: ofŽ cial populationpolicies in Malaysia andSingapore’ , inB Agarwal (ed), Structuresof Patriarchy: The State, The Community and The Household ,London:Zed Books, 1988; AOng,‘ State versusIslam: Malayfamilies, women’s bodies,and the body politics in Malaysia’, American Ethnologist ,17(2),1990, pp 258 – 276;and J Nagata, TheRe owering of Malaysian Islam: Modern Religious Radicalsand Their Roots ,Vancouver:University of British Columbia Press, 1984. 26 Chee,‘ Babies toorder’ , p167. 27 K Polanyi, TheGreat Transformation:The Political and Economic Origins of Our Time ,Boston,MA: Beacon Press, 1944. 28 G P Means, MalaysianPolitics: The Second Generation ,Singapore:Oxford University Press, 1991. 29 Committee AgainstRepression in the PaciŽ c andAsia ( CARPA), TangledWeb: Dissent, Deterrence andthe 27October 1987 Crackdown in Malaysia ,Kuala Lumpur: CARPA, 1988. 30 Thestate beganto implement economic privatization, liberalization and to a lesser extent,deregulation policiesduring the mid to late 1980s.For a gooddiscussion of these policies(including detailed analysis ofthe beneŽ ciaries), see ETGomez &KSJomo, Malaysia’s PoliticalEconomy: Politics, Patronage and ProŽ ts,Cambridge:Cambridge University Press, 1997. 31 Jomo & Todd, TradeUnions , pp 29–30. 32 Fordetailed economic data, see Governmentof Malaysia, SecondOutline Perspective Plan1991 – 2000, Kuala Lumpur:National Printing Department, 1991. 33 Gomez &Jomo, Malaysia’s PoliticalEconomy , p 173. 34 MahathirMohamad, ‘ Malaysia:the way forward’, inAhmad Sarji Abdul Hamid (ed), Malaysia’s Vision 2020:Understanding the Concept, Implications and Challenges ,PetalingJaya: PelandukPublications, 1993, p 404. 35 James Parsonageargues that the phenomenon of subregional growth zones in Southeast Asia shouldnot be read as beingsolely market-driven, but that they are theproduct of state interventionto create theconditions fornew forms ofsubregional manufacturing and Ž nancialnetworks. See ‘Trans-state developmentsin South-EastAsia: subregionalgrowth zones’ in G Rodan,K Hewison& RRobison(eds), PoliticalEconomy ofSoutheast Asia ,Oxford:Oxford University Press, 1997,pp 248 – 283. 36 PPillai,‘ Theimpact ofthe economic crisis onmigrantlabor in Malaysia: policy implications’ Asia PaciŽ c MigrationJournal , 7(2–3),1998, pp 255 – 280. 37 CBNChin,‘ Walls ofsilence andlate twentiethcentury representations of the foreign female domestic worker:the case ofFilipina and Indonesian female servantsin Malaysia’ , InternationalMigration Review , 31(2),1997, pp 353 –385;I Fernandez,‘ Migrantworkers and employers in Malaysia’ , AsianMigrant , 10(3), 1997, pp 94–97;and Azizah Kassim, ‘Recruitmentand employment of foreign workers in Malaysia’ , in RokiahTalib & TanChee Beng(eds), Dimensionsof Tradition and Development in Malaysia ,PetalingJaya: PelandukPublications, 1995, pp 163 – 202. 38 MPinches(ed), Cultureand Privilege inCapitalist Asia ,London:Routledge, 1999. 39 Mahathir,‘ Malaysia’, p404. 40 Fora comprehensivediscussion of Vision 2020 by politicians and corporate executives, see Ahmad, Malaysia’s Vision2020 . 41 See Gomez &Jomo, Malaysia’s PoliticalEconomy . 42 The Star,1October1996; 24 May 1997. 43 BeritaHarian ,18May 1996; The Star,15March 1996; 26 May 1996; and The Sun,8April1996. 44 The Sun,23May 1996; and New StraitsTimes ,7April1996. 45 The Sun,28June 1996. 46 The Star,8June1996; 30 June 1996. 47 S Strange, CasinoCapitalism, Oxford:Blackwell, 1986. 1056 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA

48 See, forexample, K SJomo(ed), Tigersin Trouble: Financial Governance, Liberalisation and Crises in East Asia,London:Zed, 1998; R HMacleod& RGarnaut, EastAsia in Crisis: FromBeing a Miracleto Needing One?London:Routledge, 1998; and R Wade,‘ Asian debtand development crisis of1997 –?’, WorldDevelopment ,26(8),1998, pp 1535 – 1553. 49 At theNovember 1998 APEC meetingheld in Kuala Lumpur,comments bythe US Vice PresidentAlbert Gore Jr insupport of former DeputyPrime MinisterAnwar Ibrahim’s ‘reformasi’movement, and later, globalhedge-fund manager GeorgeSoros’ s suggestionthat Malaysians ought to topple their leader, only strengthenedthe prime minister’s allegationsof foreign saboteurs’ intent on destabilizing the economy and country. 50 The Star,31March 1998. 51 Ibid. 52 TheMinister of Transportation’ s comments thatencouraged women to save forthe country were revealing ofthe continued perception of women’ s workas locatednaturally and primarily in the private – domestic sphereof the household. He said,‘ [Womenare] theministers ofŽ nance,tourism, home affairs, education andconsumer affairs ina householdbecause theyare theones who decide on daily matters …Menare consideredforeign affairs ministers as theyare notin the house most of the time anddo not decide much onhousehold matters.’ The Star,9Feburary1998. 53 Ibid,10March 1998. 54 The Sun,13January 1998. 55 The Star,26February 1998. 56 Asiaweek,3July1998. 57 Reuters,19 May 1999. 58 AsianWall Street Journal ,30March 1999. 59 FarEastern Economic Review ,12November 1998. 60 FarEastern Economic Review ,3December, 1998,and Asiaweek,30October 1998. 61 Bernama,13May 1999. 62 Asiaweek,16April 1999.

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