“What Raiding the Rich Did For Malaysia” (Asianometry, 29 August 2022)
A daring stockmarket raid hatched by politicians and bankers in Malaysia on the shares of the then British Guthrie Group Limited corporation on the London Stock Exchange in September 1981 is the launchpad into a lesson on how newly independent nations with economies still dominated by colonial structures and corporations based in the coloniser homeland can reclaim their land and resources. Prior to independence, Malaysia was a group of separate colonies ruled by the British. The economy of these colonies revolved around plantation agriculture producing rubber, tea and other products, often in an unrefined form, for export. The plantations were owned and run by large British companies like Guthrie Group Limited. Plantation workers were usually labourers brought in from other British colonies (primarily southern India) who worked for low wages in often arduous conditions. Chinese workers were employed in tin mines and small business was dominated by Chinese entrepreneurs. The native Malays worked as farmers.
On achieving independence in 1963 after years of resistance against British rule that often erupted in violence and British repression, Malaysia faced many problems, not the least of which was that the Chinese dominated many businesses and through that domination were becoming politically powerful. The Indians and Malays were at a distinct economic disadvantage for reasons particular to them. The majority of Malaysian corporate assets still belonged to British corporations. For this reason, in the 1970s Malaysia began a controversial policy in which indigenous Malays would receive economic and educational advantages over the Chinese to elevate their socioeconomic status and create racial equality among the Chinese, Malays, Indians and other groups. Specific goals such as Malays having 70% ownership of the country’s economic assets by 1990 were set. Financial institutions and equity funds were tasked with meeting racial equity goals through various legislative acts and financial actions.
With the historical context having been explained in some detail, the video’s focus narrows onto Guthrie Group Limited which struggled to comply with changing Malaysian rules and impositions while keeping its Malaysian assets in London. A restructure of the corporation’s management and share ownership arrangements failed to satisfy the Malaysian government and its directives. After an internal shake-up of its management and finances sparked by a financial scandal, rival company Sime Darby launched an attempted takeover of the Guthrie Group. In the 1980s, with the arrival of a new generation of politicians led by Mohammed Mahathir in Kuala Lumpur, the Malaysian government was increasingly shut out of Guthrie Group Limited’s affairs. An equity fund owned by KL bought groups of shares from various shareholders in the company and in September 1981 the Malaysian government announced it had bought enough shares in the company to assume majority control. This had all been done legally and since Malaysia had paid for the shares, the British could not accuse Malaysia of stealing assets that rightfully belonged to Malaysia originally. Hundreds of thousands of hectares of land were transferred from the British to Malaysia overnight.
The raid on Guthrie brought hopes to the company’s Indian employees of a lift in their wages and better working conditions but unfortunately the benefits that accrued to KL from the takeover did not percolate down to the plantation workers.
As expected of Asianometry’s mini documentaries, this video goes into much detail and depth following Malaysia’s economic evolution. The context for the country’s controversial policy favouring Malays and indigenous groups, at the expense of the Chinese and the Indian communities, is clear. At the same time the video is weak on explaining how and why the Malaysian government decided not to try nationalising major and essential industries, in contrast to its neighbours in Thailand, Burma (Myanmar) and Indonesia. The British decision to bring Chinese and Indian labour to Malaysia in colonial times is not adequately explained, and how the British benefited from the economic disparities (and the resulting resentments and rivalries) among the three main ethnic groups in Malaysia is quickly glossed over. The video ends abruptly on a depressing note with its quick survey of how Malaysian Indian plantation workers have not fared so well from Malaysia’s economic policies that purported to strive for racial economic equity.