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By  Murray Hunter

http://www.orbus.be/info/important_news_june_extra_005_2013.htm

 

Kudos Mr. Hunter … spot on  . . .

As urban Malaysia has grown and prospered, the rural hinterlands have generally declined. Back in the 1980s approximately 70% of Malaysia’s land was considered rural, where today 72% of Malaysia is urbanized with a growth rate of 2.4%. With this, the rural-urban divide within Malaysia has been growing, where substantially very little is being done to directly alleviate the problem.

Rural sector development has not been debated very much over the last few decades, even though the primary sector still represents almost 12% of GDP and employs more than 11% of the population. There are many rural issues that affect the future of Malaysia in much greater magnitude than the rural contribution to GDP and employment. The sustainability of Malaysia as an eco(n)-system, the country’s cultural basis, and even political destiny is tied up with rural evolution. But the current “health” of rural Malaysia leaves a lot to be desired.

Forest cover in Malaysia is decreasing on a daily basis. Conservation has lost out to greed and development. Palm oil, rubber plantations, and urban expansion are eating into the forests, with very poor land enforcement on the ground. Well connected businesses are able to get concessions that are extremely financially lucrative, at great environmental cost. Roads and new townships have divided rural habitats, playing havoc with biodiversity.  These man-made barriers hold flood waters inland during the monsoons, preventing dispersion of water to the sea, causing flooding. Many animal species are in danger of extinction through poaching in the quest to supply the lucrative Chinese medicinal market.

Author: Murray Hunter
Murray Hunter

Murray Hunter has been involved in Asia-Pacific business for the last 30 years as an entrepreneur, consultant, academic, and researcher. As an entrepreneur he was involved in numerous start-ups, developing a lot of patented technology, where one of his enterprises was listed in 1992 as the 5th fastest going company on the BRW/Price Waterhouse Fast100 list in Australia.

Murray is now an associate professor at the University Malaysia Perlis, spending a lot of time consulting to Asian governments on community development and village biotechnology, both at the strategic level and “on the ground”. He is also a visiting professor at a number of universities and regular speaker at conferences and workshops in the region.

Murray is the author of a number of books, numerous research and conceptual papers in referred journals, and commentator on the issues of entrepreneurship, development, and politics in a number of magazines and online news sites around the world. Murray takes a trans-disciplinary view of issues and events, trying to relate this to the enrichment and empowerment of people in the region.

Increasing population and new townships are putting pressure on rivers and waterways through increased domestic sewage, the dumping of garbage, and processing waste from livestock and other agro-based industries. Quarrying has silted many rivers. Soil erosion is depleting soil fertility quicker than it can be regenerated. Burning off around the region is producing thick unhealthy smog, which is affecting the whole country.

Yet with all this development there are still distinct infrastructure deficits in Malaysia. Most of the rural areas within Sabah and Sarawak are remote, where transport is costly. Some regions in Terengganu and Kelantan are still relatively isolated with very few perceived economic opportunities, as is with Perlis and parts of Kedah. The cost of goods in these areas are more expensive than the major cities. Sabah and Sarawak are legally deprived of the ability to ship goods by sea directly to other countries, as they must be trans-shipped through the Peninsula, thus handicapping the development of new export industries.

Even with rising urban populations within Malaysia, food production is not keeping pace with this growth. Malaysia is a net importer of food and animal feed, and the relatively high prices industrial crops like oil palm verses food crops deters food crop expansion. As Jared Diamond professed in his seminal book Collapse, a country which fails to provide for self sufficiency in food production and animal feed is destined to doom just like the Mayan civilization of a long gone era.

There is a general lack of research and development in new crops and the effects of climate change on existing crops. Crop research is undertaken on a national rather than regional level, where there is little support for developing new industries in specific areas. Currently most agricultural research is undertaken centrally by the Malaysian Agricultural Research and Development Institute (MARDI), which follows a national research agenda formulated by policy rather than market considerations.

High urban wages have created a labor shortage in rural areas, and the rising cost of petroleum inputs is increasing the cost of production making food production uncompetitive.

Rural development has been undertaken with little appreciation of ecosystems within the concept of sustainability. The current method of identifying development projects at a district or state level within the bureaucracy and then Federally funding it is skewed towards meeting personal interests of vested parties. Real community consultation is not sort, where new projects generally lack any sense of community ownership and pride, often becoming ‘white elephants’ and abandoned. Many of the drivers of economic growth have been public sector orientated and consequently unsustainable projects, in most cases at the expense of the environment.

Rural Malaysians have been introduced to debt through loans and credit cards as a means to acquire goods and services to increase their standard of living, creating a debt trap. This burden is partly to blame for the lack of micro-SME development, due to the inability to pursue opportunities because of the lack of capital.

Sabah's jobless grads to get land to farmThis is the biggest crisis, the crisis of opportunity. The incidence of entrepreneurial opportunity  in rural areas is low, particularly for the youth, who are migrating to the cities.

Consumer desire has replaced cultural continuity, where much of rural society’s traditions and knowledge are being lost. Locally grown food is being replaced with processed food, fruits and vegetables are full of pesticides, family built houses are being replaced with mortgages, fast food has replaced ulam (native herbs), where bank loans have replaced self reliance.

The development of rich local farming and craft skills are not being renewed and developed through the existing  education system so these can be utilized and exploited for creating a sustainable living in the community.  This is dispossessing communities of their cultural wealth.

To remedy this requires a complete paradigm shift in development philosophy, moving the focus away from infrastructure towards enhancing the elements of local economies at a micro-level. This is potentially very difficult as Malaysian technocrats in Putrajaya are governed by the narrative of technology ‘thrusts’ and setting tangible ‘KPIs’ in development planning.

As a commentator it is easy to criticize, especially when a writer provides no meaningful solutions. So the rest of this article will focus on providing one paradigm as a solution (no doubt other paradigms exist) to Malaysia’s rural development quandary.

The precise needs of rural societies is best obtained from inside those communities. A ‘bottom up’ problem identification process will ensure development objectives and implementation scenarios will remain relevant to those targeted communities. Community shura (consultation) committees can be set up at village level to identify and discuss needs, problems, and desired solutions, and advise village heads.  Such a democratic approach to community will provide policy makers with the guidance they need in setting objectives and programs, and assist in minimizing funding leakages during implementation.  This measure alone would signal a very strong redistribution of policy decision making to the communities themselves, thus empowering communities to have more say in deciding their own future destinies. The shura system should develop new leaders and ‘champions’ who are willing to lead and help shape a new community sense of wisdom. Policies will never succeed without people to drive them.

Self sufficiency and a vibrant local trade economy is the key to future rural communities. However, rural SMEs  should be facilitated to enter national and international markets. There are now many compliance procedures such as Good Agricultural Practice (GAP), necessary for agricultural produce to enter international supply chains. These practices need to be introduced within rural communities so products produced are accepted in international markets. These compliance processes can be locally enhanced to include Halal certification, thus widening the compliance process to one inclusive certification, which for want of a better name could be called HalalGAP. A HalalGAP certification could greatly enhance the desirability of Malaysian produce, especially within the exponentially growing Halal markets worldwide.

Whole sectors like rice paddy production need to be reconfigured from the ‘bottom up’ so they can become competitive. The paddy production process in Malaysia requires the hands of a number of contractors during the field preparation, planting, cultivation, harvesting, and processing stages. Paddy production is an uncompetitive sector. Proposed solutions from the Northern Corridor Economic Region Authority (NCER) to develop mini-rice paddy estates with land leased from smallholders and employing these same smallholders as laborers is culturally unsound and almost certain to fail.

New methods like System of Rice Intensification (SRI) could be adopted, and more popular aromatic varieties of rice cultivated to increase industry viability. The rice monopoly held by BERNAS could be ended to allow new approaches to rice products and marketing by entrepreneurial individuals. Such an approach could drastically decrease production costs and add value to rice products in the marketplace, redistributing this added value back to farmers.

University and institutional research should change focus towards communities rather than using scare research funds to chase medals at exhibitions that have no research or commercial significance in places like Geneva and Seoul. The technology developed by Malaysian institutions should be simple, applicable to community enterprise, and appropriate to the size of the enterprises operating in rural areas. This appropriate technology, if effective and viable is itself a source of competitive advantage that will enable rural enterprises to compete in the marketplace.

This is a major challenge to Malaysian researchers to come out from their academic institutions and into the community with solutions that can enrich society. If state awards with titles were recommended for those who developed technology benefiting the community, one would be sure there would be great focus and resources allocated towards solving rural problems by academic researchers.

Locally relevant new crops research programs should be undertaken to identify locally viable new crops, which are developed as close as possible to the communities it is intended to benefit, with the community’s input and cooperation through Participatory Action Research (PAR), rather than centralizing research under a national agenda. New crops research should adopt an ‘farm to folk’ research and development approach, including the development of knowhow for processing new downstream products.

This requires support through developing new supply/value chains that will carry new micro-enterprises to new markets, with new products. The Federal Agricultural Marketing Authority (FAMA) has a superb distribution infrastructure that can be utilized to do this. Primary and processed food products can be supplemented with handicrafts, traditional Malay wedding items, batik, leather goods, pewter, and Malay fashion products to develop a national range of indigenous products that can be marketed through franchised retail outlets. These products could be the result of a host of new rural activities that are developed at micro-SME level.  If Fairtrade shops in Europe and OTOP shops in Thailand are any indication of the viability of this proposition, these shops will be extremely profitable.

The nature of entrepreneurship education also needs reconsideration. Currently universities are playing a primary role in training entrepreneurs, but current courses tend to be academically full of theory, teaching more about entrepreneurship, rather than how people can become entrepreneurs. Entrepreneurship is more about creativity, than intelligence. Yet universities focus on measuring intelligence  through assignment and exam, rather than project formats. Entrepreneurship education should be technically based and taught with a ‘hands on’ approach, rather than the stiff classroom theory approach.  Entrepreneurship education needs to be refocused towards vocational and community education mediums to reach those in rural communities who need assistance through this form of education.

An entrepreneurial community requires finance which the established banks are hesitant to provide, even with the Government sponsored credit guarantee program under the Credit Guarantee Corporation (CGC). Rural community savings cooperatives can be developed as savings and micro-lending institutions, owned by the community, run for the community, by the community itself. These savings cooperatives can operate according to Islamic finance procedures where venture risk is shared by both the entrepreneur and institution, and as supplementary activities, run special education, Haj and Umrah funds for community members.

These measures would create a new community enrichment rather than a ‘KPI’ orientated development paradigm. All of these measures individually exist and operate successfully in other member ASEAN states today.

New crop research is very much needed to ensure communities are able to successfully adapt to a changing environment  due to climate change. Over the next few years, some crops may provide better yields, while others will drastically decline in their productive capabilities. In addition food production for increasing urban populations and restoring water quality will become very critical issues. There must be a renewed interest in sustainability on the part of both policy makers and communities, as Malaysia’s sustainability is tied up with rural evolution. New forms of community education are needed outside of the traditional education system to deliver community needed skills. The failure to achieve this will result in continued population depletion as the youth abandon rural areas for the cities.

For over five years there has been talk about the need of change. This has usually been expressed in political terms at the cost of looking at the cultural, economic, and spiritual development. Current development paradigms have eroded traditional Malaysian society values to the point where it is just a national memory and a long gone narrative. This old narratives once housed Malaysia’s sense of unity in being collectively proud as a nation, where the rituals of ‘balik kampong’ (returning home) during festivals, smelling the scent of durian during season, rendang during festivals, fishing in the longkang (irrigation drains), and flying kites over paddy fields. These activities once signified what was most valued by communities.

Here lies the opportunity to enrich rural society along the vibrant cultural traditions that the country once thrived upon; building self sufficient and sustaining communities. These communities will be much better immune to economic downturns. Communities based upon indigenous knowledge and skills will develop much greater cultural pride which has become exhausted through Malaysia’s occidental industrial growth paradigm.

This is the fundamental issue at stake for Malaysians to decide whether the same country will spiritually exist in the future, or be gone and replaced with something else. The rural communities are the last custodians of Malaysia’s culture and this is where efforts must be made to preserve the spirit of Malaysia, if it is to survive.

The role of government linked corporations (GLCs) in Malaysia’s corridor development projects has not necessarily taken into account the best interests of the communities they have sort to ‘develop’. The ‘collateral damage’ of this ‘development’ may be too much to bare. If rural development serves vested interests, it will surely be piece meal, unbalanced and ultimately destructive. Future development must enrich rather than destroy culture with blind materialism produced through current paradigms. This requires a rethink on rural development in Malaysia before what once mattered to Malaysians is destroyed forever.