Wednesday, April 7, 2010

Trip to Malaysia

My wife and I took a trip to Malaysia in the last weekend. We decided to go the old trading center in the west coast of Malay Peninsula, the State and City of Melaka . The city has a history of being ruled by Hindu kings, Muslim Sultanate, the Dutch, the Portuguese, and may be the  British. The trip was about five hours ride in the bus from Singapore . It was nice and comfortable drive. Apart from the sight-seeing, food, and culture, I made some observations regarding my favorite topic, Economics. Throughout the drive, Malaysia looked very green, landscaped and clean. There is a conscious effort to maintain greenery in the non-urban areas and these efforts are boosted by the Palm tree crops in most of the places. (I hope that this cash crop does its fair share to decrease Carbon Dioxide from the environment).

My impressions about cleanliness and hygiene in Malaysia were reinforced in the city as well. Malaysia is sparsely populated about 80 people/sq km compared with nearly 400 in India and 60,000 in Singapore . Melaka was as clean and well maintained as Singapore . I observed that people maintained a distinct civic sense and garbage was not scattered (even though I did not see many trash cans everywhere). Infrastructure in Malaysia left a positive impression in my mind. The roads were better than that of the US . Highways had a posted speed limit of 110 km/hr and cars were doing way more than that. I can imagine the efficiency that it creates for Malaysian economy. In India , such a system will unlock more efficiency and GDP growth. Another striking feature of infrastructure was the uninterrupted supply of electricity. I saw grids and electrical connection everywhere (even in rural landscape), a view that is a rarity in India , which is still struggling to provide basic infrastructure to 50% of its population.

I also experienced certain disappointments. It is bad to generalize, especially on the basis of limited experience. But, I am notorious for making misjudgments and forming biased opinions. I found the population in Malaysia lacked the entrepreneurial energy and drive that is visible in other countries in Asia such as Thailand , India , China , Indonesia , and Singapore . Some displayed a sense of lethargy and indifference towards their jobs and services they provide. Another aspect which was quite vivid was the amount of businesses owned by the Chinese ethnicity Malaysians in China. Many learned economists claim that nations become prosperous not because of the natural resources, but due to a usually neglected resource: its citizens. Therefore, a nation that develops its human resource and invests in its training and education wins the race out of poverty and ignorance.

Anyway back to Malaysia. Overall, I was impressed with the physical infrastructure in Malaysia and the opulence of the general population. My investigations further confirmed that the heavy investments in the infrastructure happened in the early to mid 90s (just before the Asian Financial Crisis). While, Malaysia suffered during the crisis, it can take some comfort from the fact that at least investments in the infrastructure have been a positive outcome of the wild ride.

The failure of the Government of India to develop  robust infrastructure in the last 60 years has hindered the economic growth of the country. Rural areas are still disconnected from the trade centers. The fast track displacement of the population to the urban areas, which are already overburdened, is a disaster waiting to happen.

It is sometimes very disheartening to realize that the poorest nation I have ever been to is my own country! I hope that situation improves in future with more responsible and honest political leaders taking the reigns from the bureaucratic Congress Party.

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