The Japan That Dr. Mahathir Abandoned (?!)

The Japan That Dr. Mahathir Abandoned (?!)

INAMURA Kobo, Visiting Professor, Graduate School, Chuo University

(This is an excerpt from the April 2013 issue of Gekkan Nippon magazine.)

Japan, once the up-and-coming star for the countries of Asia

NIPPON: As someone who has struggled against neoliberalism, why is it that you have long taken note of the things that former Malaysian Prime Minister Dr. Mahathir has to say?

INAMURA: It’s because Dr. Mahathir’s words have included a strong message that can make we Japanese remember something important that we ourselves have forgotten.

Japanese society westernized after the war, and neoliberalism took hold with the end of the Cold War. As a result, the culture and civilization that the Japanese people themselves developed, along with the shape of the country supported by them, has been disappearing. Dr. Mahathir constantly offered words of encouragement: “Japanese, take pride in Japan’s traditional values!” “Use the power of Japanese civilization to develop the world!”

If I could speak without fear of being misunderstood, I would say that at one time Japan was like the big brother on which Malaysia could depend. In their younger days, it was a splendid older brother, and the younger brother learned many things. Once the older brother got his own household, however, he strayed from the path. His family didn’t have the power to stop it. The younger brother frantically cried out, “Brother, open your eyes!” The older brother should have quickly taken note of his younger brother’s strenuous cries.

NIPPON: What kind of existence did Japan have for Dr. Mahathir?

INAMURA: Malay was a British colony, and all of its systems were remade to fit British styles. Japan in contrast had pulled off the Meiji Restoration and maintained its independence as Asia’s only modern nation.

Japan’s victory in the Russo-Japanese War in particular had the greatest impact. This gave pride and hope to all Asians, who had a sense of inferiority and of fear. Not only for Dr. Mahathir but among Asian intellectuals who are familiar with history, the Russo-Japanese War is remembered as a watershed event in the history of Western hegemony. An Indian author, Mr. Pankaj Mishra, recently had a best-seller titled From the Ruins of Empire in which he wrote about the effects that the Russo-Japanese War had on India, China, and the Ottoman Turks.

The next turning point came in December 1941. Dr. Mahathir was 15 years old at the time. He spent his younger years in the state of Kedah along the Thai border. Following the opening of hostilities with the U.S. and Great Britain on the 8th of that month, the Japanese army tried to land on the Malay Peninsula. The British army set up a line of defense in Jitra along the same border, boasting that they could stop the Japanese advance in three months. However, the Japanese army broke through at Jitra just four days after it attacked, and the British fled to Dr. Mahathir’s hometown of Alor Setar. Singapore fell the next year on February 15. Dr. Mahathir later wrote, “The British were defeated by their belief that they had no enemies.”

NIPPON: Japan eventually lost the Great East Asia War, but Asia gradually won its independence. Malaysia achieved its own in 1957, becoming the Federation of Malaya.

INAMURA: The Federation was established when Dr. Mahathir was 31 years old. Dr. Mahathir made his first visit to Japan four years later in 1961. He saw up close a country that had miraculously recovered from defeat and was excited by the preparations for the Tokyo Olympics. Reflecting on that time, he later said the following:

“The Japanese had faith. They concentrated on their work, and they were courteous. When two cars collide, both drivers get out, bow to one another, and deal with matters quickly.”

Dr. Mahathir had been working as a physician, but in 1964 he was elected to the lower house of parliament and began his political career. He was an opponent of then-prime minister Rahman, however, and was thrown out of the ruling United Malays National Organisation [UMNO]. During his dark days, Dr. Mahathir got the opportunity to see Japanese management methods with his own eyes in 1973 as the chairman of Food Industries of Malaysia.

NIPPON: It was a formative experience that led to the adoption of his “Look East” policy.

INAMURA: Dr. Mahathir adopted that policy soon after he took office in July 1981 as Malaysia’s fourth prime minister and the first commoner to hold that office. The policy’s focus was for the Malay people to learn the Japanese and Korean work ethics, employment practices, management techniques, and ways of managing the economy through cooperation of the government and the people. He also thought there was a need to support the superior aspects of groupism and communitarianism vis-à-vis individualism.

NIPPON: It wound up producing a radical change to Malaysian policies of state, which had been modeled in all respects on British style.

INAMURA: Dr. Mahathir commanded people to “study Japan.” He also said that the special relationship between Malaysia and Britain that had existed before would no longer continue, and boycotted the Commonwealth Heads of Government Meeting in September 1981 with the argument that he had no time to spare for a meeting of little benefit.

He also did away with various British customs. There had been a custom in Malaysian government offices for workers to take breaks in the morning and afternoon in the name of “tea time,” but Dr. Mahathir did away with it. For him, British culture at the time was the symbol of a degenerate spirit. In his 1970 work The Malay Dilemma, he spoke critically of the West. He argued that the signs of decline in European civilization were clear. Its sense of morality had fallen, its ethical stance had also decayed, and this was only causing real harm to society.

There is a path to development other than that of the West

NIPPON: However, the Japan that had been a model for Dr. Mahathir abandoned its own methods and traditions.

INAMURA: There were trade frictions between Japan and the U.S. even in the 1980s, but Japan had maintained its own approach to economic management. However, criticism of Japanese regulations and systems heated up after 1989 when the Cold War came to an end. For example, in his May 1989 article, “Containing Japan,” Mr. James Fallows wrote, “[T]he honor and discipline of Japanese life are based on highly personal loyalties—to the feudal lord, to the honor of the family, these days to the corporation. These are different from such abstract principles as charity, democracy, world brotherhood, and so on, and they lead to different kinds of behavior.” He called on Japan to change all of its culture, ethical values, and customs.

The Japan-U.S. Structural Impediments Initiative began during this time exactly as an attempt to put Japan’s systems under strong American influence. They eventually continued as the Japan-U.S. Framework Talks on Bilateral Trade, and then the U.S.-Japan Regulatory Reform and Competition Policy Initiative. These schemes to destroy Japan’s systems in the name of structural reform suddenly accelerated during the Koizumi administration. And now an ambitious conspiracy to destroy Japan’s systems is again moving ahead with the Trans-Pacific Partnership.

NIPPON: Dr. Mahathir’s sense of disappointment about Japan would appear to be very serious.

INAMURA: Japan became more subordinate to the U.S. It abandoned its own approach to managing the country and worshipped that of the West. Dr. Mahathir, however, loudly called for an independent path to development different from that of the West. In 1991 he came out with his Vision 2020 statement, which set the objective of establishing a fully moral and ethical society, whose citizens are strong in religious and spiritual values and imbued with the highest of ethical standards.”

This was the opposite of the state that neoliberals would expect. For that reason, Dr. Mahathir had to continue his proudly independent fight.

He proclaimed in 1990 his concept for an East Asia Economic Group [EAEG). The primary objective was for East Asia to stand united in riding out trade negotiations with advanced countries. However, it may also have had the aim of deepening ties between the countries of East Asia with their shared values, and trying to overturn the Western-led economic order. The idea was to create a model for economic integration that is imbued with the principles of equality, mutual respect, and mutual benefit rather than an order that imposes free competition where the strongest will score lopsided victories.

The dangers of the TPP bringing about an era where the privileges of major companies are protected over the sovereignty of states are being highlighted now, but Dr. Mahathir truly inferred very early on the dangers of global domination by major Western corporations. At a seminar that took place in Tokyo in June 1998, he said, “Clearly, there is a possibility that a few enormous corporations will rule the world. Major companies and banks will continue to grow even larger through mergers and acquisitions, perhaps to prepare for that.”

NIPPON: Dr. Mahathir more than once called for Japan to lead the EAEG, but Japan sought only to avoid displeasing the U.S. and disappointed him.

INAMURA: Meetings that would have been under the EAEG framework eventually took shape as the ASEAN Plus 3 talks that brought in Japan, China, and Korea, but Japan did not take the lead. As a result, not only Malaysia but the ASEAN countries as well ended up choosing a path that angled them toward China.

Note well the possibilities of an Islamic economy

INAMURA: At the time of the Asian currency crisis of 1997, Dr. Mahathir refused to implement the neoliberal economic policies encouraged by the International Monetary Fund and enforced currency trading regulations to protect the Malaysian ringgit. Furthermore, he openly criticized currency speculators like Mr. George Soros. Malaysia suffered backlash from Western speculators as a result, and the ringgit and Malaysian stocks were sold at bargain prices. Even so, Malaysia did not bend.

NIPPON: Unfortunately, in the face of Dr. Mahathir carrying out his proudly independent fight, rather than support him Japan’s newspapers were bluntly critical of Dr. Mahathir. For example, Mr. Hayashida Hiroaki of the Yomiuri Shimbun wrote on September 5, 1997, “Malaysia is in danger of being isolated diplomatically and economically. The stock market regulations whose intent is to bar Western speculators are having a backlash, and there is no braking the slide of stock prices.”

INAMURA: At the 1998 Asia-Pacific Economic Cooperation conclave, disregarding where he was, then-U.S. Vice-President Al Gore delivered an anti-Mahathir speech, and a section of Japan’s mass media became such dupes of the U.S. that they followed the same train of thought.

The reason why Dr. Mahathir has maintained his sharply critical view of Western modernity is because he adheres to Islamic values. Dr. Mahathir promoted a “Look West” policy at the same time as his “Look East” stance. The “West” here was Islam.

Royal Professor Ungku Aziz, who served as vice-chancellor of the University of Malaya, once said of Dr. Mahathir’s objectives that he incorporated the good things from Japan and combined them with the spirit of Islam.

In January 1982, not long after he took office, Dr. Mahathir proposed his concept for founding the International Islamic University of Malaysia. He also called for the introduction of a financial system that was in accordance with Islamic teachings. Islamic teachings reject unearned income, including interest earnings. They include the extremely important ways of thinking that help in compensating for the abuses of Western-style financial systems.

Since the adoption by Dr. Mahathir of policies to promote Islamic finance, Malaysia developed Islamic banks as well as an Islamic bond called the sukuk. Today, Malaysia accounts for 65% of the global market in sukuk.

NIPPON: Dr. Mahathir has been working up a proposal since around 2002 to use the Islamic gold dinar for the settlement of merchandise transactions. This concept was based on the bitter experience of having been worried about speculator-caused currency fluctuations at the time of the currency crisis. A gold-based currency is different from paper in that even with fluctuations its fixed value does not disappear. He thought for that reason that it would be quite resistant to speculators. The concept also incorporated the objective of getting away from reliance on U.S. dollars for trade settlement.

INAMURA: Japanese need to pay attention to these experiments with Islamic finance also to pass fundamental judgments on neoliberalism.

Promote private-sector dialogue with Malaysia

INAMURA: I recently visited a post office in Malaysia and saw that pawn-broking services at post office counters have begun to offer small loans in exchange for gold in accordance with Islamic financing principles.

When you visit the home of a Malayan, you get the sense that a strong religious faith is being maintained, that relations between parents and children are close, that the precedence of age is being scrupulously observed, that there is concern for the poor and the weak, and that a spirit of charity abounds. On this visit, too, a couple, the husband of whom had been my student at Saitama University, recently left to go on the hajj to Mecca.

After 22 years in office, Dr. Mahathir stepped down as prime minister in October 2003 to make way for Mr. Abdullah Ahmad Badawi. The powerful bulwark of Dr. Mahathir was gone, and one could see that the tide of forces trying to impose neoliberalism on Malaysia was perhaps growing stronger.

Mr. Anwar Ibrahim, who had been Dr. Mahathir’s deputy prime minister at the time of the Asian currency crisis, had tried to deal constructively with the demands of the IMF. His relationship with then-U.S. Assistant Secretary of State Paul Wolfowitz was regarded as a close one. He led an anti-Mahathir movement after he was arrested on suspicion of sodomy. The Foundation for the Future, where he served as president and whose aim is to “promote democracy and human rights in the Middle East and North Africa,” has received US$35 million in aid from the U.S. Anwar was released in 2004, and he has been a visiting fellow at Johns Hopkins University, where Mr. Wolfowitz had been a dean.

Fortunately, the forces that are carrying on the Dr. Mahathir line are going strong. One of them is Dr. Mahathir’s third son, Mr. Mukhriz Mahathir, who is the deputy minister of international trade and industry in the current administration of Mr. Najib Razak. Mr. Mukhriz was an international student at Sophia University in Tokyo and had working experience at a Japanese bank.

Dr. Mahathir has exhorted Japan to have confidence in the power of its civilization, and we Japanese should turn an ear to what he and his successors have to say. At the same time, it might also be time for the Malaysian people themselves to renew their understanding of the arguments made by Dr. Mahathir, who has continued his proud struggle.

There are more than a few elements to the Islamic view of economics that would be at home with traditional Japanese views of the same, such as those of Ninomiya Sontoku. As the Western-led global economic order is reformed, it will be extremely important for Japan and Turkey and the other Islamic nations where the influence has been carried on since the Russo-Japanese War to work together. From a position of resisting neoliberalism and seeking out an Asian path to development, we need to restructure the nature of cooperation and dialogue between our country, Japan, and the “West.”

(Interview and editing by Mr. Tsubouchi Takahiko, editor-in-chief, Gekkan Nippon, a monthly political journal published in Tokyo, Japan)

This article was translated by LEX, INC. in Tokyo: