Saturday, January 29, 2011

Malaysian Economics

We're lucky to be in Sandakan, Malaysia (Borneo) during the off-season--after western New Years, and before the end of Chinese New Years. We're the only customers at the cheap and cheerful restaurants and cafe's around here, so we get to suck down free WiFi and instant mochas without any hassels.
Lady Sylvia from Darwin was anchored here when we arrived, the first cruiser we'd seen in more than a month. So when they motored over to offer a grand tour of the waterfront we didn't hesitate. They introduced us to Miu and his friend's restaurant under the red and white awning on the waterfront near the Navy dock. You just pull your dingy up to the rocks and he or one of his staff will come out and help you tie up to a tree or rock and keep an eye on your dingy all day (small Yamaha outboards are like Rollex watches around here). Now that we've been patronizing his restaurant for a week now, we get to dig into his family, religion, and finances to learn a bit about the Malaysian culture and economy. So here are a few tidbits.
Like in Tawau, just around the corner, Chinese immigrants are treated as second-class citizens by the democratic Muslim government. Miu seems is Daoist, and our Chinese friends in Tawau were mostly secular Christian. As for most business-owners in developing countries, religion seems to take a back seat to business, it's often a means of assimilating into the local community or forming business contacts among your compatriots. And Malaysia learned government administration from Western governments in the early 20th century, picking up cronyism and discrimination from their English occupiers as a matter of course. Miu's boss, the owner of the restaurant, was refused a restaurant operation license by the government, claiming that his kitchen was too small. The restaurants to either side of him lease space from the same large "Swiss Hotel" building and had no problem with liquor and restaurant licensing--they are owned by Malaysians involved in the government. Miu and his friend soldier on, nonetheless, hiring Malaysian staff and petitioning the government while keeping the doors open and customers happy with excellent cheap food.
It's also Malaysian policy that all governmental jobs must be staffed with Malaysians rather than anyone of foreign ancestry (even 3rd and 4th generation immigrants). Chinese immigrants are forced to marry into a Malaysian family if they want any chance at getting their kids summer jobs and bank loans, etc. Once they do, all their immediate family become full 1st-class citizens. In a country where the government is the dominant economic force, you can't be left out of the action and hope to thrive.
The government used to receive a dominant portion of its revenue by selling off land and trees to foreign developers and loggers. Miu is frustrated with how his government has managed the forestry industry. He runs the finances and accounting for a wood-working tool shop (and lumber yard?) in town when he's not managing the waterfront restaurant. Any business with revenue of more than 100,000 Ringit ($30K USD) must pay sales taxes. The government gave away all the old-growth timber to foreign logging companies under their "sustainable forestry" plan decades ago. We have never seen any logs in the logging pen near the anchorage, but there's certainly plenty of mud and refuse flowing by us in the heavy rains that wash away the soil and plastic trash from the hills nearby. The hills bare of old growth jungle trees as far as we can tell. So the only remaining natural resource to keep the government afloat is the oil revenue, putting Malaysia in conflict with their neighbors, Indonesia, Brunei, and the Philippines. They patrol their borders continuously, stationing soldiers on desolate sandbars to watch their counterparts on the opposite shores of another island or coastline. Oil rigs are separated by only 10 miles or so on every international border, each side sucking oil as quickly as possible from shared rock formations deep below the surface tension of military and fishing trawlers spying on each other with binoculars and telephoto cameras. Fishermen seem to venture out in the middle of the night to set long-lines near the border when no-one is looking. The guy who caught our keep probably wishes he'd loaded for bigger game. We dragged his 5 km long line, hooks, floats, bait and all through the night and into Tawau before we discovered it and hauled it up on deck to give away to a fisherman a week later.
This territorial and "take-charge" attitude of the Malaysian government and their citizens has benefits for us cruisers. A large Malaysian Air Force transport plane buzzed low over our heads as we approach Malaysian waters, snapping away with their telephoto lenses from an observation port near the jump door towards the rear of the plane as we snapped back.

Once here for a few weeks we learned that the Malaysian military had recently pulled off a daring, expensive rescue operation for several Malaysian sailors on a commercial ship hijacked near Somalia. Finally, a government doing it's job to protect sailors. The US Coast Guard and Navy told a former US Marine planning a Red Sea passage  that they wouldn't  let him follow US convoys through the Red Sea. They don't even respond to non-military emergency radio distress calls from US citizens. "Unless shots are fired and you can hold them off for 24 hours yourself, we aren't going to come rescue you." The pirates were captured within hours of the hijacking and are on trial here in Malaysia, where drug traffickers, even Australian citizens, are routinely executed for their crimes. I'm not in favor of the death penalty, but pirates expecting to win the ransom lottery by shooting up cruising boats will think twice if they are flying the Malaysian flag. It doesn't change our plans to call it quits before pirate waters, but it's nice to know that our friends planning the passage will have a chance if they fly a Malaysian courtesy flag a little higher.
We were surprised that all the restaurants can have a dozen staff members standing around staring blankly at you while you drink you, the only customer, sip your coffee. He says that his restaurant is running at a loss for January, but they turned a profit in December, despite just opening their doors to the Holiday tourist traffic. Aparently there are a lot of European and Australian tourists that visit this area of the world.
Another interesting cultural tidbit is the inclusive nature of the local Daoist religion. Posters of Jesus, Muhammed, Budha, and many other religious figures are prominently displayed in the Daoist temple where Miu went to participate in the ritual performances to send the gods on a week-long holiday before the start of Chinese New Years. The gods will return in full force on Chinese New Years for the weeks-long celebration when all non-Muslim-run businesses (most restaurants and grocery stores) will shut down.

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