Smart Partnership or Cronyism? A Malaysian Perspective

Abstract

Proposes that, arms length economic system (ALS) is not always appropriate for developing nations. The alternative of a relationship based system (RBS) which is often mistaken for crony capitalism as practiced in Malaysia is offered. Entrepreneurial spirit so fundamental to the development of an economy may be so lacking as to perish under an ALS yet be able to flourish under RBS. Explains three major aspects of how the Malaysian Economy was able to flourish under the RBS (1) the cultural reform of the majority indigenous group (2) the multi‐cultural cooperation between the economically superior Chinese and the less economically developed Malays and (3) The spill‐over effect from privatisation policies. Recognising the existence and legitimacy of an RBS as an economic model may offer a new approach towards poverty eradication and economic development of Third World countries.