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Sunday, 7 December 2014


Datuk Saifuddin & Dr Jun

Malaysian Network for Community Economy including GMM & COMMACT Malaysia hosted a discussion on Dec 5, 2014 on the theme of fostering a people economy.

The discussion was moderated by Datuk Saifuddin Abdullah (Chairperson of the network) and input from resources persons like Datuk Dr Denison Jayasooria, Dr Hezri Adnan, Dr June-E Tan, Dr Muhammed Abdul Khalid and Dr Lin Mui Kiang.

The discussion recognised that Prime Minister Najib in his 2015 Budget Speech has rightly highlighted a dual approach for economic management namely” a capital economy” and “a people economy”. There is therefore a need to foster a clearer understanding of the people economy and note its potential and implications at the national, Asean and global levels for sustainable development and overall improvement in the lives of ordinary people.

Contemporary Analysis

We noted that the public policy thrust was towards big business and growing the economy from a very strong market oriented growth with equity. While this approach has addressed poverty reduction, it has however resulted in increased inequalities within and among the various communities in Malaysia. The current levels of inequality and the issues faced by the poor especially low income families is effecting their capacity and capability to enjoy a better quality of life in Malaysian society. We note that there are many structural issues which need addressing and therefore a micro and individual project approach will not resolve the current issues faced by the grassroots.

We understood that our development policies and approaches have not given adequate emphasis on sustainable development especially in the way we have managed our environment and natural resources. The impact of these are revealed in disasters as in Cameron Highlands, Tasik Chini and the unsustainable use of the forest resources which has also impacted the Orang Asli and the natives of Sabah and Sarawak especially those forest based communities.
Dr Hezri (ISIS)

We recognised that the many initiatives by the Federal, State and local governments in addressing socio-economic development of the bottom 40%, however many of these have not built a self-reliant and resilient community but a ‘subsidy driven-dependent society’ which is impacting their ability to compete in the open market.

We also recognised that many of the development initiatives such as micro credit has not enabled the poor and low income families to graduate from subsided loans into commercial financial institutions. We also noted that there were high rates of defaults and non-performing loans which has disempowered micro and informal business. We were told that the poor and low income were playing higher interest rates for micro loans and hire purchase due to the longer repayment rates. Furthermore higher personal income tax as compared to higher income groups in terms of assets taxes (property & shares).

We noted that there is a sizable social economy sector which has not been adequately recognised especially the transactions made and the social contributions of micro finance institutions, cooperative based businesses, informal sector, income generating projects of the voluntary sector (recycling), private sector driven CSR income generating initiatives, and alternative financial initiatives such as Ar Rahnu or Islamic pawn broking is now popular among all communities.

We recognise young people are tapping the potential of social enterprises and social entrepreneurship projects in developing business solutions in addressing social, environmental and community problems in a sustainable way. This needs to be encouraged and developed further.

We noted the potential at the grassroots based on the thesis of ‘wealth at the bottom of the pyramid’. We need to build on this potential especially the good and services needed at this level to tap into the potential for local markets and small town developments.

We recognise the need to foster a stronger community, solidarity or collective oriented approaches which is bottom up in addressing social, environmental and economic development.

There is a need to develop empowering approaches which builds self-reliance and self-help through government intervention and policies in fostering people centred development.

Global policy towards Sustainable Development Goals

We reviewed briefly a number of global discussions and documents leading to 2015 and beyond.
We noted the thrust of the Rio+20 document entitled “The Future we Want” (June 2012), The New Global Partnership document (May 2013, report of the High level panel), the Open Working Group for Sustainable Development Goals (July 2014) and the UN Secretary General’s Synthesis Report (Dec 2014) entitled “The Road to Dignity by 2030”

In all these documents there is a stronger call towards a sustainable development framework which adopts a human rights approach to development and which gives adequate emphasis towards economic, social and environmental concerns with a strong commitment for participation of people in governance through public participation in decision making.

Dr Muhamad, Andrew and Richrad

The proposed 17 Sustainable Development Goals with 169 targets needs further study and application in the Malaysian and Asean context. These goals and targets moves beyond the MDGs and therefore provides an ideal policy framework for the development of a people economy in Malaysia.

We recognise that the UN established an Inter-Agency TaskForce on Social & Solidarity Economy (TFSSE) on Sept. 30, 2013. This is in the right step forward in recognising the potential of SSE in achieving sustainable development. This also enables Malaysia and other Asean countries to fully recognise the potential social economy in generating sustainable wealth and human wellbeing.

Specific Recommendations

We call on the Federal Government to establish a special Taskforce on Social Economy which will review all the current policies, programs, funding and initiatives and direct these towards an empowering and people centred approach which is sustainable. This can become the second generational policies and programmes in Malaysia in 2015 and beyond.

We call on the Federal Government to recognise this sector as a potential for growth and development in the Eleventh Malaysia Plan (2016 -2020) where there is a place for social, solidarity economy as a policy thrust and guiding principle for sustainable development.

We call on the Government of Malaysia to adopt a human rights approach for sustainable development with people and the environment at the heart of development including strengthening the institutional features for compliance, monitoring, impact assessment and implementation.

We call of the Prime Minister who is the Chair for ASEAN in 2015 to use his chair to promote a people economy through Social Solidarity Economy for Asean which will address the shortfalls and weakness of the current for profit and market oriented approaches towards justice and equity.

Jointly issued by Datuk Saifuddin Abdullah (Chairman), Prof Datuk Yusof Kassim (Vice Chairman) and Datuk Dr Denison Jayasooria (Secretary), Malaysian Network for Community Economy
Dec 7, 2014

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