Professor Jomo Kwame Sundaram interview in theSun Weekend

:: theSun Weekend | 18 Dec 2004 ::

MANY Malaysians know Professor Jomo Kwame Sundaram as a vocal critic of the local political economy.

But the academic, who has taught in Harvard and Yale as well as Malaysian universities, has been paying more attention to international issues
over the past 10 years.

That focus will become a full-time job with his appointment as Assistant Secretary-General for Economic Development at the United Nations.

Before moving to New York next month to begin the two-year term, Jomo talks to CINDY THAM about the UN, development issues, affirmative action, and missing Mahathir.

You've worked with the United Nations on different occasions, as a consultant or board member on issues relating to social and economic development. While working with international organisations like the UN, World Bank and the OECD [Organisation for Economic Co-operation and Development] is not entirely new to you, how do you view your latest appointment as Assistant Secretary-General for Economic Development in the Department of Economic and Social Affairs?
Well, I think, most importantly, working as an academic and a consultant, you have a great degree of freedom, where one comes in and does one's work on a very specific task. And you have a choice whether you want to take on the consultancy, whether it interests you or doesn't interest you. You have certain degrees of freedom.

I think one of the big challenges for me personally is working essentially as a bureaucrat, as an international civil servant if you will. And this, of course, is complicated by the fact that the stakeholders involved are multiple and varied.
You are obliged to be responsible to about 200 member governments of the UN system. In addition, there are a great number of expectations from civil society and so on, about the UN.

This is a completely new position, one of the few new positions which have actually been created in the last few decades because the UN has been cutting down or trying to trim down [its costs].

So this is a new position, partly because the UN has lost considerable ground over the last two, three decades ... Many people comment quite correctly that the last elections in the US reflected a very divided American society.

If you think about the world society, it's even more divided in many ways. This, I think, will be a huge challenge, trying to bridge gaps and trying to achieve certain things in common.

I think the most important thing in the world today, as I see it, is trying to restore the basis for continued and sustained economic growth, on the one hand, as well as creating conditions for far greater economic justice, both at the national as well as at the international levels.

We all talk about globalisation but perhaps, there is limited attention [being paid] to this and there is almost the assumption that somehow or other, greater international economic integration will somehow magically achieve growth and justice.

There is very little evidence that this has happened, and there's no reason to assume that this is going to happen.

And so, there is much to be done in terms of creating such conditions. And I do believe it is possible to begin to move in that direction but, of course, it requires a great deal of coordination among many of the different stakeholders at the international level.

And the conditions for creating that.. are quite absent, in the sense that there is no international government, as we all know. And achieving coordination is so difficult.

Even in Europe, the institutions are still very fragile. If you think [about it] at the global level, the institutions and mechanisms are almost not there in most areas.

And so, one has to think very, very creatively, on the one hand, but also create the conditions for achieving this. And whether we like it or not, the UN is probably the only forum which allows this to happen.

The Bretton Woods institutions, the IMF [International Monetary Fund] and the World Bank, are organisations which have basically assumed a particular approach in handling and addressing world economic issues.

And despite the great deal of criticisms and debate over the years, there has been relatively modest movement, the record of the last two to three decades is quite dismal.

It is precisely those who have perhaps been least inclined to follow the prescriptions of the Bretton Woods institutions who have, in a sense, made the most progress in terms of growth pace.

Countries like China and India are notoriously closed economies, where the government still has a huge role. And you contrast that with other economies where you have had all these liberalisations, leaving it to market forces and so on and so forth, the records are much more dismal if you think about Latin America, if you think, especially, about Africa. They've been sold a lot of snake oil, as the Americans would say.

In response to your appointment, you said that the UN has lost a lot of its influence in the global development debate. Can you elaborate on this?
I think three things basically happened. There's a recent intellectual history of the UN's role in economic affairs. The glory days were the '50s and '60s, which are associated with what is called the "Golden Age", when there was relatively rapid growth at the global level ...

This period was associated with what some people referred to as "Keynesianism", the government had a significant role and the economic performance was really impressive.

This was the time when Europe was catching up, recovering from the war, and Japan was rebuilding and really catching up. And growth rates, not only there but in the former colonial [countries] in Africa and Asia, were very impressive. Inequality at the world level actually went down very briefly after increasing tremendously since the early part of the 19th century.

So, this was a period where the UN can claim [to have had] some influence, contributing to this. Because many of the developing countries ... for example, when you got rid of the colonial masters, you basically often didn't have any people who were trained or prepared.

So, very often, it was the UN who provided people who came with ideas. Likewise, the ideas, which were associated with the UN, had a certain degree of legitimacy and were very influential.

So, I think it'd be fair to say that this was a period when the UN and the economists associated with the UN had tremendous influence.

But this period, unfortunately, came to an end basically in the '70s as three things happened. The role of the government came under severe attack during the '70s, culminating in the rise of people like [Margaret] Thatcher and Ronald Reagan, and the demise of the so-called Keynesianism...

It was the moment of the high tide for the developing countries, in terms of the establishment of the new international economic order, commodity prices went up and so on and so forth.

And although the rich countries were having severe economic problems associated with so-called stagnation, the developing world was doing very well in the second half of the '70s.

Then all this came to an end when the US became increasingly dominant, Paul Volcker [former US Federal Reserve chairman] raised interest rates, international financial liberalisation had grown and the US and Europe especially, but also Japan, increasingly put their money with the institutions where they were more influential, namely the Bretton Woods institutions.

This was a time when a lot of member governments, especially from the rich countries, refused to pay their subscriptions to the UN. So you undermine the UN on the one hand, and you boost the financing as well as the prestige and influence of the Bretton Woods institutions.

And of course, there were other things which were happening. With financial liberalisation, generally, there's a lot of pressure to roll back the role of government to check inflation and so on and so forth.

So, the effect is that macroeconomic policies tended to be much more deflationary in impact. And so growth rates fell all over the world, not just in the developing world but even in Europe and Japan.

All these created a ... new atmosphere, people talked about what you call "neo-liberalism", other people called [it] the "Washington Consensus", and it's essentially a consensus between the leadership of the US government on the one hand, the White House, legislature, and so on, plus the Bretton Woods institutions, the fund, the bank ...

The last quarter of a century has been ... a period when the UN had lost its influence, and the US particularly, but the UK as well, have become increasingly influential not only in political affairs but also in economic affairs.

Essentially, if you look at governments in the developing world, especially, what happens in the UN is left to the foreign ministries. And the foreign ministries are not where you have tremendous economic expertise.

And so, the IMF and [World] Bank would influence people in the finance ministries and sometimes the trade ministries, the WTO would have influence on the trade ministries.

But the foreign ministries, you influence them on economic ideas, it doesn't really matter. There's no impact on policies. This was a huge step back in terms of the influence of the UN.

So it's a combination of factors. I'm not suggesting any big conspiracy or anything like that.

So you think the UN has lost a lot of clout ...
But they never really had clout. It was the power of ideas really ... [With] the World Bank or the IMF, [it's if] you don't do this, we don't give you money.

But the UN doesn't have anything like that. So it's just the power of ideas.

This is what is likely to happen if you do this, and so on and so forth. So the UN was influential mainly because of the people who worked for the UN.

There were many dedicated people. Now they have nothing else to offer in terms of money, for example. And it continues to be a tremendous disadvantage, but, hopefully, if you change the international economic discourse, you get people to question things, it can have a tremendous impact.

Just to give you an example, a couple of months ago, before the US elections, Paul Samuelson, who is sort of the guru of American economics, many of us grew up studying Samuelson's textbooks... he said, you know, this business about globalisation necessarily making people better off isn't necessarily true.

Now he says that?
Yeah. To be fair, he has never made very strong claims but his students have been making strong claims about all the wonders of globalisation. So, he said, you know, well, it's not really the case, and he wrote an academic paper where he shows under what conditions this might not be true.

Now many of us from developing countries sort of say, "Come on lah, we knew this all along."

But, you know, we are nobody as far as those guys are concerned. So all his students suddenly no longer dismiss this idea, as they had been doing for decades before and writing it off as so-called anti-globalisation NGOs.

Previously, they could just dismiss all these people. Now, they are forced to sit up and sort of say that, well, what Professor Samuelson said is theoretically possible but unlikely to happen because, you know ... So they can't just dismiss him.

Likewise, if you have much more work of that kind by people who are much more balanced and are not basically public relations agents for globalisation, for example, then we might have a much more balanced discourse.

People will say, "Yes, this is possible, but this is also possible." They have a much more balanced understanding of things and we will have much more pragmatic policymaking. And this is how, if the UN is going to influence policy, this will have to take place.

But this will also mean that the UN has to deal directly not just with people in foreign ministries all over the world but with a whole range of policymakers.

How do you see your role in this?
Well, frankly, the UN is in a situation where its budget is being cut every year. You have all kinds of budgetary constraints, you have resource constraints.

And if you look at some of the recent controversies the UN is involved in, there seems to be some fat in the system, which doesn't really make it lean and meanÉ and very productive or efficient.

So, these are things that one hears about from reading the media. One has to really make an assessment of what is available, what is possible, before I make any grandiose claims, you know, and then one year later, you make me eat my words [grins].

It'd be quite silly. So, I think it's important to be realistic about this... With the best of intentions, you can make a mess of things, you know.

But are there any issues that you're personally interested in, or hope to pursue through the UN?
I have lots of ideas of my own and I can assure you that many friends and well-wishers have given me hundreds of ideas to pursue.

Certainly, they are not all pursuable. I think one has to make a serious and careful assessment of the situation [first]... But what I would hope to be able to achieve is to have a much higher profile and influence for the UN's work, because the UN significantly dissents from many others.

It dissents, to some extent, on some issues with other international institutions.
It also dissents from what some member governments might think. It also dissents from what people in the so-called market think, people in Wall Street or elsewhere.

So, one has to tread very carefully because these are all stakeholders who can thump the UN on the head for saying something which you think is honest but they think is inimical to their interests. So, one has to be extremely mindful of all these ...

But I do think that the unfortunate and sad experiences of the last few decades have created a situation where there are many people who are looking for an alternative.

You know, previously, I think many people were resigned to what is called TINA, there is no alternative. And people have sort of given up, thrown up their hands in despair. But now, I think there is recognition that we live in a world where there are alternatives and we must seriously explore those alternatives.

I understand you will be chief economic adviser to Dr Jose Antonio Ocampo...
Jose Antonio Ocampo is an under-secretary-general in charge of the Department of Economic and Social Affairs, which has 10 divisions under it.

He's a very eminent economist. He doesn't need my advice [laughs], I think. He's a very highly respected economist. He also, about 13 years [ago], became a politician and he has served as an agriculture minister, planning minister and finance minister in Colombia.

Later on, he became the secretary for the Economic Commission for Latin America and the Caribbean. I see my relationship with him as a collegial one, where we will be working together.

I expect to have certain responsibilities in some of the divisions and to work with him as well as with the people in the different divisions ...

You were both in Yale together in the '70s. Did you meet him there?
I was an undergraduate [then], he was a graduate student, yes. But he is actually my age [born in 1952]. He was a very young graduate student.

So did you two cross paths when you were in Yale?
At Yale [yes], we were very good friends but I've lost touch with him... I became very closely associated with the Economic Growth Center at Yale.

From the first summer, I was working there as a research assistant. So I spent much of my time there and when he came in as a graduate student, I got to know him and we were in study groups together.

What about Kofi Annan? Have you met him before?
Well, my second name is Ghanaian. I was named after the first president of Ghana [Dr Kwame Nkrumah], for whom he worked. After he graduated from MIT [Massachusetts Institute of Technology], he went to work for the Ghanaian government for a while.

Ghanaian names are names of the day you were born... Actually [laughs], I'm misnamed in that sense... So, I have a little affinity with him and when he came to Malaysia several years ago, I did meet him very briefly.

What day is "Kwame" born?
I think "Kwame" is born on Saturday. I was born on Thursday, I think, if my mother got it right but I can't remember [laughs]. Do you remember the day you were born?

Actually, I don't, but I'm not named after the day I was born... You've said in one of your past presentations that any attempt to create a participatory democracy should address the "democratisation of the economy". Can you elaborate on what you mean by this?
You see, you have a situation in politics, ostensibly, it's one person, one vote. In a conglomerate, it's one dollar, one vote in the economy. Now, I mean, this is a crude caricature, but this obviously means that democracy tends to be undermined by economic inequality.

There are all kinds of ways in which you can think about what the implications are. One obvious way, which is very, very important, is in the governance of the international monetary institutions.

Only one country has veto power in the IMF, that's the US, and it has come about because of the way the IMF was created in the US in 1944, and so on and so forth.

Now, if you think about life in society and you think about the phenomenon which people sometimes alternatively call "cronyism" or "social capital" -- what does it mean?

People who have access to the powers-that-be actually are able to influence policymaking in ways which ordinary mortals simply cannot. So these are some of the challenges I think which are faced ...

Rent-seeking and affirmative action are common issues raised in the development debate. What are your views of their role in social and economic development? What are the benefits and pitfalls?
Let's deal with rent-seeking first because it's a term which has pejorative implications but is used very un-analytically in popular discussions. Rent-seeking is often a code word or a surrogate term for bribery, corruption, something like that.

Actually, when you think about rent, and if one is an economist, and you recognise that society for the last few centuries is not characterised by what economists fantasise as perfect competition...

Once you have imperfect competition, you have rents. The question is, how do you get those rents to enhance the quality of life in society rather than to undermine and become wasteful.

So, for example, when you approve of a rent, you call it an incentive. You want investors to do something, you provide them with an incentive, that's a rent. And they make more money precisely because you give them that incentive, whether it's a tax break or a locational incentive... These are all rents.

But when you disapprove of it, you start calling it a rent. That's not very helpful. You have to analyse and look at certain situations ... I mean, we're never going to achieve perfect competition, and it's not as if moving in that direction is necessarily going to improve the quality of life.

So, what we need to do is to recognise that rents exist, to eliminate those rents which do not have beneficial effects on society, and to make sure that those rents which may have beneficial effects on society are deployed with the minimum of waste and used to enhance the quality of life.

Now, coming back to your second point about affirmative action, I think what we find now is an increasing recognition that people have been disadvantaged for all kinds of reasons.

Women are disadvantaged because of their gender. There are people who are located in certain parts of the country or certain countries... These are all almost accidental or sometimes deliberate, but certainly cannot be justified.

So we do not have a level playing field. Let's not pretend we have a level playing field. Moving towards a level playing field may help, but it does not rectify or address historical differences, which need to be addressed.

So there is a need, very often, to ensure that historical differences are addressed through affirmative action policies. For example, preferential policies to hire more women perhaps, or people from marginalised ethnic groups, and so on and so forth.

But there are also different ways of going about it. Let me give you two very simple examples.

You can have a situation where you educate everybody and you especially educate people who have historically been neglected.

For example, women may have been neglected in some societies where there's discrimination against education for girls. Or, people in rural areas may have been discriminated against because facilities for schooling are less.

So you make a special effort to rectify that and that has certain types of consequences in terms of improving the quality of human resources and improving the life chances of the people involved.

Take a woman, for example... Wealth may be unequally distributed. Maybe 90% of the wealth is held by men. And you give that woman, for instance, half the wealth in society. How it helps the rest of the women in society is not obvious, right?

So, there's affirmative action, and there's affirmative action. With, for example, educational intervention, or health intervention, you actually reach a far broader range of people to improve their life chances and they in turn contribute much more to society.

Whereas if you simply make a transfer to a particular individual, or a group of individuals, true, statistically, you might end up with a situation where women own half the wealth in society, for instance.

But it doesn't necessarily mean that women on the whole are better off. So, I think we have to get away from the sort of simple-minded "Yes, affirmative action" or "No affirmative action" and get into looking very carefully at different policies and their implications.

In the past 20-odd years, you've been very vocal about the political economy in Malaysia, you've been -- reportedly -- threatened with lawsuits and even death threats. Looking back, is there anything that you would have approached differently?
Oh, I'm sure that, with the benefit of hindsight, there are many things you could have done much better, more effectively... There are many things one can do much better but as far as the ethical, the moral basis, for those analyses are concerned, I have no regrets.

And I would reiterate those concerns and in fact, over the last decade-and-a-half or so, I've worked increasingly on international issues because to me, the problems are not simply problems within, say, Malaysian society... I've also raised the issues internationally, and very often, [they have] not been terribly welcomed.

You taught in Ivy League institutions before but spent the large part of your academic career in the public universities in Malaysia. Some people would say, "Why not stay in those Ivy League institutions!"
There's a very controversial political scientist named Chalmers Johnson, who spent most of his career teaching at the University of California in Berkeley.

He's probably one of the most prolific and arguably one of the most influential political scientists of the late 20th century. He was offered a professorship at Harvard and he turned it down.

He said he believed he was committed to public education and he moved from the University of California in Berkeley to the University of California in San Diego. And then, he was disillusioned by the way the school he was involved in setting up was going and he quit as a matter of principle.

Now, I've never had the luxury of quitting and doing things on my own. So, I would certainly see my preferences as much more modest than what he has done.

But I do think that insofar as there are certain ethics in society, you know, one has to walk the talk, so to speak. I mean, you can't set up double standards and talk so much about doing certain things and then...

Of course in many societies, public universities are so poorly funded, the resources are terrible, and I can understand why people do not remain in public universities. But I do think that the real challenge is to improve the conditions in public universities rather than to abandon them.

How many years have you been in Universiti Malaya?
I joined UKM [Universiti Kebangsaan Malaysia] actually, again by choice. I could have easily continued to work in Penang at USM [Universiti Sains Malaysia].

But I chose to work at UKM, at that time a very new university, committed to using Malay as the national language in 1977. And then in 1982, I transferred to UM. So, I've been there since, for almost 23 years... I retired at the end of [November. This interview was conducted on Nov 21].

... The last time I interviewed you was when Dr Mahathir Mohamad retired ...
Actually [smiles]... I miss Mahathir.

You do? Why?
I think he was wrong on many things but he was willing to speak up on a number of issues, not always correctly, not always bearing the national interest in mind.

But in an age when there is so much pressure to conform to basically what is dictated by the powers-that-be at the international level, his willingness to speak up, I think, was very much appreciated.

Not particularly in Malaysia but internationally, I think, especially in many parts of the developing world.

I mean, an example would be France in international affairs today. Most people can't stand [President Jacques] Chirac but the fact that he is willing to dissent on a number of issues, is something which has made people sort of appreciate him.

And Mahathir was one of those who were articulate and able to command that attention. Other more serious and more careful critics, say like [Cuban President Fidel] Castro for example, simply did not have that kind of stage available.

So, in that sense, Mahathir carved a certain niche for himself... Unfortunately, he was sullied by the cronies and sycophants around him and so on and so forth. And especially for Malaysians who were much more aware of this, there was a great deal of resentment.

But I think we would be throwing the baby out with the bath water if we did not recognise his positive contributions.

You said you missed him. That means you think there is an absence of that kind of voice now.
Internationally, yes. Certainly. Who else is there?

What about Pak Lah?
I think the present regime, understandably, feels it needs to get away from the kinds of controversies Mahathir got himself into. Often, many of the things Mahathir said were either ill-advised, ill-informed, and often not very productive [or] constructive.

I'm not endorsing everything Mahathir said, by any means, but this desire to be acceptable, you know, we are back to business as normal, that kind of thing, is actually not particularly helpful. It's not very helpful particularly in the international fora.

We're now so back into keeping up with the Joneses, "Oh, Singapore has an FTA, we must also have an FTA", that kind of thing. That, I don't think is a particularly useful way [in which] to proceed.