The New Normal: Regionalising both the Global and the National

By OOI KEE BENG, for The Edge Malaysia, 1 June 2020.

Governance in Malaysia suffered a double whammy when the country went through a parliamentary coup that saw an insecure government take power on 1 March just in time for radical measures against the spread of Covid-19 to be put in place nationwide.

In having their social interactions and economic activities drastically curbed, the citizenry was plunged into a state of uncertainty.

As the seriousness of the situation, nationally and globally, began to sink in, compliance with the restrictions imposed through the Movement Control Order remained commendably high.

As the MCO got extended repeatedly, a third whammy became apparent. The timing of Covid-19 hitting Malaysia intruded into the Ramadan month, and the balik kampung exodus of people from the urban centres presented a scary scenario of the disease spreading unhampered across the country.

With news endlessly flowing in about how badly other countries were suffering, maintaining the MCO in one form or another became a common wisdom, and was widely accepted.

The magnitude of the problem soon became clear to most people. The structure of the global economy as we have known it to be is being seriously damaged, perhaps for good. Governments are spending billions of dollars just to keep people from starving.

Going beyond Show-and-Tell Policies

A full-size global recession is upon us. With governments having chosen the paths of privatisation and outsourcing as the panacea for all their ills over the last four decades, their ability to manoeuvre themselves out of this crisis is very much in doubt.

Having outsourced solution-solving and thinking to the private sector and other external players, governments in many countries no longer function as a reservoir of administrative talent and expertise. Politics has thus become increasingly populistic and opportunistic, and policies are more show-and-tell in nature than substantial and long-term.

In economics, the global supply chain system as it had been, tended to weaken local economic logic, tying producers and consumers through worldwide logistical links into a network of apparently distance-defying decision-making rationale.

So how do we come out of this crisis without easily falling back into a similar situation again? Here lies the weightiness of the discussion about a New Normal.

As should be obvious by now, this New Normal will have to be radically different from how the pre-Covid-19 Normal was politically and economically defined. The Penang State Government likes to talk about the Next Normal instead the New Normal. This is perhaps just a quaint difference for the mass media’s consumption, but if taken more seriously, it reveals an understanding that the New Normal is going to be a drawn-out work-in-progress undertaking; and it will require ideologically challenging takes on how the world is to function in the future.

While the global economy will rebuild itself in ways that will largely be beyond Malaysia’s ability to influence, determined as this will be by strategical considerations among big powers and giant MNCs, the building of a resilient socioeconomic structure at the national level which responds agilely to regional and global dynamics, is within the country’s ability to do. In fact, it is an imperative.

Firstly, we now know that for the sake of food security and industrial stability, supply chains upstream and downstream should be grounded more proximately than before. But it would be a mistake to assume from this that reducing these supply chains to a national size is the answer. Globalisation is here to stay because the economic and other advantages that it brings are too good to ignore. What seems more logical is for globalisation to be a steadier process, done slowly without society’s interests being thrown to the wind to please foreign investments, whose benefits to the citizenry at large are never quite obvious.

A Multipolar Global System is at Hand

Globalisation is thus poised to regionalise. The multipolar world that was discussed so heatedly before Covid-19 will be a key aspect of the New Normal, be it in global strategic thinking or in macro-economic approaches. In that sense, Southeast Asia finds itself in a good place, both in time and by location; and Malaysia, being one of the most industrialised countries in the region has much to gain from this reconfiguration of regional socioeconomic consciousness.

What may be a less obvious aspect of the New Normal is the regionalisation of nationalism needed to manage the regionalisation of globalisation. With global production chains and markets becoming a network of regional hubs, national economies will need to take advantage of more proximate markets. This will require closer collaboration between neighbouring countries, especially among those who are already somewhat integrated economically, like the members of the Association of Southeast Asian Nations (ASEAN).

There is concentricity to regionalism, of course, covering increasing territories to move towards the global level. For Malaysia, placed nicely between the Pacific and the Indian Oceans, between the northern land-based economies of the region and the maritime expanse to the south, and between India and China, the two economic giants of the future, it can only fail if its politicians continue to be fixated on narrow communal gains instead of aspiring towards regional middle-power status.

But first, it has to drag itself out of the political quagmires the country is prone to fall into.

Dato’ Dr Ooi Kee Beng is the Executive Director of Penang Institute. His recent books include “The Eurasian Core and its Edges: Dialogues with Wang Gungwu on the History of the World” (ISEAS 2016).